UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | |
FORM 10-Q | |
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2018. |
OR | |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _________ to ___________ |
Commission File Number | Registrant; State of Incorporation; Address and Telephone Number | IRS Employer Identification No. |
1-11459 | PPL Corporation (Exact name of Registrant as specified in its charter) (Pennsylvania) Two North Ninth Street Allentown, PA 18101-1179 (610) 774-5151 | 23-2758192 |
1-905 | PPL Electric Utilities Corporation (Exact name of Registrant as specified in its charter) (Pennsylvania) Two North Ninth Street Allentown, PA 18101-1179 (610) 774-5151 | 23-0959590 |
333-173665 | LG&E and KU Energy LLC (Exact name of Registrant as specified in its charter) (Kentucky) 220 West Main Street Louisville, KY 40202-1377 (502) 627-2000 | 20-0523163 |
1-2893 | Louisville Gas and Electric Company (Exact name of Registrant as specified in its charter) (Kentucky) 220 West Main Street Louisville, KY 40202-1377 (502) 627-2000 | 61-0264150 |
1-3464 | Kentucky Utilities Company (Exact name of Registrant as specified in its charter) (Kentucky and Virginia) One Quality Street Lexington, KY 40507-1462 (502) 627-2000 | 61-0247570 |
PPL Corporation | Yes X | No | ||
PPL Electric Utilities Corporation | Yes X | No | ||
LG&E and KU Energy LLC | Yes X | No | ||
Louisville Gas and Electric Company | Yes X | No | ||
Kentucky Utilities Company | Yes X | No |
PPL Corporation | Yes X | No | ||
PPL Electric Utilities Corporation | Yes X | No | ||
LG&E and KU Energy LLC | Yes X | No | ||
Louisville Gas and Electric Company | Yes X | No | ||
Kentucky Utilities Company | Yes X | No |
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company | ||
PPL Corporation | [ X ] | [ ] | [ ] | [ ] | [ ] | |
PPL Electric Utilities Corporation | [ ] | [ ] | [ X ] | [ ] | [ ] | |
LG&E and KU Energy LLC | [ ] | [ ] | [ X ] | [ ] | [ ] | |
Louisville Gas and Electric Company | [ ] | [ ] | [ X ] | [ ] | [ ] | |
Kentucky Utilities Company | [ ] | [ ] | [ X ] | [ ] | [ ] |
PPL Corporation | [ ] | |||||
PPL Electric Utilities Corporation | [ ] | |||||
LG&E and KU Energy LLC | [ ] | |||||
Louisville Gas and Electric Company | [ ] | |||||
Kentucky Utilities Company | [ ] |
PPL Corporation | Yes | No X | ||
PPL Electric Utilities Corporation | Yes | No X | ||
LG&E and KU Energy LLC | Yes | No X | ||
Louisville Gas and Electric Company | Yes | No X | ||
Kentucky Utilities Company | Yes | No X |
PPL Corporation | Common stock, $0.01 par value, 699,042,874 shares outstanding at April 25, 2018. | |
PPL Electric Utilities Corporation | Common stock, no par value, 66,368,056 shares outstanding and all held by PPL Corporation at April 25, 2018. | |
LG&E and KU Energy LLC | PPL Corporation directly holds all of the membership interests in LG&E and KU Energy LLC. | |
Louisville Gas and Electric Company | Common stock, no par value, 21,294,223 shares outstanding and all held by LG&E and KU Energy LLC at April 25, 2018. | |
Kentucky Utilities Company | Common stock, no par value, 37,817,878 shares outstanding and all held by LG&E and KU Energy LLC at April 25, 2018. |
Page | ||||
PART I. FINANCIAL INFORMATION | ||||
Item 1. Financial Statements | ||||
PPL Corporation and Subsidiaries | ||||
PPL Electric Utilities Corporation and Subsidiaries | ||||
LG&E and KU Energy LLC and Subsidiaries | ||||
Louisville Gas and Electric Company | ||||
Kentucky Utilities Company | ||||
Combined Notes to Condensed Financial Statements (Unaudited) | |||||
Item 2. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||
PART II. OTHER INFORMATION | |||||
COMPUTATIONS OF RATIO OF EARNINGS TO FIXED CHARGES | |||||
CERTIFICATES OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 | |||||
CERTIFICATES OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 |
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• | the outcome of rate cases or other cost recovery or revenue proceedings; |
• | changes in U.S. state or federal, or U.K. tax laws or regulations, including the TCJA; |
• | effects of cyber-based intrusions or natural disasters, threatened or actual terrorism, war or other hostilities; |
• | significant decreases in demand for electricity in the U.S.; |
• | expansion of alternative and distributed sources of electricity generation and storage; |
• | changes in foreign currency exchange rates for British pound sterling and the related impact on unrealized gains and losses on PPL's foreign currency economic hedges; |
• | the effectiveness of our risk management programs, including foreign currency and interest rate hedging; |
• | non-achievement by WPD of performance targets set by Ofgem; |
• | the effect of changes in RPI on WPD's revenues and index linked debt; |
• | developments related to ongoing negotiations regarding the U.K.'s intent to withdraw from the European Union and any actions in response thereto; |
• | defaults by counterparties or suppliers for energy, capacity, coal, natural gas or key commodities, goods or services; |
• | capital market conditions, including the availability of capital or credit, changes in interest rates and certain economic indices, and decisions regarding capital structure; |
• | a material decline in the market value of PPL's equity; |
• | significant decreases in the fair value of debt and equity securities and its impact on the value of assets in defined benefit plans, and the potential cash funding requirements if fair value declines; |
• | interest rates and their effect on pension and retiree medical liabilities, ARO liabilities and interest payable on certain debt securities; |
• | volatility in or the impact of other changes in financial markets and economic conditions; |
• | the potential impact of any unrecorded commitments and liabilities of the Registrants and their subsidiaries; |
• | new accounting requirements or new interpretations or applications of existing requirements; |
• | changes in the corporate credit ratings or securities analyst rankings of the Registrants and their securities; |
• | any requirement to record impairment charges pursuant to GAAP with respect to any of our significant investments; |
• | laws or regulations to reduce emissions of GHGs or the physical effects of climate change; |
• | continuing ability to access fuel supply for LG&E and KU, as well as the ability to recover fuel costs and environmental expenditures in a timely manner at LG&E and KU and natural gas supply costs at LG&E; |
• | weather and other conditions affecting generation, transmission and distribution operations, operating costs and customer energy use; |
• | changes in political, regulatory or economic conditions in states, regions or countries where the Registrants or their subsidiaries conduct business; |
• | receipt of necessary governmental permits and approvals; |
• | new state, federal or foreign legislation or regulatory developments; |
• | the impact of any state, federal or foreign investigations applicable to the Registrants and their subsidiaries and the energy industry; |
• | our ability to attract and retain qualified employees; |
• | the effect of any business or industry restructuring; |
• | development of new projects, markets and technologies; |
• | performance of new ventures; |
• | business dispositions or acquisitions and our ability to realize expected benefits from such business transactions; |
• | collective labor bargaining negotiations; and |
• | the outcome of litigation against the Registrants and their subsidiaries. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Operating Revenues | $ | 2,126 | $ | 1,951 | |||
Operating Expenses | |||||||
Operation | |||||||
Fuel | 214 | 191 | |||||
Energy purchases | 241 | 215 | |||||
Other operation and maintenance | 468 | 470 | |||||
Depreciation | 269 | 242 | |||||
Taxes, other than income | 83 | 75 | |||||
Total Operating Expenses | 1,275 | 1,193 | |||||
Operating Income | 851 | 758 | |||||
Other Income (Expense) - net | (43 | ) | (9 | ) | |||
Interest Expense | 239 | 217 | |||||
Income Before Income Taxes | 569 | 532 | |||||
Income Taxes | 117 | 129 | |||||
Net Income | $ | 452 | $ | 403 | |||
Earnings Per Share of Common Stock: | |||||||
Net Income Available to PPL Common Shareowners: | |||||||
Basic | $ | 0.65 | $ | 0.59 | |||
Diluted | $ | 0.65 | $ | 0.59 | |||
Dividends Declared Per Share of Common Stock | $ | 0.41 | $ | 0.395 | |||
Weighted-Average Shares of Common Stock Outstanding (in thousands) | |||||||
Basic | 694,514 | 680,882 | |||||
Diluted | 695,322 | 683,084 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net income | $ | 452 | $ | 403 | |||
Other comprehensive income (loss): | |||||||
Amounts arising during the period - gains (losses), net of tax (expense) benefit: | |||||||
Foreign currency translation adjustments, net of tax of $0, ($1) | 116 | (24 | ) | ||||
Qualifying derivatives, net of tax of $4, $2 | (20 | ) | (6 | ) | |||
Defined benefit plans: | |||||||
Net actuarial gain (loss), net of tax of $0, $0 | (1 | ) | — | ||||
Reclassifications from AOCI - (gains) losses, net of tax expense (benefit): | |||||||
Qualifying derivatives, net of tax of ($2), $0 | 12 | (1 | ) | ||||
Defined benefit plans: | |||||||
Net actuarial (gain) loss, net of tax of ($9), ($9) | 36 | 32 | |||||
Total other comprehensive income | 143 | 1 | |||||
Comprehensive income | $ | 595 | $ | 404 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 452 | $ | 403 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 269 | 242 | |||||
Amortization | 21 | 23 | |||||
Defined benefit plans - (income) | (50 | ) | (19 | ) | |||
Deferred income taxes and investment tax credits | 59 | 161 | |||||
Unrealized losses on derivatives, and other hedging activities | 85 | 35 | |||||
Stock-based compensation expense | 15 | 19 | |||||
Other | (3 | ) | (1 | ) | |||
Change in current assets and current liabilities | |||||||
Accounts receivable | (71 | ) | (43 | ) | |||
Accounts payable | (36 | ) | (84 | ) | |||
Unbilled revenues | 58 | 52 | |||||
Fuel, materials and supplies | 43 | 44 | |||||
Prepayments | (73 | ) | (110 | ) | |||
Taxes payable | 22 | (21 | ) | ||||
Regulatory assets and liabilities, net | 64 | (17 | ) | ||||
Other current liabilities | (120 | ) | (60 | ) | |||
Other | 23 | 22 | |||||
Other operating activities | |||||||
Defined benefit plans - funding | (150 | ) | (520 | ) | |||
Other assets | (30 | ) | 5 | ||||
Other liabilities | (12 | ) | 4 | ||||
Net cash provided by operating activities | 566 | 135 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (750 | ) | (677 | ) | |||
Expenditures for intangible assets | (7 | ) | (3 | ) | |||
Other investing activities | 4 | 1 | |||||
Net cash used in investing activities | (753 | ) | (679 | ) | |||
Cash Flows from Financing Activities | |||||||
Issuance of long-term debt | 144 | 64 | |||||
Issuance of common stock | 100 | 73 | |||||
Payment of common stock dividends | (273 | ) | (258 | ) | |||
Net increase in short-term debt | 369 | 744 | |||||
Other financing activities | (9 | ) | (16 | ) | |||
Net cash provided by financing activities | 331 | 607 | |||||
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash | (2 | ) | 3 | ||||
Net Increase in Cash, Cash Equivalents and Restricted Cash | 142 | 66 | |||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 511 | 367 | |||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 653 | $ | 433 | |||
Supplemental Disclosures of Cash Flow Information | |||||||
Significant non-cash transactions: | |||||||
Accrued expenditures for property, plant and equipment at March 31, | $ | 313 | $ | 236 | |||
Accrued expenditures for intangible assets at March 31, | $ | 65 | $ | 62 |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 629 | $ | 485 | |||
Accounts receivable (less reserve: 2018, $56; 2017, $51) | |||||||
Customer | 760 | 681 | |||||
Other | 89 | 100 | |||||
Unbilled revenues | 489 | 543 | |||||
Fuel, materials and supplies | 279 | 320 | |||||
Prepayments | 139 | 66 | |||||
Price risk management assets | 56 | 49 | |||||
Other current assets | 49 | 50 | |||||
Total Current Assets | 2,490 | 2,294 | |||||
Property, Plant and Equipment | |||||||
Regulated utility plant | 38,891 | 38,228 | |||||
Less: accumulated depreciation - regulated utility plant | 7,003 | 6,785 | |||||
Regulated utility plant, net | 31,888 | 31,443 | |||||
Non-regulated property, plant and equipment | 387 | 384 | |||||
Less: accumulated depreciation - non-regulated property, plant and equipment | 114 | 110 | |||||
Non-regulated property, plant and equipment, net | 273 | 274 | |||||
Construction work in progress | 1,575 | 1,375 | |||||
Property, Plant and Equipment, net | 33,736 | 33,092 | |||||
Other Noncurrent Assets | |||||||
Regulatory assets | 1,519 | 1,504 | |||||
Goodwill | 3,302 | 3,258 | |||||
Other intangibles | 703 | 697 | |||||
Pension benefit asset | 378 | 284 | |||||
Price risk management assets | 120 | 215 | |||||
Other noncurrent assets | 140 | 135 | |||||
Total Other Noncurrent Assets | 6,162 | 6,093 | |||||
Total Assets | $ | 42,388 | $ | 41,479 |
March 31, 2018 | December 31, 2017 | ||||||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term debt | $ | 1,457 | $ | 1,080 | |||
Long-term debt due within one year | 250 | 348 | |||||
Accounts payable | 836 | 924 | |||||
Taxes | 128 | 105 | |||||
Interest | 323 | 282 | |||||
Dividends | 285 | 273 | |||||
Customer deposits | 286 | 292 | |||||
Regulatory liabilities | 158 | 95 | |||||
Other current liabilities | 515 | 624 | |||||
Total Current Liabilities | 4,238 | 4,023 | |||||
Long-term Debt | 20,214 | 19,847 | |||||
Deferred Credits and Other Noncurrent Liabilities | |||||||
Deferred income taxes | 2,557 | 2,462 | |||||
Investment tax credits | 128 | 129 | |||||
Accrued pension obligations | 653 | 800 | |||||
Asset retirement obligations | 292 | 312 | |||||
Regulatory liabilities | 2,689 | 2,704 | |||||
Other deferred credits and noncurrent liabilities | 441 | 441 | |||||
Total Deferred Credits and Other Noncurrent Liabilities | 6,760 | 6,848 | |||||
Commitments and Contingent Liabilities (Notes 7 and 10) | |||||||
Equity | |||||||
Common stock - $0.01 par value (a) | 7 | 7 | |||||
Additional paid-in capital | 10,411 | 10,305 | |||||
Earnings reinvested | 4,037 | 3,871 | |||||
Accumulated other comprehensive loss | (3,279 | ) | (3,422 | ) | |||
Total Equity | 11,176 | 10,761 | |||||
Total Liabilities and Equity | $ | 42,388 | $ | 41,479 |
(a) | 1,560,000 shares authorized; 697,383 and 693,398 shares issued and outstanding at March 31, 2018 and December 31, 2017. |
Common stock shares outstanding (a) | Common stock | Additional paid-in capital | Earnings reinvested | Accumulated other comprehensive loss | Total | |||||||||||||||||
December 31, 2017 | 693,398 | $ | 7 | $ | 10,305 | $ | 3,871 | $ | (3,422 | ) | $ | 10,761 | ||||||||||
Common stock issued | 3,985 | 115 | 115 | |||||||||||||||||||
Stock-based compensation | (9 | ) | (9 | ) | ||||||||||||||||||
Net income | 452 | 452 | ||||||||||||||||||||
Dividends and dividend equivalents | (286 | ) | (286 | ) | ||||||||||||||||||
Other comprehensive income (loss) | 143 | 143 | ||||||||||||||||||||
March 31, 2018 | 697,383 | $ | 7 | $ | 10,411 | $ | 4,037 | $ | (3,279 | ) | $ | 11,176 | ||||||||||
December 31, 2016 | 679,731 | $ | 7 | $ | 9,841 | $ | 3,829 | $ | (3,778 | ) | $ | 9,899 | ||||||||||
Common stock issued | 2,696 | 97 | 97 | |||||||||||||||||||
Stock-based compensation | (21 | ) | (21 | ) | ||||||||||||||||||
Net income | 403 | 403 | ||||||||||||||||||||
Dividends and dividend equivalents | (270 | ) | (270 | ) | ||||||||||||||||||
Other comprehensive income (loss) | 1 | 1 | ||||||||||||||||||||
March 31, 2017 | 682,427 | $ | 7 | $ | 9,917 | $ | 3,962 | $ | (3,777 | ) | $ | 10,109 | ||||||||||
(a) | Shares in thousands. Each share entitles the holder to one vote on any question presented at any shareowners' meeting. |
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Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Operating Revenues | $ | 639 | $ | 573 | |||
Operating Expenses | |||||||
Operation | |||||||
Energy purchases | 161 | 146 | |||||
Other operation and maintenance | 133 | 163 | |||||
Depreciation | 85 | 75 | |||||
Taxes, other than income | 32 | 29 | |||||
Total Operating Expenses | 411 | 413 | |||||
Operating Income | 228 | 160 | |||||
Other Income (Expense) - net | 6 | — | |||||
Interest Expense | 37 | 33 | |||||
Income Before Income Taxes | 197 | 127 | |||||
Income Taxes | 49 | 48 | |||||
Net Income (a) | $ | 148 | $ | 79 |
(a) | Net income equals comprehensive income. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 148 | $ | 79 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 85 | 75 | |||||
Amortization | 6 | 8 | |||||
Defined benefit plans - expense | 2 | 5 | |||||
Deferred income taxes and investment tax credits | 21 | 41 | |||||
Other | (5 | ) | — | ||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (30 | ) | (27 | ) | |||
Accounts payable | (36 | ) | (18 | ) | |||
Unbilled revenues | 16 | 12 | |||||
Prepayments | (69 | ) | (75 | ) | |||
Regulatory assets and liabilities, net | 5 | (11 | ) | ||||
Taxes payable | 4 | — | |||||
Other | (19 | ) | (14 | ) | |||
Other operating activities | |||||||
Defined benefit plans - funding | (28 | ) | (24 | ) | |||
Other assets | (25 | ) | 5 | ||||
Other liabilities | 1 | (1 | ) | ||||
Net cash provided by operating activities | 76 | 55 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (245 | ) | (274 | ) | |||
Expenditures for intangible assets | (1 | ) | (2 | ) | |||
Net cash used in investing activities | (246 | ) | (276 | ) | |||
Cash Flows from Financing Activities | |||||||
Contributions from parent | — | 100 | |||||
Payment of common stock dividends to parent | (72 | ) | (76 | ) | |||
Net increase in short-term debt | 213 | 204 | |||||
Net cash provided by financing activities | 141 | 228 | |||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (29 | ) | 7 | ||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 51 | 15 | |||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 22 | $ | 22 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Significant non-cash transactions: | |||||||
Accrued expenditures for property, plant and equipment at March 31, | $ | 147 | $ | 122 |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 20 | $ | 49 | |||
Accounts receivable (less reserve: 2018, $27; 2017, $24) | |||||||
Customer | 328 | 279 | |||||
Other | 10 | 71 | |||||
Accounts receivable from affiliates | 42 | — | |||||
Unbilled revenues | 111 | 127 | |||||
Materials and supplies | 34 | 34 | |||||
Prepayments | 75 | 6 | |||||
Regulatory assets | 16 | 16 | |||||
Other current assets | 12 | 6 | |||||
Total Current Assets | 648 | 588 | |||||
Property, Plant and Equipment | |||||||
Regulated utility plant | 10,950 | 10,785 | |||||
Less: accumulated depreciation - regulated utility plant | 2,815 | 2,778 | |||||
Regulated utility plant, net | 8,135 | 8,007 | |||||
Construction work in progress | 560 | 508 | |||||
Property, Plant and Equipment, net | 8,695 | 8,515 | |||||
Other Noncurrent Assets | |||||||
Regulatory assets | 726 | 709 | |||||
Intangibles | 259 | 259 | |||||
Other noncurrent assets | 15 | 11 | |||||
Total Other Noncurrent Assets | 1,000 | 979 | |||||
Total Assets | $ | 10,343 | $ | 10,082 |
March 31, 2018 | December 31, 2017 | ||||||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term debt | $ | 213 | $ | — | |||
Accounts payable | 362 | 386 | |||||
Accounts payable to affiliates | 32 | 31 | |||||
Taxes | 12 | 8 | |||||
Interest | 38 | 36 | |||||
Regulatory liabilities | 95 | 86 | |||||
Other current liabilities | 83 | 98 | |||||
Total Current Liabilities | 835 | 645 | |||||
Long-term Debt | 3,298 | 3,298 | |||||
Deferred Credits and Other Noncurrent Liabilities | |||||||
Deferred income taxes | 1,184 | 1,154 | |||||
Accrued pension obligations | 215 | 246 | |||||
Regulatory liabilities | 662 | 668 | |||||
Other deferred credits and noncurrent liabilities | 81 | 79 | |||||
Total Deferred Credits and Other Noncurrent Liabilities | 2,142 | 2,147 | |||||
Commitments and Contingent Liabilities (Notes 7 and 10) | |||||||
Equity | |||||||
Common stock - no par value (a) | 364 | 364 | |||||
Additional paid-in capital | 2,729 | 2,729 | |||||
Earnings reinvested | 975 | 899 | |||||
Total Equity | 4,068 | 3,992 | |||||
Total Liabilities and Equity | $ | 10,343 | $ | 10,082 |
(a) | 170,000 shares authorized; 66,368 shares issued and outstanding at March 31, 2018 and December 31, 2017. |
Common stock shares outstanding (a) | Common stock | Additional paid-in capital | Earnings reinvested | Total | ||||||||||||||
December 31, 2017 | 66,368 | $ | 364 | $ | 2,729 | $ | 899 | $ | 3,992 | |||||||||
Net income | 148 | 148 | ||||||||||||||||
Dividends declared on common stock | (72 | ) | (72 | ) | ||||||||||||||
March 31, 2018 | 66,368 | $ | 364 | $ | 2,729 | $ | 975 | $ | 4,068 | |||||||||
December 31, 2016 | 66,368 | $ | 364 | $ | 2,154 | $ | 873 | $ | 3,391 | |||||||||
Net income | 79 | 79 | ||||||||||||||||
Capital contributions from PPL | 100 | 100 | ||||||||||||||||
Dividends declared on common stock | (76 | ) | (76 | ) | ||||||||||||||
March 31, 2017 | 66,368 | $ | 364 | $ | 2,254 | $ | 876 | $ | 3,494 |
(a) | Shares in thousands. All common shares of PPL Electric stock are owned by PPL. |
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Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Operating Revenues | $ | 872 | $ | 809 | |||
Operating Expenses | |||||||
Operation | |||||||
Fuel | 214 | 191 | |||||
Energy purchases | 80 | 69 | |||||
Other operation and maintenance | 205 | 205 | |||||
Depreciation | 117 | 105 | |||||
Taxes, other than income | 17 | 16 | |||||
Total Operating Expenses | 633 | 586 | |||||
Operating Income | 239 | 223 | |||||
Other Income (Expense) - net | (3 | ) | (4 | ) | |||
Interest Expense | 50 | 49 | |||||
Interest Expense with Affiliate | 5 | 4 | |||||
Income Before Income Taxes | 181 | 166 | |||||
Income Taxes | 39 | 63 | |||||
Net Income (a) | $ | 142 | $ | 103 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 142 | $ | 103 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 117 | 105 | |||||
Amortization | 5 | 7 | |||||
Defined benefit plans - expense | 3 | 8 | |||||
Deferred income taxes and investment tax credits | 8 | 48 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (5 | ) | 21 | ||||
Accounts payable | 10 | (28 | ) | ||||
Accounts payable to affiliates | 2 | 7 | |||||
Unbilled revenues | 31 | 22 | |||||
Fuel, materials and supplies | 42 | 41 | |||||
Taxes payable | 7 | (2 | ) | ||||
Accrued interest | 42 | 42 | |||||
Other | (7 | ) | (38 | ) | |||
Other operating activities | |||||||
Defined benefit plans - funding | (108 | ) | (22 | ) | |||
Expenditures for asset retirement obligations | (9 | ) | (6 | ) | |||
Other assets | (3 | ) | 1 | ||||
Other liabilities | 1 | 3 | |||||
Net cash provided by operating activities | 278 | 312 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (294 | ) | (184 | ) | |||
Net cash used in investing activities | (294 | ) | (184 | ) | |||
Cash Flows from Financing Activities | |||||||
Net increase (decrease) in notes payable with affiliate | 12 | (81 | ) | ||||
Issuance of long-term debt | 100 | — | |||||
Distributions to member | (69 | ) | (102 | ) | |||
Net increase (decrease) in short-term debt | (29 | ) | 58 | ||||
Other financing activities | (1 | ) | (1 | ) | |||
Net cash provided by (used in) financing activities | 13 | (126 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | (3 | ) | 2 | ||||
Cash and Cash Equivalents at Beginning of Period | 30 | 13 | |||||
Cash and Cash Equivalents at End of Period | $ | 27 | $ | 15 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Significant non-cash transactions: | |||||||
Accrued expenditures for property, plant and equipment at March 31, | $ | 124 | $ | 75 |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 27 | $ | 30 | |||
Accounts receivable (less reserve: 2018, $26; 2017, $25) | |||||||
Customer | 247 | 246 | |||||
Other | 41 | 44 | |||||
Accounts receivable from affiliates | 1 | — | |||||
Unbilled revenues | 172 | 203 | |||||
Fuel, materials and supplies | 212 | 254 | |||||
Prepayments | 28 | 25 | |||||
Regulatory assets | 12 | 18 | |||||
Other current assets | 5 | 8 | |||||
Total Current Assets | 745 | 828 | |||||
Property, Plant and Equipment | |||||||
Regulated utility plant | 13,226 | 13,187 | |||||
Less: accumulated depreciation - regulated utility plant | 1,866 | 1,785 | |||||
Regulated utility plant, net | 11,360 | 11,402 | |||||
Construction work in progress | 775 | 627 | |||||
Property, Plant and Equipment, net | 12,135 | 12,029 | |||||
Other Noncurrent Assets | |||||||
Regulatory assets | 793 | 795 | |||||
Goodwill | 996 | 996 | |||||
Other intangibles | 84 | 86 | |||||
Other noncurrent assets | 81 | 68 | |||||
Total Other Noncurrent Assets | 1,954 | 1,945 | |||||
Total Assets | $ | 14,834 | $ | 14,802 |
March 31, 2018 | December 31, 2017 | ||||||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term debt | $ | 215 | $ | 244 | |||
Long-term debt due within one year | — | 98 | |||||
Notes payable with affiliates | 237 | 225 | |||||
Accounts payable | 292 | 338 | |||||
Accounts payable to affiliates | 9 | 7 | |||||
Customer deposits | 59 | 58 | |||||
Taxes | 73 | 66 | |||||
Price risk management liabilities | 4 | 4 | |||||
Regulatory liabilities | 63 | 9 | |||||
Interest | 74 | 32 | |||||
Asset retirement obligations | 91 | 85 | |||||
Other current liabilities | 94 | 161 | |||||
Total Current Liabilities | 1,211 | 1,327 | |||||
Long-term Debt | |||||||
Long-term debt | 4,859 | 4,661 | |||||
Long-term debt to affiliate | 400 | 400 | |||||
Total Long-term Debt | 5,259 | 5,061 | |||||
Deferred Credits and Other Noncurrent Liabilities | |||||||
Deferred income taxes | 882 | 866 | |||||
Investment tax credits | 128 | 129 | |||||
Price risk management liabilities | 18 | 22 | |||||
Accrued pension obligations | 265 | 365 | |||||
Asset retirement obligations | 249 | 271 | |||||
Regulatory liabilities | 2,027 | 2,036 | |||||
Other deferred credits and noncurrent liabilities | 158 | 162 | |||||
Total Deferred Credits and Other Noncurrent Liabilities | 3,727 | 3,851 | |||||
Commitments and Contingent Liabilities (Notes 7 and 10) | |||||||
Member's Equity | 4,637 | 4,563 | |||||
Total Liabilities and Equity | $ | 14,834 | $ | 14,802 |
Member's Equity | |||
December 31, 2017 | $ | 4,563 | |
Net income | 142 | ||
Distributions to member | (69 | ) | |
Other comprehensive income | 1 | ||
March 31, 2018 | $ | 4,637 | |
December 31, 2016 | $ | 4,667 | |
Net income | 103 | ||
Distributions to member | (102 | ) | |
Other comprehensive income | 2 | ||
March 31, 2017 | $ | 4,670 |
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Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Operating Revenues | |||||||
Retail and wholesale | $ | 407 | $ | 374 | |||
Electric revenue from affiliate | 12 | 17 | |||||
Total Operating Revenues | 419 | 391 | |||||
Operating Expenses | |||||||
Operation | |||||||
Fuel | 79 | 80 | |||||
Energy purchases | 76 | 64 | |||||
Energy purchases from affiliate | 6 | 2 | |||||
Other operation and maintenance | 89 | 85 | |||||
Depreciation | 48 | 44 | |||||
Taxes, other than income | 9 | 8 | |||||
Total Operating Expenses | 307 | 283 | |||||
Operating Income | 112 | 108 | |||||
Other Income (Expense) - net | (1 | ) | (4 | ) | |||
Interest Expense | 18 | 17 | |||||
Income Before Income Taxes | 93 | 87 | |||||
Income Taxes | 21 | 33 | |||||
Net Income (a) | $ | 72 | $ | 54 |
(a) | Net income equals comprehensive income. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 72 | $ | 54 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 48 | 44 | |||||
Amortization | 4 | 3 | |||||
Defined benefit plans - expense | 1 | 2 | |||||
Deferred income taxes and investment tax credits | 7 | 31 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | 2 | 13 | |||||
Accounts receivable from affiliates | (7 | ) | 1 | ||||
Accounts payable | 8 | (12 | ) | ||||
Accounts payable to affiliates | (2 | ) | (4 | ) | |||
Unbilled revenues | 16 | 9 | |||||
Fuel, materials and supplies | 36 | 33 | |||||
Taxes payable | (1 | ) | (28 | ) | |||
Accrued interest | 13 | 13 | |||||
Other | 12 | (11 | ) | ||||
Other operating activities | |||||||
Defined benefit plans - funding | (55 | ) | (1 | ) | |||
Expenditures for asset retirement obligations | (5 | ) | (4 | ) | |||
Other assets | — | 2 | |||||
Other liabilities | (3 | ) | (3 | ) | |||
Net cash provided by operating activities | 146 | 142 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (150 | ) | (94 | ) | |||
Net cash used in investing activities | (150 | ) | (94 | ) | |||
Cash Flows from Financing Activities | |||||||
Issuance of long-term debt | 100 | — | |||||
Net increase (decrease) in short-term debt | (62 | ) | 38 | ||||
Payment of common stock dividends to parent | (34 | ) | (87 | ) | |||
Other financing activities | (1 | ) | — | ||||
Net cash provided by (used in) financing activities | 3 | (49 | ) | ||||
Net Decrease in Cash and Cash Equivalents | (1 | ) | (1 | ) | |||
Cash and Cash Equivalents at Beginning of Period | 15 | 5 | |||||
Cash and Cash Equivalents at End of Period | $ | 14 | $ | 4 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Significant non-cash transactions: | |||||||
Accrued expenditures for property, plant and equipment at March 31, | $ | 75 | $ | 34 |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 14 | $ | 15 | |||
Accounts receivable (less reserve: 2018, $1; 2017, $1) | |||||||
Customer | 111 | 116 | |||||
Other | 14 | 13 | |||||
Unbilled revenues | 75 | 91 | |||||
Accounts receivable from affiliates | 31 | 24 | |||||
Fuel, materials and supplies | 95 | 131 | |||||
Prepayments | 12 | 11 | |||||
Regulatory assets | 10 | 12 | |||||
Other current assets | 1 | 3 | |||||
Total Current Assets | 363 | 416 | |||||
Property, Plant and Equipment | |||||||
Regulated utility plant | 5,597 | 5,587 | |||||
Less: accumulated depreciation - regulated utility plant | 646 | 614 | |||||
Regulated utility plant, net | 4,951 | 4,973 | |||||
Construction work in progress | 401 | 305 | |||||
Property, Plant and Equipment, net | 5,352 | 5,278 | |||||
Other Noncurrent Assets | |||||||
Regulatory assets | 406 | 411 | |||||
Goodwill | 389 | 389 | |||||
Other intangibles | 51 | 53 | |||||
Other noncurrent assets | 26 | 12 | |||||
Total Other Noncurrent Assets | 872 | 865 | |||||
Total Assets | $ | 6,587 | $ | 6,559 |
March 31, 2018 | December 31, 2017 | ||||||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term debt | $ | 137 | $ | 199 | |||
Long-term debt due within one year | — | 98 | |||||
Accounts payable | 170 | 179 | |||||
Accounts payable to affiliates | 21 | 23 | |||||
Customer deposits | 28 | 27 | |||||
Taxes | 24 | 25 | |||||
Price risk management liabilities | 4 | 4 | |||||
Regulatory liabilities | 29 | 3 | |||||
Interest | 24 | 11 | |||||
Asset retirement obligations | 19 | 24 | |||||
Other current liabilities | 34 | 52 | |||||
Total Current Liabilities | 490 | 645 | |||||
Long-term Debt | 1,808 | 1,611 | |||||
Deferred Credits and Other Noncurrent Liabilities | |||||||
Deferred income taxes | 582 | 572 | |||||
Investment tax credits | 35 | 35 | |||||
Price risk management liabilities | 18 | 22 | |||||
Accrued pension obligations | — | 45 | |||||
Asset retirement obligations | 92 | 97 | |||||
Regulatory liabilities | 912 | 919 | |||||
Other deferred credits and noncurrent liabilities | 85 | 86 | |||||
Total Deferred Credits and Other Noncurrent Liabilities | 1,724 | 1,776 | |||||
Commitments and Contingent Liabilities (Notes 7 and 10) | |||||||
Stockholder's Equity | |||||||
Common stock - no par value (a) | 424 | 424 | |||||
Additional paid-in capital | 1,712 | 1,712 | |||||
Earnings reinvested | 429 | 391 | |||||
Total Equity | 2,565 | 2,527 | |||||
Total Liabilities and Equity | $ | 6,587 | $ | 6,559 |
(a) | 75,000 shares authorized; 21,294 shares issued and outstanding at March 31, 2018 and December 31, 2017. |
Common stock shares outstanding (a) | Common stock | Additional paid-in capital | Earnings reinvested | Total | ||||||||||||||
December 31, 2017 | 21,294 | $ | 424 | $ | 1,712 | $ | 391 | $ | 2,527 | |||||||||
Net income | 72 | 72 | ||||||||||||||||
Cash dividends declared on common stock | (34 | ) | (34 | ) | ||||||||||||||
March 31, 2018 | 21,294 | $ | 424 | $ | 1,712 | $ | 429 | $ | 2,565 | |||||||||
December 31, 2016 | 21,294 | $ | 424 | $ | 1,682 | $ | 370 | $ | 2,476 | |||||||||
Net income | 54 | 54 | ||||||||||||||||
Cash dividends declared on common stock | (87 | ) | (87 | ) | ||||||||||||||
March 31, 2017 | 21,294 | $ | 424 | $ | 1,682 | $ | 337 | $ | 2,443 |
(a) | Shares in thousands. All common shares of LG&E stock are owned by LKE. |
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Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Operating Revenues | |||||||
Retail and wholesale | $ | 465 | $ | 435 | |||
Electric revenue from affiliate | 6 | 2 | |||||
Total Operating Revenues | 471 | 437 | |||||
Operating Expenses | |||||||
Operation | |||||||
Fuel | 135 | 111 | |||||
Energy purchases | 4 | 5 | |||||
Energy purchases from affiliate | 12 | 17 | |||||
Other operation and maintenance | 105 | 108 | |||||
Depreciation | 68 | 60 | |||||
Taxes, other than income | 8 | 8 | |||||
Total Operating Expenses | 332 | 309 | |||||
Operating Income | 139 | 128 | |||||
Other Income (Expense) - net | (3 | ) | (2 | ) | |||
Interest Expense | 25 | 24 | |||||
Income Before Income Taxes | 111 | 102 | |||||
Income Taxes | 24 | 39 | |||||
Net Income (a) | $ | 87 | $ | 63 |
(a) | Net income approximates comprehensive income. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 87 | $ | 63 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 68 | 60 | |||||
Amortization | 1 | 4 | |||||
Defined benefit plans - expense | — | 2 | |||||
Deferred income taxes and investment tax credits | 1 | 37 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (7 | ) | 8 | ||||
Accounts payable | 11 | (4 | ) | ||||
Accounts payable to affiliates | — | (7 | ) | ||||
Unbilled revenues | 15 | 13 | |||||
Fuel, materials and supplies | 6 | 8 | |||||
Taxes payable | 14 | (34 | ) | ||||
Accrued interest | 22 | 22 | |||||
Other | 17 | (12 | ) | ||||
Other operating activities | |||||||
Defined benefit plans - funding | (47 | ) | (19 | ) | |||
Expenditures for asset retirement obligations | (4 | ) | (2 | ) | |||
Other assets | (3 | ) | (1 | ) | |||
Other liabilities | 4 | 1 | |||||
Net cash provided by operating activities | 185 | 139 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (143 | ) | (89 | ) | |||
Net cash used in investing activities | (143 | ) | (89 | ) | |||
Cash Flows from Financing Activities | |||||||
Payment of common stock dividends to parent | (79 | ) | (70 | ) | |||
Net increase in short-term debt | 33 | 20 | |||||
Net cash used in financing activities | (46 | ) | (50 | ) | |||
Net Decrease in Cash and Cash Equivalents | (4 | ) | — | ||||
Cash and Cash Equivalents at Beginning of Period | 15 | 7 | |||||
Cash and Cash Equivalents at End of Period | $ | 11 | $ | 7 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Significant non-cash transactions: | |||||||
Accrued expenditures for property, plant and equipment at March 31, | $ | 48 | $ | 41 |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 11 | $ | 15 | |||
Accounts receivable (less reserve: 2018, $2; 2017, $1) | |||||||
Customer | 136 | 130 | |||||
Other | 26 | 30 | |||||
Unbilled revenues | 97 | 112 | |||||
Fuel, materials and supplies | 117 | 123 | |||||
Prepayments | 14 | 14 | |||||
Regulatory assets | 2 | 6 | |||||
Other current assets | 4 | 5 | |||||
Total Current Assets | 407 | 435 | |||||
Property, Plant and Equipment | |||||||
Regulated utility plant | 7,620 | 7,592 | |||||
Less: accumulated depreciation - regulated utility plant | 1,218 | 1,170 | |||||
Regulated utility plant, net | 6,402 | 6,422 | |||||
Construction work in progress | 373 | 321 | |||||
Property, Plant and Equipment, net | 6,775 | 6,743 | |||||
Other Noncurrent Assets | |||||||
Regulatory assets | 387 | 384 | |||||
Goodwill | 607 | 607 | |||||
Other intangibles | 33 | 33 | |||||
Other noncurrent assets | 67 | 52 | |||||
Total Other Noncurrent Assets | 1,094 | 1,076 | |||||
Total Assets | $ | 8,276 | $ | 8,254 |
March 31, 2018 | December 31, 2017 | ||||||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term debt | $ | 78 | $ | 45 | |||
Accounts payable | 109 | 137 | |||||
Accounts payable to affiliates | 54 | 53 | |||||
Customer deposits | 31 | 31 | |||||
Taxes | 33 | 19 | |||||
Regulatory liabilities | 34 | 6 | |||||
Interest | 38 | 16 | |||||
Asset retirement obligations | 72 | 61 | |||||
Other current liabilities | 30 | 46 | |||||
Total Current Liabilities | 479 | 414 | |||||
Long-term Debt | 2,329 | 2,328 | |||||
Deferred Credits and Other Noncurrent Liabilities | |||||||
Deferred income taxes | 696 | 691 | |||||
Investment tax credits | 93 | 94 | |||||
Accrued pension obligations | — | 36 | |||||
Asset retirement obligations | 157 | 174 | |||||
Regulatory liabilities | 1,115 | 1,117 | |||||
Other deferred credits and noncurrent liabilities | 42 | 43 | |||||
Total Deferred Credits and Other Noncurrent Liabilities | 2,103 | 2,155 | |||||
Commitments and Contingent Liabilities (Notes 7 and 10) | |||||||
Stockholder's Equity | |||||||
Common stock - no par value (a) | 308 | 308 | |||||
Additional paid-in capital | 2,616 | 2,616 | |||||
Earnings reinvested | 441 | 433 | |||||
Total Equity | 3,365 | 3,357 | |||||
Total Liabilities and Equity | $ | 8,276 | $ | 8,254 |
(a) | 80,000 shares authorized; 37,818 shares issued and outstanding at March 31, 2018 and December 31, 2017. |
Common stock shares outstanding (a) | Common stock | Additional paid-in capital | Earnings reinvested | Accumulated other comprehensive loss | Total | |||||||||||||||||
December 31, 2017 | 37,818 | $ | 308 | $ | 2,616 | $ | 433 | $ | — | $ | 3,357 | |||||||||||
Net income | 87 | 87 | ||||||||||||||||||||
Cash dividends declared on common stock | (79 | ) | (79 | ) | ||||||||||||||||||
March 31, 2018 | 37,818 | $ | 308 | $ | 2,616 | $ | 441 | $ | — | $ | 3,365 | |||||||||||
December 31, 2016 | 37,818 | $ | 308 | $ | 2,616 | $ | 400 | $ | (1 | ) | $ | 3,323 | ||||||||||
Net income | 63 | 63 | ||||||||||||||||||||
Cash dividends declared on common stock | (70 | ) | (70 | ) | ||||||||||||||||||
Other comprehensive income (loss) | 1 | 1 | ||||||||||||||||||||
March 31, 2017 | 37,818 | $ | 308 | $ | 2,616 | $ | 393 | $ | — | $ | 3,317 |
(a) | Shares in thousands. All common shares of KU stock are owned by LKE. |
Three Months | |||||||
2018 | 2017 | ||||||
PPL | $ | 68 | $ | 38 | |||
PPL Electric | 2 | (1 | ) | ||||
LKE | 2 | (2 | ) | ||||
LG&E | 1 | (2 | ) | ||||
KU | 1 | (1 | ) |
PPL | PPL Electric | ||||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||
Cash and cash equivalents | $ | 629 | $ | 485 | $ | 20 | $ | 49 | |||||||
Restricted cash - current (a) | 3 | 3 | 2 | 2 | |||||||||||
Restricted cash - noncurrent (a) | 21 | 23 | — | — | |||||||||||
Total Cash, Cash Equivalents and Restricted Cash | $ | 653 | $ | 511 | $ | 22 | $ | 51 |
(a) | Bank deposits and other cash equivalents that are restricted by agreement or that have been clearly designated for a specific purpose are classified as restricted cash. On the Balance Sheets, the current portion of restricted cash is included in "Other current assets," while the noncurrent portion is included in "Other noncurrent assets." |
Three Months | |||||||
2018 | 2017 | ||||||
Operating Revenues from external customers | |||||||
U.K. Regulated | $ | 615 | $ | 568 | |||
Kentucky Regulated | 872 | 809 | |||||
Pennsylvania Regulated | 639 | 573 | |||||
Corporate and Other | — | 1 | |||||
Total | $ | 2,126 | $ | 1,951 | |||
Net Income | |||||||
U.K. Regulated (a) | $ | 197 | $ | 286 | |||
Kentucky Regulated | 133 | 95 | |||||
Pennsylvania Regulated | 148 | 79 | |||||
Corporate and Other | (26 | ) | (57 | ) | |||
Total | $ | 452 | $ | 403 |
(a) | Includes unrealized gains and losses from hedging foreign currency economic activity. See Note 14 for additional information. |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
U.K. Regulated (a) | $ | 17,444 | $ | 16,813 | |||
Kentucky Regulated | 14,500 | 14,468 | |||||
Pennsylvania Regulated | 10,356 | 10,082 | |||||
Corporate and Other (b) | 88 | 116 | |||||
Total | $ | 42,388 | $ | 41,479 |
(a) | Includes $12.9 billion and $12.5 billion of net PP&E as of March 31, 2018 and December 31, 2017. WPD is not subject to accounting for the effects of certain types of regulation as prescribed by GAAP. |
(b) | Primarily consists of unallocated items, including cash, PP&E and the elimination of inter-segment transactions. |
Three Months | |||||||||||||||||||
PPL | PPL Electric | LKE | LG&E | KU | |||||||||||||||
Operating Revenues (a) | $ | 2,126 | $ | 639 | $ | 872 | $ | 419 | $ | 471 | |||||||||
Revenues derived from: | |||||||||||||||||||
Alternative revenue programs (b) | 32 | 2 | 30 | 14 | 16 | ||||||||||||||
Other (c) | (16 | ) | (4 | ) | (5 | ) | (1 | ) | (4 | ) | |||||||||
Revenues from Contracts with Customers | $ | 2,142 | $ | 637 | $ | 897 | $ | 432 | $ | 483 |
(a) | PPL includes $615 million of revenues from external customers reported by the U.K. Regulated segment. PPL Electric and LKE represent revenues from external customers reported by the Pennsylvania Regulated and Kentucky Regulated segments. See Note 3 for additional information. |
(b) | Alternative revenue programs for PPL Electric include the over/under-collection of its transmission formula rate. Alternative revenue programs for LKE, LG&E and KU include the over/under collection for the ECR and DSM programs as well as LG&E's over/under collection of its GLT program and KU's over/under collection of its generation formula rate. Over-collections of revenue are shown as positive amounts in the table above; under-collections are shown as negative amounts. |
(c) | Represents additional revenues outside the scope of revenues from contracts with customers such as leases and other miscellaneous revenues. |
Three Months | |||||||||||||||||||
PPL | PPL Electric | LKE | LG&E | KU | |||||||||||||||
Licensed energy suppliers (a) | $ | 584 | $ | — | $ | — | $ | — | $ | — | |||||||||
Residential | 804 | 408 | 396 | 197 | 199 | ||||||||||||||
Commercial | 325 | 98 | 227 | 124 | 103 | ||||||||||||||
Industrial | 155 | 13 | 142 | 44 | 98 | ||||||||||||||
Other (b) | 105 | 13 | 68 | 31 | 37 | ||||||||||||||
Wholesale - municipal | 30 | — | 30 | — | 30 | ||||||||||||||
Wholesale - other (c) | 34 | — | 34 | 36 | 16 | ||||||||||||||
Transmission | 105 | 105 | — | — | — | ||||||||||||||
Revenues from Contracts with Customers | $ | 2,142 | $ | 637 | $ | 897 | $ | 432 | $ | 483 |
(a) | Represents customers of WPD. |
(b) | Primarily includes revenues from pole attachments, street lighting and other public authorities. |
(c) | Includes wholesale power and transmission revenues. LG&E and KU amounts include intercompany power sales and transmission revenues, which are eliminated upon consolidation at LKE. |
Three Months | |||
PPL | $ | 10 | |
PPL Electric | 7 | ||
LKE | 2 | ||
LG&E | 1 | ||
KU | 1 |
PPL | PPL Electric | LKE | LG&E | KU | |||||||||||||||
Contract liabilities as of December 31, 2017 | $ | 29 | $ | 19 | $ | 8 | $ | 4 | $ | 4 | |||||||||
Contract liabilities as of March 31, 2018 | 20 | 11 | 7 | 3 | 4 | ||||||||||||||
Revenue recognized during the period that was included in the opening contract liability balance | 17 | 8 | 8 | 4 | 4 |
Three Months | |||||||
2018 | 2017 | ||||||
Income (Numerator) | |||||||
Net income | $ | 452 | $ | 403 | |||
Less amounts allocated to participating securities | 1 | 1 | |||||
Net income available to PPL common shareowners - Basic and Diluted | $ | 451 | $ | 402 | |||
Shares of Common Stock (Denominator) | |||||||
Weighted-average shares - Basic EPS | 694,514 | 680,882 | |||||
Add incremental non-participating securities: | |||||||
Share-based payment awards | 808 | 2,202 | |||||
Weighted-average shares - Diluted EPS | 695,322 | 683,084 | |||||
Three Months | |||||||
2018 | 2017 | ||||||
Basic EPS | |||||||
Net Income available to PPL common shareowners | $ | 0.65 | $ | 0.59 | |||
Diluted EPS | |||||||
Net Income available to PPL common shareowners | $ | 0.65 | $ | 0.59 |
Three Months | |||||
2018 | 2017 | ||||
Stock-based compensation plans (a) | 476 | 887 | |||
DRIP | 485 | 445 |
(a) | Includes stock options exercised, vesting of performance units, vesting of restricted stock units and conversion of stock units granted to directors. |
Three Months | |||||
2018 | 2017 | ||||
Stock options | 230 | 696 | |||
Restricted stock units | 20 | — |
(PPL) | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
Federal income tax on Income Before Income Taxes at statutory tax rate (a) | $ | 119 | $ | 186 | |||
Increase (decrease) due to: | |||||||
State income taxes, net of federal income tax benefit | 15 | 13 | |||||
Valuation allowance adjustments | 7 | 5 | |||||
Impact of lower U.K. income tax rates relative to U.S. income tax rates (a) | (7 | ) | (48 | ) | |||
U.S. income tax on foreign earnings - net of foreign tax credit (a) (b) | 1 | (9 | ) | ||||
Impact of the U.K. Finance Acts | (1 | ) | (3 | ) | |||
Depreciation and other items not normalized (a) | (12 | ) | (3 | ) | |||
Interest benefit on U.K. financing entities | (5 | ) | (4 | ) | |||
Stock-based compensation | 1 | (3 | ) | ||||
Other | (1 | ) | (5 | ) | |||
Total increase (decrease) | (2 | ) | (57 | ) | |||
Total income taxes | $ | 117 | $ | 129 |
(a) | The U.S. federal corporate income tax rate was reduced from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. |
(b) | Lower income taxes in 2017 primarily due to the tax benefit of accelerated pension contributions made in the first quarter of 2017. The related tax benefit was recognized over the annual period as a result of utilizing an estimated annual effective tax rate. |
(PPL Electric) | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
Federal income tax on Income Before Income Taxes at statutory tax rate (a) | $ | 41 | $ | 44 | |||
Increase (decrease) due to: | |||||||
State income taxes, net of federal income tax benefit | 15 | 8 | |||||
Depreciation and other items not normalized (a) | (7 | ) | (2 | ) | |||
Stock-based compensation | — | (2 | ) | ||||
Total increase (decrease) | 8 | 4 | |||||
Total income taxes | $ | 49 | $ | 48 |
(a) | The U.S. federal corporate income tax rate was reduced from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. |
(LKE) | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
Federal income tax on Income Before Income Taxes at statutory tax rate (a) | $ | 38 | $ | 58 | |||
Increase (decrease) due to: | |||||||
State income taxes, net of federal income tax benefit | 8 | 6 | |||||
Amortization of excess deferred income taxes (a) | (5 | ) | — | ||||
Other | (2 | ) | (1 | ) | |||
Total increase (decrease) | 1 | 5 | |||||
Total income taxes | $ | 39 | $ | 63 |
(a) | The U.S. federal corporate income tax rate was reduced from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. |
(LG&E) | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
Federal income tax on Income Before Income Taxes at statutory tax rate (a) | $ | 20 | $ | 30 | |||
Increase (decrease) due to: | |||||||
State income taxes, net of federal income tax benefit | 4 | 3 | |||||
Amortization of excess deferred income taxes (a) | (2 | ) | — | ||||
Other | (1 | ) | — | ||||
Total increase (decrease) | 1 | 3 | |||||
Total income taxes | $ | 21 | $ | 33 |
(a) | The U.S. federal corporate income tax rate was reduced from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. |
(KU) | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
Federal income tax on Income Before Income Taxes at statutory tax rate (a) | $ | 23 | $ | 36 | |||
Increase (decrease) due to: | |||||||
State income taxes, net of federal income tax benefit | 5 | 4 | |||||
Amortization of excess deferred income taxes (a) | (3 | ) | — | ||||
Other | (1 | ) | (1 | ) | |||
Total increase (decrease) | 1 | 3 | |||||
Total income taxes | $ | 24 | $ | 39 |
(a) | The U.S. federal corporate income tax rate was reduced from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. |
PPL | PPL Electric | ||||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||
Current Regulatory Assets: | |||||||||||||||
Environmental cost recovery | $ | — | $ | 5 | $ | — | $ | — | |||||||
Generation formula rate | 2 | 6 | — | — | |||||||||||
Smart meter rider | 15 | 15 | 15 | 15 | |||||||||||
Plant outage costs | 6 | 3 | — | — | |||||||||||
Other | 5 | 5 | 1 | 1 | |||||||||||
Total current regulatory assets (a) | $ | 28 | $ | 34 | $ | 16 | $ | 16 | |||||||
Noncurrent Regulatory Assets: | |||||||||||||||
Defined benefit plans | $ | 866 | $ | 880 | $ | 496 | $ | 504 | |||||||
Taxes recoverable through future rates | 3 | 3 | 3 | 3 | |||||||||||
Storm costs (b) | 47 | 33 | 17 | — | |||||||||||
Unamortized loss on debt | 51 | 54 | 27 | 29 | |||||||||||
Interest rate swaps | 22 | 26 | — | — | |||||||||||
Terminated interest rate swaps | 91 | 92 | — | — | |||||||||||
Accumulated cost of removal of utility plant | 176 | 173 | 176 | 173 | |||||||||||
AROs | 247 | 234 | — | — | |||||||||||
Act 129 compliance rider | 7 | — | 7 | — | |||||||||||
Other | 9 | 9 | — | — | |||||||||||
Total noncurrent regulatory assets | $ | 1,519 | $ | 1,504 | $ | 726 | $ | 709 |
PPL | PPL Electric | ||||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||
Current Regulatory Liabilities: | |||||||||||||||
Generation supply charge | $ | 33 | $ | 34 | $ | 33 | $ | 34 | |||||||
Transmission service charge | 16 | 9 | 16 | 9 | |||||||||||
Environmental cost recovery | 18 | 1 | — | — | |||||||||||
Universal service rider | 24 | 26 | 24 | 26 | |||||||||||
Transmission formula rate | 10 | 9 | 10 | 9 | |||||||||||
Fuel adjustment clause | 2 | 3 | — | — | |||||||||||
TCJA bill credit (c) | 34 | — | — | — | |||||||||||
Storm damage expense rider | 12 | 8 | 12 | 8 | |||||||||||
Other | 9 | 5 | — | — | |||||||||||
Total current regulatory liabilities | $ | 158 | $ | 95 | $ | 95 | $ | 86 | |||||||
Noncurrent Regulatory Liabilities: | |||||||||||||||
Accumulated cost of removal of utility plant | $ | 677 | $ | 677 | $ | — | $ | — | |||||||
Power purchase agreement - OVEC (d) | 66 | 68 | — | — | |||||||||||
Net deferred taxes (e) | 1,839 | 1,853 | 660 | 668 | |||||||||||
Defined benefit plans | 28 | 27 | — | — | |||||||||||
Terminated interest rate swaps | 74 | 74 | — | — | |||||||||||
Other | 5 | 5 | 2 | — | |||||||||||
Total noncurrent regulatory liabilities | $ | 2,689 | $ | 2,704 | $ | 662 | $ | 668 |
LKE | LG&E | KU | |||||||||||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||
Current Regulatory Assets: | |||||||||||||||||||||||
Environmental cost recovery | $ | — | $ | 5 | $ | — | $ | 5 | $ | — | $ | — | |||||||||||
Generation formula rate | 2 | 6 | — | — | 2 | 6 | |||||||||||||||||
Plant outage costs | 6 | 3 | 6 | 3 | — | — | |||||||||||||||||
Other | 4 | 4 | 4 | 4 | — | — | |||||||||||||||||
Total current regulatory assets | $ | 12 | $ | 18 | $ | 10 | $ | 12 | $ | 2 | $ | 6 | |||||||||||
Noncurrent Regulatory Assets: | |||||||||||||||||||||||
Defined benefit plans | $ | 370 | $ | 376 | $ | 230 | $ | 234 | $ | 140 | $ | 142 | |||||||||||
Storm costs | 30 | 33 | 16 | 18 | 14 | 15 | |||||||||||||||||
Unamortized loss on debt | 24 | 25 | 15 | 16 | 9 | 9 | |||||||||||||||||
Interest rate swaps | 22 | 26 | 22 | 26 | — | — | |||||||||||||||||
Terminated interest rate swaps | 91 | 92 | 53 | 54 | 38 | 38 | |||||||||||||||||
AROs | 247 | 234 | 67 | 61 | 180 | 173 | |||||||||||||||||
Other | 9 | 9 | 3 | 2 | 6 | 7 | |||||||||||||||||
Total noncurrent regulatory assets | $ | 793 | $ | 795 | $ | 406 | $ | 411 | $ | 387 | $ | 384 |
LKE | LG&E | KU | |||||||||||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||
Current Regulatory Liabilities: | |||||||||||||||||||||||
Environmental cost recovery | $ | 18 | $ | 1 | $ | 7 | $ | — | $ | 11 | $ | 1 | |||||||||||
Fuel adjustment clause | 2 | 3 | — | — | 2 | 3 | |||||||||||||||||
Gas line tracker | 2 | 3 | 2 | 3 | — | — | |||||||||||||||||
TCJA bill credit (c) | 34 | — | 16 | — | 18 | — | |||||||||||||||||
Other | 7 | 2 | 4 | — | 3 | 2 | |||||||||||||||||
Total current regulatory liabilities | $ | 63 | $ | 9 | $ | 29 | $ | 3 | $ | 34 | $ | 6 | |||||||||||
Noncurrent Regulatory Liabilities: | |||||||||||||||||||||||
Accumulated cost of removal of utility plant | $ | 677 | $ | 677 | $ | 280 | $ | 282 | $ | 397 | 395 | ||||||||||||
Power purchase agreement - OVEC (d) | 66 | 68 | 46 | 47 | 20 | 21 | |||||||||||||||||
Net deferred taxes (e) | 1,179 | 1,185 | 549 | 552 | 630 | 633 | |||||||||||||||||
Defined benefit plans | 28 | 27 | — | — | 28 | 27 | |||||||||||||||||
Terminated interest rate swaps | 74 | 74 | 37 | 37 | 37 | 37 | |||||||||||||||||
Other | 3 | 5 | — | 1 | 3 | 4 | |||||||||||||||||
Total noncurrent regulatory liabilities | $ | 2,027 | $ | 2,036 | $ | 912 | $ | 919 | $ | 1,115 | $ | 1,117 |
(a) | For PPL, these amounts are included in "Other current assets" on the Balance Sheets. |
(b) | Storm costs incurred in PPL Electric's territory from a March 2018 storm will be amortized from 2019 through 2021. |
(c) | Relates to estimated amounts owed to customers as a result of the reduced U.S. federal corporate income tax rate as enacted by the TCJA, effective January 1, 2018, not yet reflected in customer rates. |
(d) | This liability was recorded as an offset to an intangible asset that was recorded at fair value upon the acquisition of LKE by PPL. |
(e) | Primarily relates to excess deferred taxes recorded as a result of the TCJA, which reduced the U.S. federal corporate income tax rate effective January 1, 2018, requiring deferred tax balances and the associated regulatory liabilities to be remeasured as of December 31, 2017. |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||
Expiration Date | Capacity | Borrowed | Letters of Credit and Commercial Paper Issued | Unused Capacity | Borrowed | Letters of Credit and Commercial Paper Issued | |||||||||||||||||||
PPL | |||||||||||||||||||||||||
U.K. | |||||||||||||||||||||||||
WPD plc | |||||||||||||||||||||||||
Syndicated Credit Facility (a) | Jan. 2022 | £ | 210 | £ | 145 | £ | — | £ | 67 | £ | 148 | £ | — | ||||||||||||
Term Loan Facility (b) | Dec. 2018 | 130 | 130 | — | — | — | — | ||||||||||||||||||
WPD (South West) | |||||||||||||||||||||||||
Syndicated Credit Facility | July 2021 | 245 | — | — | 245 | — | — | ||||||||||||||||||
WPD (East Midlands) | |||||||||||||||||||||||||
Syndicated Credit Facility (c) | July 2021 | 300 | 157 | — | 143 | 180 | — | ||||||||||||||||||
WPD (West Midlands) | |||||||||||||||||||||||||
Syndicated Credit Facility (d) | July 2021 | 300 | 65 | — | 235 | 120 | — | ||||||||||||||||||
Uncommitted Credit Facilities | 130 | — | 4 | 126 | — | 4 | |||||||||||||||||||
Total U.K. Credit Facilities (e) | £ | 1,315 | £ | 497 | £ | 4 | £ | 816 | £ | 448 | £ | 4 | |||||||||||||
U.S. | |||||||||||||||||||||||||
PPL Capital Funding | |||||||||||||||||||||||||
Syndicated Credit Facility | Jan. 2023 | $ | 950 | $ | — | $ | 345 | $ | 605 | $ | — | $ | 230 | ||||||||||||
Syndicated Credit Facility | Nov. 2018 | 300 | — | — | 300 | — | — | ||||||||||||||||||
Bilateral Credit Facility | Mar. 2019 | 100 | — | 24 | 76 | — | 18 | ||||||||||||||||||
Total PPL Capital Funding Credit Facilities | $ | 1,350 | $ | — | $ | 369 | $ | 981 | $ | — | $ | 248 | |||||||||||||
PPL Electric | |||||||||||||||||||||||||
Syndicated Credit Facility | Jan. 2023 | $ | 650 | $ | — | $ | 214 | $ | 436 | $ | — | $ | 1 | ||||||||||||
LKE | |||||||||||||||||||||||||
Syndicated Credit Facility | Oct. 2018 | $ | 75 | $ | — | $ | — | $ | 75 | $ | — | $ | — | ||||||||||||
LG&E | |||||||||||||||||||||||||
Syndicated Credit Facility | Jan. 2023 | $ | 500 | $ | — | $ | 137 | $ | 363 | $ | — | $ | 199 | ||||||||||||
Term Loan Credit Facility | Oct. 2019 | 200 | 200 | — | — | 100 | — | ||||||||||||||||||
Total LG&E Credit Facilities | $ | 700 | $ | 200 | $ | 137 | $ | 363 | $ | 100 | $ | 199 | |||||||||||||
KU | |||||||||||||||||||||||||
Syndicated Credit Facility | Jan. 2023 | $ | 400 | $ | — | $ | 78 | $ | 322 | $ | — | $ | 45 | ||||||||||||
Letter of Credit Facility | Oct. 2020 | 198 | — | 198 | — | — | 198 | ||||||||||||||||||
Total KU Credit Facilities | $ | 598 | $ | — | $ | 276 | $ | 322 | $ | — | $ | 243 |
(a) | The amounts borrowed at March 31, 2018 and December 31, 2017 were USD-denominated borrowings of $200 million for both periods, which bore interest at 2.47% and 2.17%. The unused capacity reflects the amount borrowed in GBP of £143 million as of the date borrowed. |
(b) | The amount borrowed at March 31, 2018 was a GBP-denominated borrowing which equated to $179 million and bore interest at 1.77%. |
(c) | The amounts borrowed at March 31, 2018 and December 31, 2017 were GBP-denominated borrowings which equated to $216 million and $244 million and bore interest at 0.90% and 0.89%. |
(d) | The amounts borrowed at March 31, 2018 and December 31, 2017 were GBP-denominated borrowings which equated to $89 million and $162 million and bore interest at 0.90% and 0.89%. |
(e) | At March 31, 2018, the unused capacity under the U.K. credit facilities was $1.1 billion. |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||
Weighted - Average Interest Rate | Capacity | Commercial Paper Issuances | Unused Capacity | Weighted - Average Interest Rate | Commercial Paper Issuances | ||||||||||||||
PPL Capital Funding | 2.44% | $ | 1,000 | $ | 345 | $ | 655 | 1.64% | $ | 230 | |||||||||
PPL Electric | 2.42% | 650 | 213 | 437 | — | ||||||||||||||
LG&E | 2.23% | 350 | 137 | 213 | 1.83% | 199 | |||||||||||||
KU | 2.35% | 350 | 78 | 272 | 1.97% | 45 | |||||||||||||
Total | $ | 2,350 | $ | 773 | $ | 1,577 | $ | 474 |
Pension Benefits | |||||||||||||||
Three Months | |||||||||||||||
U.S. | U.K. | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
PPL | |||||||||||||||
Service cost | $ | 16 | $ | 17 | $ | 21 | $ | 19 | |||||||
Interest cost | 39 | 42 | 47 | 43 | |||||||||||
Expected return on plan assets | (62 | ) | (57 | ) | (150 | ) | (125 | ) | |||||||
Amortization of: | |||||||||||||||
Prior service cost | 2 | 2 | — | — | |||||||||||
Actuarial loss | 22 | 20 | 39 | 35 | |||||||||||
Net periodic defined benefit costs (credits) before settlements and special termination benefits | 17 | 24 | (43 | ) | (28 | ) | |||||||||
Special termination benefits (a) | — | 2 | — | — | |||||||||||
Net periodic defined benefit costs (credits) | $ | 17 | $ | 26 | $ | (43 | ) | $ | (28 | ) |
(a) | Enhanced pension benefits offered to certain PPL Electric bargaining unit employees under a one-time voluntary retirement window offered as part of the new five year IBEW contract ratified in March 2017. |
Pension Benefits | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
LKE | |||||||
Service cost | $ | 7 | $ | 7 | |||
Interest cost | 16 | 16 | |||||
Expected return on plan assets | (26 | ) | (22 | ) | |||
Amortization of: | |||||||
Prior service cost | 2 | 2 | |||||
Actuarial loss (a) | 10 | 11 | |||||
Net periodic defined benefit costs | $ | 9 | $ | 14 |
(a) | As a result of treatment approved by the KPSC, the difference between actuarial loss calculated in accordance with LKE's accounting policy and actuarial loss calculated using a 15-year amortization period was $4 million and $5 million for the three months ended March 31, 2018 and 2017. This difference is recorded as a regulatory asset. |
Pension Benefits | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
LG&E | |||||||
Interest cost | $ | 3 | $ | 3 | |||
Expected return on plan assets | (5 | ) | (5 | ) | |||
Amortization of: | |||||||
Prior service cost | 1 | 1 | |||||
Actuarial loss (a) | 2 | 3 | |||||
Net periodic defined benefit costs | $ | 1 | $ | 2 |
(a) | As a result of treatment approved by the KPSC, the difference between actuarial loss calculated in accordance with LG&E's accounting policy and actuarial loss calculated using a 15-year amortization period was $1 million for the three months ended March 31, 2018 and 2017. This difference is recorded as a regulatory asset. |
Other Postretirement Benefits | |||||||
Three Months | |||||||
2018 | 2017 | ||||||
PPL | |||||||
Service cost | $ | 1 | $ | 2 | |||
Interest cost | 3 | 6 | |||||
Expected return on plan assets | (4 | ) | (6 | ) | |||
Amortization of prior service cost | (1 | ) | — | ||||
Net periodic defined benefit costs (credits) | $ | (1 | ) | $ | 2 | ||
LKE | |||||||
Service cost | $ | 1 | $ | 1 | |||
Interest cost | 2 | 2 | |||||
Expected return on plan assets | (2 | ) | (1 | ) | |||
Net periodic defined benefit costs | $ | 1 | $ | 2 |
Three Months | |||||||
2018 | 2017 | ||||||
PPL Electric | $ | 4 | $ | 8 | |||
LG&E | 2 | 3 | |||||
KU | 1 | 4 |
Exposure at March 31, 2018 | Expiration Date | |||||
PPL | ||||||
Indemnifications related to the WPD Midlands acquisition | (a) | |||||
WPD indemnifications for entities in liquidation and sales of assets | $ | 11 | (b) | 2020 | ||
WPD guarantee of pension and other obligations of unconsolidated entities | 99 | (c) | ||||
PPL Electric | ||||||
Guarantee of inventory value | 17 | (d) | 2020 | |||
LKE | ||||||
Indemnification of lease termination and other divestitures | 201 | (e) | 2021 | |||
LG&E and KU | ||||||
LG&E and KU guarantee of shortfall related to OVEC | (f) |
(a) | Indemnifications related to certain liabilities, including a specific unresolved tax issue and those relating to properties and assets owned by the seller that were transferred to WPD Midlands in connection with the acquisition. A cross indemnity has been received from the seller on the tax issue. The maximum exposure and expiration of these indemnifications cannot be estimated because the maximum potential liability is not capped and the expiration date is not specified in the transaction documents. |
(b) | Indemnification to the liquidators and certain others for existing liabilities or expenses or liabilities arising during the liquidation process. The indemnifications are limited to distributions made from the subsidiary to its parent either prior or subsequent to liquidation or are not explicitly stated in the agreements. The indemnifications generally expire two to seven years subsequent to the date of dissolution of the entities. The exposure noted only includes those cases where the agreements provide for specific limits. |
(c) | Relates to certain obligations of discontinued or modified electric associations that were guaranteed at the time of privatization by the participating members. Costs are allocated to the members and can be reallocated if an existing member becomes insolvent. At March 31, 2018, WPD has recorded an estimated discounted liability for which the expected payment/performance is probable. Neither the expiration date nor the maximum amount of potential payments for certain obligations is explicitly stated in the related agreements, and as a result, the exposure has been estimated. |
(d) | A third party logistics firm provides inventory procurement and fulfillment services. The logistics firm has title to the inventory, however, upon termination of the contracts, PPL Electric has guaranteed to purchase any remaining inventory that has not been used or sold. |
(e) | LKE provides certain indemnifications covering the due and punctual payment, performance and discharge by each party of its respective obligations. The most comprehensive of these guarantees is the LKE guarantee covering operational, regulatory and environmental commitments and indemnifications made by WKE under a 2009 Transaction Termination Agreement. This guarantee has a term of 12 years ending July 2021, and a maximum exposure of $200 million, exclusive of certain items such as government fines and penalties that may exceed the maximum. Additionally, LKE has indemnified various third parties related to historical obligations for other divested subsidiaries and affiliates. The indemnifications vary by entity and the maximum exposures range from being capped at the sale price to no specified maximum. LKE could be required to perform on these indemnifications in the event of covered losses or liabilities being claimed by an indemnified party. LKE cannot predict the ultimate outcomes of the various indemnification scenarios, but does not expect such outcomes to result in significant losses. |
(f) | Pursuant to the OVEC power purchase contract, LG&E and KU are obligated to pay for their share of OVEC's excess debt service, post-retirement and decommissioning costs, as well as any shortfall from amounts included within a demand charge designed and expected to cover these costs over the term of the contract. LKE's proportionate share of OVEC's outstanding debt was $117 million at March 31, 2018, consisting of LG&E's share of $81 million and KU's share of $36 million. The maximum exposure and the expiration date of these potential obligations are not presently determinable. See "Energy Purchase Commitments" in Note 13 in PPL's, LKE's, LG&E's and KU's 2017 Form 10-K for additional information on the OVEC power purchase contract. In connection with recent credit market related developments at OVEC or certain of its sponsors, such parties, including LG&E and KU, are analyzing certain potential additional credit support actions to preserve OVEC's access to credit markets or mitigate risks or adverse impacts relating thereto, including increased interest costs. The ultimate outcome of these matters, including any potential impact on LG&E's and KU's obligations relating to OVEC debt under the power purchase contract cannot be predicted. |
Three Months | |||||||
2018 | 2017 | ||||||
PPL Electric from PPL Services | $ | 16 | $ | 51 | |||
LKE from PPL Services | 7 | 6 | |||||
PPL Electric from PPL EU Services | 35 | 18 | |||||
LG&E from LKS | 38 | 44 | |||||
KU from LKS | 42 | 44 |
PPL | |||||||
2018 | 2017 | ||||||
Other Income | |||||||
Defined benefit plans - non-service credits (Note 9) | $ | 68 | $ | 38 | |||
AFUDC - equity component | 5 | 2 | |||||
Miscellaneous | 1 | 9 | |||||
Total Other Income | 74 | 49 | |||||
Other Expense | |||||||
Economic foreign currency exchange contracts (Note 14) | 112 | 43 | |||||
Charitable contributions | 4 | 4 | |||||
Miscellaneous | 1 | 11 | |||||
Total Other Expense | 117 | 58 | |||||
Other Income (Expense) - net | $ | (43 | ) | $ | (9 | ) |
PPL Electric | |||||||
2018 | 2017 | ||||||
Other Income | |||||||
AFUDC - equity component | $ | 5 | $ | 2 | |||
Defined benefit plans - non-service credits (Note 9) | 2 | — | |||||
Total Other Income | 7 | 2 | |||||
Other Expense | |||||||
Charitable contributions | 1 | 1 | |||||
Defined benefit plans - non-service costs (Note 9) | — | 1 | |||||
Total Other Expense | 1 | 2 | |||||
Other Income (Expense) - net | $ | 6 | $ | — |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
PPL | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 629 | $ | 629 | $ | — | $ | — | $ | 485 | $ | 485 | $ | — | $ | — | |||||||||||||||
Restricted cash and cash equivalents (a) | 24 | 24 | — | — | 26 | 26 | — | — | |||||||||||||||||||||||
Price risk management assets (b): | |||||||||||||||||||||||||||||||
Foreign currency contracts | 97 | — | 97 | — | 163 | — | 163 | — | |||||||||||||||||||||||
Cross-currency swaps | 79 | — | 79 | — | 101 | — | 101 | — | |||||||||||||||||||||||
Total price risk management assets | 176 | — | 176 | — | 264 | — | 264 | — | |||||||||||||||||||||||
Total assets | $ | 829 | $ | 653 | $ | 176 | $ | — | $ | 775 | $ | 511 | $ | 264 | $ | — | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Price risk management liabilities (b): | |||||||||||||||||||||||||||||||
Interest rate swaps | $ | 22 | $ | — | $ | 22 | $ | — | $ | 26 | $ | — | $ | 26 | $ | — | |||||||||||||||
Foreign currency contracts | 167 | — | 167 | — | 148 | — | 148 | — | |||||||||||||||||||||||
Total price risk management liabilities | $ | 189 | $ | — | $ | 189 | $ | — | $ | 174 | $ | — | $ | 174 | $ | — | |||||||||||||||
PPL Electric | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 20 | $ | 20 | $ | — | $ | — | $ | 49 | $ | 49 | $ | — | $ | — | |||||||||||||||
Restricted cash and cash equivalents (a) | 2 | 2 | — | — | 2 | 2 | — | — | |||||||||||||||||||||||
Total assets | $ | 22 | $ | 22 | $ | — | $ | — | $ | 51 | $ | 51 | $ | — | $ | — | |||||||||||||||
LKE | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 27 | $ | 27 | $ | — | $ | — | $ | 30 | $ | 30 | $ | — | $ | — | |||||||||||||||
Total assets | $ | 27 | $ | 27 | $ | — | $ | — | $ | 30 | $ | 30 | $ | — | $ | — | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Price risk management liabilities: | |||||||||||||||||||||||||||||||
Interest rate swaps | $ | 22 | $ | — | $ | 22 | $ | — | $ | 26 | $ | — | $ | 26 | $ | — | |||||||||||||||
Total price risk management liabilities | $ | 22 | $ | — | $ | 22 | $ | — | $ | 26 | $ | — | $ | 26 | $ | — | |||||||||||||||
LG&E | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 14 | $ | 14 | $ | — | $ | — | $ | 15 | $ | 15 | $ | — | $ | — | |||||||||||||||
Total assets | $ | 14 | $ | 14 | $ | — | $ | — | $ | 15 | $ | 15 | $ | — | $ | — | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Price risk management liabilities: | |||||||||||||||||||||||||||||||
Interest rate swaps | $ | 22 | $ | — | $ | 22 | $ | — | $ | 26 | $ | — | $ | 26 | $ | — | |||||||||||||||
Total price risk management liabilities | $ | 22 | $ | — | $ | 22 | $ | — | $ | 26 | $ | — | $ | 26 | $ | — | |||||||||||||||
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
KU | |||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 11 | $ | 11 | $ | — | $ | — | $ | 15 | $ | 15 | $ | — | $ | — | |||||||||||||||
Total assets | $ | 11 | $ | 11 | $ | — | $ | — | $ | 15 | $ | 15 | $ | — | $ | — |
(a) | Current portion is included in "Other current assets" and long-term portion is included in "Other noncurrent assets" on the Balance Sheets. |
(b) | Current portion is included in "Price risk management assets" and "Other current liabilities" and noncurrent portion is included in "Price risk management assets" and "Other deferred credits and noncurrent liabilities" on the Balance Sheets. |
March 31, 2018 | December 31, 2017 | ||||||||||||||
Carrying Amount (a) | Fair Value | Carrying Amount (a) | Fair Value | ||||||||||||
PPL | $ | 20,464 | $ | 23,577 | $ | 20,195 | $ | 23,783 | |||||||
PPL Electric | 3,298 | 3,632 | 3,298 | 3,769 | |||||||||||
LKE | 5,259 | 5,654 | 5,159 | 5,670 | |||||||||||
LG&E | 1,808 | 1,925 | 1,709 | 1,865 | |||||||||||
KU | 2,329 | 2,546 | 2,328 | 2,605 |
(a) | Amounts are net of debt issuance costs. |
• | PPL and its subsidiaries are exposed to interest rate risk associated with forecasted fixed-rate and existing floating-rate debt issuances. PPL and WPD hold over-the-counter cross currency swaps to limit exposure to market fluctuations on interest and principal payments from changes in foreign currency exchange rates and interest rates. PPL, LKE and LG&E utilize over-the-counter interest rate swaps to limit exposure to market fluctuations on floating-rate debt. PPL, LKE, LG&E and KU utilize forward starting interest rate swaps to hedge changes in benchmark interest rates, when appropriate, in connection with future debt issuances. |
• | PPL and its subsidiaries are exposed to interest rate risk associated with debt securities and derivatives held by defined benefit plans. This risk is significantly mitigated to the extent that the plans are sponsored at, or sponsored on behalf of, the regulated domestic utilities and for certain plans at WPD due to the recovery methods in place. |
• | PPL is exposed to foreign currency exchange risk primarily associated with its investments in and earnings of U.K. affiliates. |
• | PPL Electric is required to purchase electricity to fulfill its obligation as a PLR. Potential commodity price risk is mitigated through its PUC-approved cost recovery mechanism and full-requirement supply agreements to serve its PLR customers which transfer the risk to energy suppliers. |
• | LG&E's and KU's rates include certain mechanisms for fuel, fuel-related expenses and energy purchases. In addition, LG&E's rates include a mechanism for natural gas supply expenses. These mechanisms generally provide for timely recovery of market price fluctuations associated with these expenses. |
• | WPD is exposed to volumetric risk which is significantly mitigated as a result of the method of regulation in the U.K. Under the RIIO-ED1 price control regulations, recovery of such exposure occurs on a two year lag. See Note 1 in PPL's 2017 Form 10-K for additional information on revenue recognition under RIIO-ED1. |
• | PPL Electric, LG&E and KU are exposed to volumetric risk on retail sales, mainly due to weather and other economic conditions for which there is limited mitigation between rate cases. |
• | PPL and its subsidiaries are exposed to equity securities price risk associated with the fair value of the defined benefit plans' assets. This risk is significantly mitigated at the regulated domestic utilities and for certain plans at WPD due to the recovery methods in place. |
• | PPL is exposed to equity securities price risk from future stock sales and/or purchases. |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives designated as hedging instruments | Derivatives not designated as hedging instruments | ||||||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||||||||
Price Risk Management | |||||||||||||||||||||||||||||||
Assets/Liabilities (a): | |||||||||||||||||||||||||||||||
Interest rate swaps (b) | $ | — | $ | — | $ | — | $ | 4 | $ | — | $ | — | $ | — | $ | 4 | |||||||||||||||
Cross-currency swaps (b) | 4 | — | — | — | 4 | — | — | — | |||||||||||||||||||||||
Foreign currency contracts | 1 | 2 | 51 | 75 | — | — | 45 | 67 | |||||||||||||||||||||||
Total current | 5 | 2 | 51 | 79 | 4 | — | 45 | 71 | |||||||||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||||||||
Price Risk Management | |||||||||||||||||||||||||||||||
Assets/Liabilities (a): | |||||||||||||||||||||||||||||||
Interest rate swaps (b) | — | — | — | 18 | — | — | — | 22 | |||||||||||||||||||||||
Cross-currency swaps (b) | 75 | — | — | — | 97 | — | — | — | |||||||||||||||||||||||
Foreign currency contracts | — | — | 45 | 90 | — | — | 118 | 81 | |||||||||||||||||||||||
Total noncurrent | 75 | — | 45 | 108 | 97 | — | 118 | 103 | |||||||||||||||||||||||
Total derivatives | $ | 80 | $ | 2 | $ | 96 | $ | 187 | $ | 101 | $ | — | $ | 163 | $ | 174 |
(a) | Current portion is included in "Price risk management assets" and "Other current liabilities" and noncurrent portion is included in "Price risk management assets" and "Other deferred credits and noncurrent liabilities" on the Balance Sheets. |
(b) | Excludes accrued interest, if applicable. |
Three Months | ||||||||||||||
Derivative Relationships | Derivative Gain (Loss) Recognized in OCI (Effective Portion) | Location of Gain (Loss) Recognized in Income on Derivative | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ||||||||||
Three Months | ||||||||||||||
Cash Flow Hedges: | ||||||||||||||
Interest rate swaps | $ | — | Interest expense | $ | (2 | ) | $ | — | ||||||
Cross-currency swaps | (24 | ) | Other income (expense) - net | (12 | ) | — | ||||||||
Total | $ | (24 | ) | $ | (14 | ) | $ | — | ||||||
Net Investment Hedges: | ||||||||||||||
Foreign currency contracts | $ | (1 | ) |
Derivatives Not Designated as | Location of Gain (Loss) Recognized in | |||||
Hedging Instruments | Income on Derivative | Three Months | ||||
Foreign currency contracts | Other income (expense) - net | $ | (112 | ) | ||
Interest rate swaps | Interest expense | (1 | ) | |||
Total | $ | (113 | ) | |||
Derivatives Not Designated as | Location of Gain (Loss) Recognized as | |||||
Hedging Instruments | Regulatory Liabilities/Assets | Three Months | ||||
Interest rate swaps | Regulatory assets - noncurrent | $ | 4 |
Three Months | ||||||||||||||
Derivative Relationships | Derivative Gain (Loss) Recognized in OCI (Effective Portion) | Location of Gain (Loss) Recognized in Income on Derivative | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ||||||||||
Three Months | ||||||||||||||
Cash Flow Hedges: | ||||||||||||||
Interest rate swaps | $ | — | Interest expense | $ | (2 | ) | $ | (1 | ) | |||||
Cross-currency swaps | (8 | ) | Interest expense | 1 | — | |||||||||
Other income (expense) - net | 3 | — | ||||||||||||
Total | $ | (8 | ) | $ | 2 | $ | (1 | ) | ||||||
Net Investment Hedges: | ||||||||||||||
Foreign currency contracts | $ | — |
Derivatives Not Designated as | Location of Gain (Loss) Recognized in | |||||
Hedging Instruments | Income on Derivative | Three Months | ||||
Foreign currency contracts | Other income (expense) - net | $ | (43 | ) | ||
Interest rate swaps | Interest expense | (2 | ) | |||
Total | $ | (45 | ) | |||
Derivatives Not Designated as | Location of Gain (Loss) Recognized as | |||||
Hedging Instruments | Regulatory Liabilities/Assets | Three Months | ||||
Interest rate swaps | Regulatory assets - noncurrent | $ | 2 |
March 31, 2018 | December 31, 2017 | ||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||
Current: | |||||||||||||||
Price Risk Management | |||||||||||||||
Assets/Liabilities: | |||||||||||||||
Interest rate swaps | $ | — | $ | 4 | $ | — | $ | 4 | |||||||
Total current | — | 4 | — | 4 | |||||||||||
Noncurrent: | |||||||||||||||
Price Risk Management | |||||||||||||||
Assets/Liabilities: | |||||||||||||||
Interest rate swaps | — | 18 | — | 22 | |||||||||||
Total noncurrent | — | 18 | — | 22 | |||||||||||
Total derivatives | $ | — | $ | 22 | $ | — | $ | 26 |
Location of Gain (Loss) Recognized in | ||||||
Derivative Instruments | Income on Derivatives | Three Months | ||||
Interest rate swaps | Interest expense | $ | (1 | ) | ||
Location of Gain (Loss) Recognized in | ||||||
Derivative Instruments | Regulatory Assets | Three Months | ||||
Interest rate swaps | Regulatory assets - noncurrent | $ | 4 |
Location of Gain (Loss) Recognized in | ||||||
Derivative Instruments | Income on Derivatives | Three Months | ||||
Interest rate swaps | Interest expense | $ | (2 | ) | ||
Location of Gain (Loss) Recognized in | ||||||
Derivative Instruments | Regulatory Assets | Three Months | ||||
Interest rate swaps | Regulatory assets - noncurrent | $ | 2 |
Assets | Liabilities | ||||||||||||||||||||||||||||||
Eligible for Offset | Eligible for Offset | ||||||||||||||||||||||||||||||
Gross | Derivative Instruments | Cash Collateral Received | Net | Gross | Derivative Instruments | Cash Collateral Pledged | Net | ||||||||||||||||||||||||
March 31, 2018 | |||||||||||||||||||||||||||||||
Treasury Derivatives | |||||||||||||||||||||||||||||||
PPL | $ | 176 | $ | 78 | $ | 16 | $ | 82 | $ | 189 | $ | 78 | $ | 5 | $ | 106 | |||||||||||||||
LKE | — | — | — | — | 22 | — | — | 22 | |||||||||||||||||||||||
LG&E | — | — | — | — | 22 | — | — | 22 |
December 31, 2017 | |||||||||||||||||||||||||||||||
Treasury Derivatives | |||||||||||||||||||||||||||||||
PPL | $ | 264 | $ | 107 | $ | 20 | $ | 137 | $ | 174 | $ | 107 | $ | — | $ | 67 | |||||||||||||||
LKE | — | — | — | — | 26 | — | — | 26 | |||||||||||||||||||||||
LG&E | — | — | — | — | 26 | — | — | 26 |
PPL | LKE | LG&E | |||||||||
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features | $ | 101 | $ | 8 | $ | 8 | |||||
Aggregate fair value of collateral posted on these derivative instruments | 10 | — | — | ||||||||
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade (a) | 91 | 8 | 8 |
(a) | Includes the effect of net receivables and payables already recorded on the Balance Sheet. |
PPL | LKE | LG&E | KU | ||||||||||||
Balance at December 31, 2017 | $ | 397 | $ | 356 | $ | 121 | $ | 235 | |||||||
Accretion | 3 | 3 | — | 3 | |||||||||||
Effect of foreign exchange rates | 1 | — | — | — | |||||||||||
Changes in estimated timing or cost (a) | (10 | ) | (10 | ) | (5 | ) | (5 | ) | |||||||
Obligations settled | (9 | ) | (9 | ) | (5 | ) | (4 | ) | |||||||
Balance at March 31, 2018 | $ | 382 | $ | 340 | $ | 111 | $ | 229 |
(a) | LG&E and KU recorded decreases to the existing AROs during the three months ended March 31, 2018 primarily related to the closure of CCR impoundments and associated groundwater monitoring. These revisions are the result of changes in closure plans related to expected costs and timing of closures. Further changes to AROs, capital plans or operating costs may be required as estimates of future cash flows are refined based on closure developments and regulatory or legal proceedings. |
Foreign currency translation adjustments | Unrealized gains (losses) on qualifying derivatives | Defined benefit plans | |||||||||||||||||||||
Equity investees' AOCI | Prior service costs | Actuarial gain (loss) | Total | ||||||||||||||||||||
PPL | |||||||||||||||||||||||
December 31, 2017 | $ | (1,089 | ) | $ | (13 | ) | $ | — | $ | (7 | ) | $ | (2,313 | ) | $ | (3,422 | ) | ||||||
Amounts arising during the period | 116 | (20 | ) | — | — | (1 | ) | 95 | |||||||||||||||
Reclassifications from AOCI | — | 12 | — | — | 36 | 48 | |||||||||||||||||
Net OCI during the period | 116 | (8 | ) | — | — | 35 | 143 | ||||||||||||||||
March 31, 2018 | $ | (973 | ) | $ | (21 | ) | $ | — | $ | (7 | ) | $ | (2,278 | ) | $ | (3,279 | ) | ||||||
December 31, 2016 | $ | (1,627 | ) | $ | (7 | ) | $ | (1 | ) | $ | (8 | ) | $ | (2,135 | ) | $ | (3,778 | ) | |||||
Amounts arising during the period | (24 | ) | (6 | ) | — | — | — | (30 | ) | ||||||||||||||
Reclassifications from AOCI | — | (1 | ) | — | — | 32 | 31 | ||||||||||||||||
Net OCI during the period | (24 | ) | (7 | ) | — | — | 32 | 1 | |||||||||||||||
March 31, 2017 | $ | (1,651 | ) | $ | (14 | ) | $ | (1 | ) | $ | (8 | ) | $ | (2,103 | ) | $ | (3,777 | ) |
Three Months | Affected Line Item on the | |||||||||
Details about AOCI | 2018 | 2017 | Statements of Income | |||||||
Qualifying derivatives | ||||||||||
Interest rate swaps | $ | (2 | ) | $ | (3 | ) | Interest Expense | |||
Cross-currency swaps | (12 | ) | 3 | Other Income (Expense) - net | ||||||
— | 1 | Interest Expense | ||||||||
Total Pre-tax | (14 | ) | 1 | |||||||
Income Taxes | 2 | — | ||||||||
Total After-tax | (12 | ) | 1 | |||||||
Defined benefit plans | ||||||||||
Net actuarial loss | (45 | ) | (41 | ) | ||||||
Total Pre-tax | (45 | ) | (41 | ) | ||||||
Income Taxes | 9 | 9 | ||||||||
Total After-tax | (36 | ) | (32 | ) | ||||||
Total reclassifications during the period | $ | (48 | ) | $ | (31 | ) |
• | "Overview" provides a description of each Registrant's business strategy and a discussion of important financial and operational developments. |
• | "Results of Operations" for all Registrants includes a "Statement of Income Analysis" which discusses significant changes in principal line items on the Statements of Income, comparing the three months ended March 31, 2018 with the same period in 2017. For PPL, "Results of Operations" also includes "Segment Earnings" and "Adjusted Gross Margins" which provide a detailed analysis of earnings by reportable segment. These discussions include non-GAAP financial measures, including "Earnings from Ongoing Operations" and "Adjusted Gross Margins" and provide explanations of the non-GAAP financial measures and a reconciliation of the non-GAAP financial measures to the most comparable GAAP measure. The "2018 Outlook" discussion identifies key factors expected to impact 2018 earnings. For PPL Electric, LKE, LG&E and KU, a summary of earnings and adjusted gross margins is also provided. |
• | "Financial Condition - Liquidity and Capital Resources" provides an analysis of the Registrants' liquidity positions and credit profiles. This section also includes a discussion of rating agency actions. |
• | "Financial Condition - Risk Management" provides an explanation of the Registrants' risk management programs relating to market and credit risk. |
PPL Corporation* | |||||||||||||||||
PPL Capital Funding ● Provides financing for the operations of PPL and certain subsidiaries | |||||||||||||||||
PPL Global ● Engages in the regulated distribution of electricity in the U.K. | LKE* | PPL Electric* ● Engages in the regulated transmission and distribution of electricity in Pennsylvania | |||||||||||||||
LG&E* ● Engages in the regulated generation, transmission, distribution and sale of electricity and regulated distribution and sale of natural gas in Kentucky | KU* ● Engages in the regulated generation, transmission, distribution and sale of electricity, primarily in Kentucky | ||||||||||||||||
U.K. Regulated Segment | Kentucky Regulated Segment | Pennsylvania Regulated Segment |
• | whether to implement an MPR as currently defined; |
• | whether to implement an MPR with an extension for WPD rail electrification; and |
• | whether to implement an MPR with a significant extension of scope to include financial parameters. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating Revenues | $ | 2,126 | $ | 1,951 | $ | 175 | |||||
Operating Expenses | |||||||||||
Operation | |||||||||||
Fuel | 214 | 191 | 23 | ||||||||
Energy purchases | 241 | 215 | 26 | ||||||||
Other operation and maintenance | 468 | 470 | (2 | ) | |||||||
Depreciation | 269 | 242 | 27 | ||||||||
Taxes, other than income | 83 | 75 | 8 | ||||||||
Total Operating Expenses | 1,275 | 1,193 | 82 | ||||||||
Other Income (Expense) - net | (43 | ) | (9 | ) | (34 | ) | |||||
Interest Expense | 239 | 217 | 22 | ||||||||
Income Taxes | 117 | 129 | (12 | ) | |||||||
Net Income | $ | 452 | $ | 403 | $ | 49 |
Three Months | |||
Domestic: | |||
PPL Electric Distribution volume | $ | 20 | |
PPL Electric PLR Revenue (a) | 17 | ||
PPL Electric Transmission Formula Rate | 28 | ||
LKE Volumes | 67 | ||
LKE Base rates | 30 | ||
LKE TCJA (b) | (34 | ) | |
Total Domestic | 128 | ||
U.K.: | |||
Price | (10 | ) | |
Volume | (8 | ) | |
Foreign currency exchange rates | 58 | ||
Other | 7 | ||
Total U.K. | 47 | ||
Total | $ | 175 |
(a) | The increase was primarily due to higher energy volumes at PPL Electric. |
(b) | Represents estimated income tax savings owed to customers related to the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. A regulatory liability was recorded for this amount. See Note 7 for additional information. |
Three Months | |||
Domestic: | |||
PPL Electric Act 129 | $ | (3 | ) |
PPL Electric payroll-related costs | (13 | ) | |
PPL Electric vegetation management | (5 | ) | |
Other | (2 | ) | |
U.K.: | |||
Foreign currency exchange rates | 11 | ||
Third-party engineering | 5 | ||
Other | 5 | ||
Total | $ | (2 | ) |
Three Months | |||
Pennsylvania gross receipts tax | $ | 3 | |
Foreign currency exchange rates | 3 | ||
Other | 2 | ||
Total | $ | 8 |
Three Months | |||
Long-term debt interest expense | $ | 12 | |
Foreign currency exchange rates | 9 | ||
Other | 1 | ||
Total | $ | 22 |
Three Months | |||
Change in pre-tax income | $ | 8 | |
Reduction in U.S. federal income tax rate | (32 | ) | |
U.S. income tax on foreign earnings - net of foreign tax credit (a) | 10 | ||
Depreciation and other items not normalized (b) | (9 | ) | |
Stock-based compensation | 4 | ||
Other | 7 | ||
Total | $ | (12 | ) |
(a) | The increase is primarily due to the tax benefit of accelerated pension contributions made in the first quarter of 2017. |
(b) | The decrease is primarily due to the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018, on the flow-through of tax benefits associated with the regulatory treatment of taxes on plant related activity. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
U.K. Regulated | $ | 197 | $ | 286 | $ | (89 | ) | ||||
Kentucky Regulated | 133 | 95 | 38 | ||||||||
Pennsylvania Regulated | 148 | 79 | 69 | ||||||||
Corporate and Other (a) | (26 | ) | (57 | ) | 31 | ||||||
Net Income | $ | 452 | $ | 403 | $ | 49 |
(a) | Primarily represents financing and certain other costs incurred at the corporate level that have not been allocated or assigned to the segments, which are presented to reconcile segment information to PPL's consolidated results. The change in 2018 compared with 2017 is primarily due to the utilization of an estimated tax rate, which required tax benefits realized in the first quarter of 2017 to be recognized over the annual period. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
U.K. Regulated | $ | 262 | $ | 307 | $ | (45 | ) | ||||
Kentucky Regulated | 133 | 96 | 37 | ||||||||
Pennsylvania Regulated | 148 | 79 | 69 | ||||||||
Corporate and Other | (26 | ) | (57 | ) | 31 | ||||||
Earnings from Ongoing Operations | $ | 517 | $ | 425 | $ | 92 |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating revenues | $ | 615 | $ | 568 | $ | 47 | |||||
Other operation and maintenance | 132 | 107 | 25 | ||||||||
Depreciation | 62 | 55 | 7 | ||||||||
Taxes, other than income | 34 | 31 | 3 | ||||||||
Total operating expenses | 228 | 193 | 35 | ||||||||
Other Income (Expense) - net | (47 | ) | — | (47 | ) | ||||||
Interest Expense | 107 | 94 | 13 | ||||||||
Income Taxes | 36 | (5 | ) | 41 | |||||||
Net Income | 197 | 286 | (89 | ) | |||||||
Less: Special Items | (65 | ) | (21 | ) | (44 | ) | |||||
Earnings from Ongoing Operations | $ | 262 | $ | 307 | $ | (45 | ) |
Income Statement Line Item | Three Months | ||||||||
2018 | 2017 | ||||||||
Foreign currency economic hedges, net of tax of $17, $12 (a) | Other Income (Expense) - net | $ | (65 | ) | $ | (21 | ) | ||
Total Special Items | $ | (65 | ) | $ | (21 | ) |
(a) | Represents unrealized gains (losses) on contracts that economically hedge anticipated GBP-denominated earnings. |
Three Months | |||
U.K. | |||
U.K. Adjusted Gross Margins | $ | (17 | ) |
Other operation and maintenance | (5 | ) | |
Depreciation | — | ||
Other Income (Expense) - net | 15 | ||
Interest expense | (4 | ) | |
Other | (1 | ) | |
Income taxes | (5 | ) | |
U.S. | |||
Income taxes | (43 | ) | |
Foreign currency exchange, after-tax | 15 | ||
Earnings from Ongoing Operations | (45 | ) | |
Special items, after-tax | (44 | ) | |
Net Income | $ | (89 | ) |
• | See "Adjusted Gross Margins - Changes in Adjusted Gross Margins" for an explanation of U.K. Adjusted Gross Margins. |
• | Higher other income (expense) - net primarily due to $15 million from higher pension income due to an increase in expected returns on higher asset balances. |
• | Higher income taxes primarily due to an increase of $9 million related to accelerated tax deductions in the first quarter of 2017. |
• | Higher income taxes primarily due to a $35 million tax benefit on accelerated pension contributions in the first quarter of 2017 and a $7 million increase from a reduction in tax benefits on interest deductibility due to the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating revenues | $ | 872 | $ | 809 | $ | 63 | |||||
Fuel | 214 | 191 | 23 | ||||||||
Energy purchases | 80 | 69 | 11 | ||||||||
Other operation and maintenance | 205 | 205 | — | ||||||||
Depreciation | 117 | 105 | 12 | ||||||||
Taxes, other than income | 17 | 16 | 1 | ||||||||
Total operating expenses | 633 | 586 | 47 | ||||||||
Other Income (Expense) - net | (3 | ) | (4 | ) | 1 | ||||||
Interest Expense | 67 | 65 | 2 | ||||||||
Income Taxes | 36 | 59 | (23 | ) | |||||||
Net Income | 133 | 95 | 38 | ||||||||
Less: Special Items | — | (1 | ) | 1 | |||||||
Earnings from Ongoing Operations | $ | 133 | $ | 96 | $ | 37 |
Income Statement Line Item | Three Months | ||||||||
2018 | 2017 | ||||||||
Adjustment to investment, net of tax of $0, $0 (a) | Other Income (Expense) - net | $ | — | $ | (1 | ) | |||
Total Special Items | $ | — | $ | (1 | ) |
(a) | KU recorded a write-off of an equity method investment. |
Three Months | |||
Kentucky Adjusted Gross Margins | $ | 28 | |
Other operation and maintenance | (1 | ) | |
Depreciation | (11 | ) | |
Interest Expense | (2 | ) | |
Income Taxes | 23 | ||
Earnings from Ongoing Operations | 37 | ||
Special items, after-tax | 1 | ||
Net Income | $ | 38 |
• | See "Adjusted Gross Margins - Changes in Adjusted Gross Margins" for an explanation of Kentucky Adjusted Gross Margins. |
• | Higher depreciation expense primarily due to higher depreciation rates effective July 1, 2017, and additions to PP&E, net of retirements. |
• | Lower income taxes primarily due to the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating revenues | $ | 639 | $ | 573 | $ | 66 | |||||
Energy purchases | 161 | 146 | 15 | ||||||||
Other operation and maintenance | 133 | 163 | (30 | ) | |||||||
Depreciation | 85 | 75 | 10 | ||||||||
Taxes, other than income | 32 | 29 | 3 | ||||||||
Total operating expenses | 411 | 413 | (2 | ) | |||||||
Other Income (Expense) - net | 6 | — | 6 | ||||||||
Interest Expense | 37 | 33 | 4 | ||||||||
Income Taxes | 49 | 48 | 1 | ||||||||
Net Income | 148 | 79 | 69 | ||||||||
Less: Special Items (a) | — | — | — | ||||||||
Earnings from Ongoing Operations | $ | 148 | $ | 79 | $ | 69 |
(a) | There are no items that management considers special for the periods presented. |
Three Months | |||
Pennsylvania Adjusted Gross Margins | $ | 48 | |
Other operation and maintenance | 27 | ||
Depreciation | (6 | ) | |
Taxes, other than income | (1 | ) | |
Other Income (Expense) - net | 6 | ||
Interest Expense | (4 | ) | |
Income Taxes | (1 | ) | |
Net Income | $ | 69 |
• | See "Adjusted Gross Margins - Changes in Adjusted Gross Margins" for an explanation of Pennsylvania Adjusted Gross Margins. |
• | Lower other operation and maintenance expense primarily due to $16 million of lower corporate service costs allocated to PPL Electric and $13 million of lower payroll related expenses. |
• | Income taxes are relatively flat due to an increase in pre-tax income resulting in $29 million of additional tax, partially offset by the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018, of $25 million. |
2018 Three Months | |||||||||||||||||||
U.K. Regulated | KY Regulated | PA Regulated | Corporate and Other | Total | |||||||||||||||
Net Income | $ | 197 | $ | 133 | $ | 148 | $ | (26 | ) | $ | 452 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges, net of tax of $17 | (65 | ) | — | — | — | (65 | ) | ||||||||||||
Total Special Items | (65 | ) | — | — | — | (65 | ) | ||||||||||||
Earnings from Ongoing Operations | $ | 262 | $ | 133 | $ | 148 | $ | (26 | ) | $ | 517 | ||||||||
2017 Three Months | |||||||||||||||||||
U.K. Regulated | KY Regulated | PA Regulated | Corporate and Other | Total | |||||||||||||||
Net Income | $ | 286 | $ | 95 | $ | 79 | $ | (57 | ) | $ | 403 | ||||||||
Less: Special Items (expense) benefit: | |||||||||||||||||||
Foreign currency economic hedges, net of tax of $12 | (21 | ) | — | — | — | (21 | ) | ||||||||||||
Adjustment to investment, net of tax of $0 | — | (1 | ) | — | — | (1 | ) | ||||||||||||
Total Special Items | (21 | ) | (1 | ) | — | — | (22 | ) | |||||||||||
Earnings from Ongoing Operations | $ | 307 | $ | 96 | $ | 79 | $ | (57 | ) | $ | 425 |
• | "U.K. Adjusted Gross Margins" is a single financial performance measure of the electricity distribution operations of the U.K. Regulated segment. In calculating this measure, direct costs such as connection charges from National Grid, which owns and manages the electricity transmission network in England and Wales, and Ofgem license fees (recorded in "Other operation and maintenance" on the Statements of Income) are deducted from operating revenues, as they are costs passed through to customers. As a result, this measure represents the net revenues from the delivery of electricity across WPD's distribution network in the U.K. and directly related activities. |
• | "Kentucky Adjusted Gross Margins" is a single financial performance measure of the electricity generation, transmission and distribution operations of the Kentucky Regulated segment, LKE, LG&E and KU, as well as the Kentucky Regulated segment's, LKE's and LG&E's distribution and sale of natural gas. In calculating this measure, fuel, energy purchases and certain variable costs of production (recorded in "Other operation and maintenance" on the Statements of Income) are deducted from operating revenues. In addition, certain other expenses, recorded in "Other operation and maintenance", "Depreciation" and "Taxes, other than income" on the Statements of Income, associated with approved cost recovery mechanisms are offset against the recovery of those expenses, which are included in revenues. These mechanisms allow for direct recovery of these expenses and, in some cases, returns on capital investments and performance incentives. As a result, this measure represents the net revenues from electricity and gas operations. |
• | "Pennsylvania Adjusted Gross Margins" is a single financial performance measure of the electricity transmission and distribution operations of the Pennsylvania Regulated segment and PPL Electric. In calculating this measure, utility revenues and expenses associated with approved recovery mechanisms, including energy provided as a PLR, are offset with minimal impact on earnings. Costs associated with these mechanisms are recorded in "Energy purchases," "Other operation and maintenance," (which are primarily Act 129 and Universal Service program costs), "Depreciation" (which is primarily related to the Act 129 Smart Meter program) and "Taxes, other than income," (which is primarily gross receipts tax) on the Statements of Income. This measure represents the net revenues from the Pennsylvania Regulated segment's and PPL Electric's electricity delivery operations. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
U.K. Regulated | |||||||||||
U.K. Adjusted Gross Margins | $ | 572 | $ | 536 | $ | 36 | |||||
Impact of changes in foreign currency exchange rates | 53 | ||||||||||
U.K. Adjusted Gross Margins excluding impact of foreign currency exchange rates | $ | (17 | ) | ||||||||
Kentucky Regulated | |||||||||||
Kentucky Adjusted Gross Margins | |||||||||||
LG&E | $ | 241 | $ | 226 | $ | 15 | |||||
KU | 294 | 281 | 13 | ||||||||
Total Kentucky Adjusted Gross Margins | $ | 535 | $ | 507 | $ | 28 | |||||
Pennsylvania Regulated | |||||||||||
Pennsylvania Adjusted Gross Margins | |||||||||||
Distribution | $ | 278 | $ | 258 | $ | 20 | |||||
Transmission | 136 | 108 | 28 | ||||||||
Total Pennsylvania Adjusted Gross Margins | $ | 414 | $ | 366 | $ | 48 |
2018 Three Months | |||||||||||||||||||
U.K. Adjusted Gross Margins | Kentucky Adjusted Gross Margins | Pennsylvania Adjusted Gross Margins | Other (a) | Operating Income (b) | |||||||||||||||
Operating Revenues | $ | 604 | (c) | $ | 872 | $ | 639 | $ | 11 | $ | 2,126 | ||||||||
Operating Expenses | |||||||||||||||||||
Fuel | — | 214 | — | — | 214 | ||||||||||||||
Energy purchases | — | 80 | 161 | — | 241 | ||||||||||||||
Other operation and maintenance | 32 | 25 | 26 | 385 | 468 | ||||||||||||||
Depreciation | — | 17 | 8 | 244 | 269 | ||||||||||||||
Taxes, other than income | — | 1 | 30 | 52 | 83 | ||||||||||||||
Total Operating Expenses | 32 | 337 | 225 | 681 | 1,275 | ||||||||||||||
Total | $ | 572 | $ | 535 | $ | 414 | $ | (670 | ) | $ | 851 | ||||||||
2017 Three Months | |||||||||||||||||||
U.K. Adjusted Gross Margins | Kentucky Adjusted Gross Margins | Pennsylvania Adjusted Gross Margins | Other (a) | Operating Income (b) | |||||||||||||||
Operating Revenues | $ | 559 | (c) | $ | 809 | $ | 573 | $ | 10 | $ | 1,951 | ||||||||
Operating Expenses | |||||||||||||||||||
Fuel | — | 191 | — | — | 191 | ||||||||||||||
Energy purchases | — | 69 | 146 | — | 215 | ||||||||||||||
Other operation and maintenance | 23 | 26 | 29 | 392 | 470 | ||||||||||||||
Depreciation | — | 16 | 4 | 222 | 242 | ||||||||||||||
Taxes, other than income | — | — | 28 | 47 | 75 | ||||||||||||||
Total Operating Expenses | 23 | 302 | 207 | 661 | 1,193 | ||||||||||||||
Total | $ | 536 | $ | 507 | $ | 366 | $ | (651 | ) | $ | 758 |
(a) | Represents amounts excluded from Adjusted Gross Margins. |
(b) | As reported on the Statements of Income. |
(c) | Excludes ancillary revenues of $11 million and $9 million for the three months ended March 31, 2018 and 2017. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating Revenues | $ | 639 | $ | 573 | $ | 66 | |||||
Operating Expenses | |||||||||||
Operation | |||||||||||
Energy purchases | 161 | 146 | 15 | ||||||||
Other operation and maintenance | 133 | 163 | (30 | ) | |||||||
Depreciation | 85 | 75 | 10 | ||||||||
Taxes, other than income | 32 | 29 | 3 | ||||||||
Total Operating Expenses | 411 | 413 | (2 | ) | |||||||
Other Income (Expense) - net | 6 | — | 6 | ||||||||
Interest Expense | 37 | 33 | 4 | ||||||||
Income Taxes | 49 | 48 | 1 | ||||||||
Net Income | $ | 148 | $ | 79 | $ | 69 |
Three Months | |||
Distribution volume | $ | 20 | |
PLR (a) | 17 | ||
Transmission Formula Rate | 28 | ||
Other | 1 | ||
Total | $ | 66 |
(a) | The increase for the three month period was primarily due to higher energy volumes as described below. |
Three Months | |||
Corporate service costs | $ | (16 | ) |
Vegetation management | (5 | ) | |
Storm costs | 4 | ||
Payroll-related costs | (13 | ) | |
Act 129 | (3 | ) | |
Bad debts | 3 | ||
Total | $ | (30 | ) |
Three Months | |||
Change in pre-tax income | $ | 29 | |
Reduction in U.S. federal income tax rate | (25 | ) | |
Depreciation and other items not normalized (a) | (5 | ) | |
Other | 2 | ||
Total | $ | 1 |
(a) | The decrease is primarily due to the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018, on the flow-through of tax benefits associated with the regulatory treatment of taxes on plant related activity. |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 148 | $ | 79 | |||
Special items, gains (losses), after-tax (a) | — | — |
(a) | There are no items that management considers special for the periods presented. |
Three Months | |||
Pennsylvania Adjusted Gross Margins | $ | 48 | |
Other operation and maintenance | 27 | ||
Depreciation | (6 | ) | |
Taxes, other than income | (1 | ) | |
Other Income (Expense) - net | 6 | ||
Interest Expense | (4 | ) | |
Income Taxes | (1 | ) | |
Net Income | $ | 69 |
2018 Three Months | 2017 Three Months | ||||||||||||||||||||||
Adjusted Gross Margins | Other (a) | Operating Income (b) | Adjusted Gross Margins | Other (a) | Operating Income (b) | ||||||||||||||||||
Operating Revenues | $ | 639 | $ | — | $ | 639 | $ | 573 | $ | — | $ | 573 | |||||||||||
Operating Expenses | |||||||||||||||||||||||
Energy purchases | 161 | — | 161 | 146 | — | 146 | |||||||||||||||||
Other operation and maintenance | 26 | 107 | 133 | 29 | 134 | 163 | |||||||||||||||||
Depreciation | 8 | 77 | 85 | 4 | 71 | 75 | |||||||||||||||||
Taxes, other than income | 30 | 2 | 32 | 28 | 1 | 29 | |||||||||||||||||
Total Operating Expenses | 225 | 186 | 411 | 207 | 206 | 413 | |||||||||||||||||
Total | $ | 414 | $ | (186 | ) | $ | 228 | $ | 366 | $ | (206 | ) | $ | 160 |
(a) | Represents amounts excluded from Adjusted Gross Margins. |
(b) | As reported on the Statements of Income. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating Revenues | $ | 872 | $ | 809 | $ | 63 | |||||
Operating Expenses | |||||||||||
Operation | |||||||||||
Fuel | 214 | 191 | 23 | ||||||||
Energy purchases | 80 | 69 | 11 | ||||||||
Other operation and maintenance | 205 | 205 | — | ||||||||
Depreciation | 117 | 105 | 12 | ||||||||
Taxes, other than income | 17 | 16 | 1 | ||||||||
Total Operating Expenses | 633 | 586 | 47 | ||||||||
Other Income (Expense) - net | (3 | ) | (4 | ) | 1 | ||||||
Interest Expense | 50 | 49 | 1 | ||||||||
Interest Expense with Affiliate | 5 | 4 | 1 | ||||||||
Income Taxes | 39 | 63 | (24 | ) | |||||||
Net Income | $ | 142 | $ | 103 | $ | 39 |
Three Months | |||
Volumes | $ | 67 | |
Base rates | 30 | ||
TCJA (a) | (34 | ) | |
Total | $ | 63 |
(a) | Represents estimated income tax savings owed to customers related to the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. A regulatory liability was recorded for this amount. See Note 7 for additional information. |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 142 | $ | 103 | |||
Special items, gains (losses), after-tax | — | (1 | ) |
Three Months | |||
Adjusted Gross Margins | $ | 28 | |
Other operation and maintenance | (1 | ) | |
Depreciation | (11 | ) | |
Interest Expense | (2 | ) | |
Income Taxes | 24 | ||
Special items, gains (losses), after-tax (a) | 1 | ||
Net Income | $ | 39 |
(a) | See PPL's "Results of Operations - Segment Earnings - Kentucky Regulated Segment" for details of the special item. |
2018 Three Months | 2017 Three Months | ||||||||||||||||||||||
Adjusted Gross Margins | Other (a) | Operating Income (b) | Adjusted Gross Margins | Other (a) | Operating Income (b) | ||||||||||||||||||
Operating Revenues | $ | 872 | $ | — | $ | 872 | $ | 809 | $ | — | $ | 809 | |||||||||||
Operating Expenses | |||||||||||||||||||||||
Fuel | 214 | — | 214 | 191 | — | 191 | |||||||||||||||||
Energy purchases | 80 | — | 80 | 69 | — | 69 | |||||||||||||||||
Other operation and maintenance | 25 | 180 | 205 | 26 | 179 | 205 | |||||||||||||||||
Depreciation | 17 | 100 | 117 | 16 | 89 | 105 | |||||||||||||||||
Taxes, other than income | 1 | 16 | 17 | — | 16 | 16 | |||||||||||||||||
Total Operating Expenses | 337 | 296 | 633 | 302 | 284 | 586 | |||||||||||||||||
Total | $ | 535 | $ | (296 | ) | $ | 239 | $ | 507 | $ | (284 | ) | $ | 223 |
(a) | Represents amounts excluded from Adjusted Gross Margins. |
(b) | As reported on the Statements of Income. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating Revenues | |||||||||||
Retail and wholesale | $ | 407 | $ | 374 | $ | 33 | |||||
Electric revenue from affiliate | 12 | 17 | (5 | ) | |||||||
Total Operating Revenues | 419 | 391 | 28 | ||||||||
Operating Expenses | |||||||||||
Operation | |||||||||||
Fuel | 79 | 80 | (1 | ) | |||||||
Energy purchases | 76 | 64 | 12 | ||||||||
Energy purchases from affiliate | 6 | 2 | 4 | ||||||||
Other operation and maintenance | 89 | 85 | 4 | ||||||||
Depreciation | 48 | 44 | 4 | ||||||||
Taxes, other than income | 9 | 8 | 1 | ||||||||
Total Operating Expenses | 307 | 283 | 24 | ||||||||
Other Income (Expense) - net | (1 | ) | (4 | ) | 3 | ||||||
Interest Expense | 18 | 17 | 1 | ||||||||
Income Taxes | 21 | 33 | (12 | ) | |||||||
Net Income | $ | 72 | $ | 54 | $ | 18 |
Three Months | |||
Volumes | $ | 28 | |
Base rates | 16 | ||
TCJA (a) | (16 | ) | |
Total | $ | 28 |
(a) | Represents estimated income tax savings owed to customers related to the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. A regulatory liability was recorded for this amount. See Note 7 for additional information. |
Three Months | |||
Timing and scope of generation maintenance outages | 1 | ||
Storm costs | 1 | ||
Other | 2 | ||
Total | $ | 4 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 72 | $ | 54 | |||
Special items, gains (losses), after-tax (a) | — | — |
(a) | There are no items management considers special for the periods presented. |
Three Months | |||
Adjusted Gross Margins | $ | 15 | |
Other operation and maintenance | (5 | ) | |
Depreciation | (5 | ) | |
Taxes, other than income | (1 | ) | |
Other Income (Expense) - net | 3 | ||
Interest Expense | (1 | ) | |
Income Taxes | 12 | ||
Net Income | $ | 18 |
2018 Three Months | 2017 Three Months | ||||||||||||||||||||||
Adjusted Gross Margins | Other (a) | Operating Income (b) | Adjusted Gross Margins | Other (a) | Operating Income (b) | ||||||||||||||||||
Operating Revenues | $ | 419 | $ | — | $ | 419 | $ | 391 | $ | — | $ | 391 | |||||||||||
Operating Expenses | |||||||||||||||||||||||
Fuel | 79 | — | 79 | 80 | — | 80 | |||||||||||||||||
Energy purchases, including affiliate | 82 | — | 82 | 66 | — | 66 | |||||||||||||||||
Other operation and maintenance | 9 | 80 | 89 | 10 | 75 | 85 | |||||||||||||||||
Depreciation | 8 | 40 | 48 | 9 | 35 | 44 | |||||||||||||||||
Taxes, other than income | — | 9 | 9 | — | 8 | 8 | |||||||||||||||||
Total Operating Expenses | 178 | 129 | 307 | 165 | 118 | 283 | |||||||||||||||||
Total | $ | 241 | $ | (129 | ) | $ | 112 | $ | 226 | $ | (118 | ) | $ | 108 |
(a) | Represents amounts excluded from Adjusted Gross Margins. |
(b) | As reported on the Statements of Income. |
Three Months | |||||||||||
2018 | 2017 | $ Change | |||||||||
Operating Revenues | |||||||||||
Retail and wholesale | $ | 465 | $ | 435 | $ | 30 | |||||
Electric revenue from affiliate | 6 | 2 | 4 | ||||||||
Total Operating Revenues | 471 | 437 | 34 | ||||||||
Operating Expenses | |||||||||||
Operation | |||||||||||
Fuel | 135 | 111 | 24 | ||||||||
Energy purchases | 4 | 5 | (1 | ) | |||||||
Energy purchases from affiliate | 12 | 17 | (5 | ) | |||||||
Other operation and maintenance | 105 | 108 | (3 | ) | |||||||
Depreciation | 68 | 60 | 8 | ||||||||
Taxes, other than income | 8 | 8 | — | ||||||||
Total Operating Expenses | 332 | 309 | 23 | ||||||||
Other Income (Expense) - net | (3 | ) | (2 | ) | (1 | ) | |||||
Interest Expense | 25 | 24 | 1 | ||||||||
Income Taxes | 24 | 39 | (15 | ) | |||||||
Net Income | $ | 87 | $ | 63 | $ | 24 |
Three Months | |||
Volumes | $ | 38 | |
Base rates | 14 | ||
TCJA (a) | (18 | ) | |
Total | $ | 34 |
(a) | Represents estimated income tax savings owed to customers related to the impact of the U.S. federal corporate income tax rate reduction from 35% to 21%, as enacted by the TCJA, effective January 1, 2018. A regulatory liability was recorded for this amount. See Note 7 for additional information. |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 87 | $ | 63 | |||
Special items, gains (losses), after-tax | — | (1 | ) |
Three Months | |||
Adjusted Gross Margins | $ | 13 | |
Other operation and maintenance | 3 | ||
Depreciation | (6 | ) | |
Taxes, other than income | 1 | ||
Other Income (Expense) - net | (2 | ) | |
Interest Expense | (1 | ) | |
Income Taxes | 15 | ||
Special items, gains (losses), after-tax (a) | 1 | ||
Net Income | $ | 24 |
(a) | See PPL's "Results of Operations - Segment Earnings - Kentucky Regulated Segment" for details of the special item. |
2018 Three Months | 2017 Three Months | ||||||||||||||||||||||
Adjusted Gross Margins | Other (a) | Operating Income (b) | Adjusted Gross Margins | Other (a) | Operating Income (b) | ||||||||||||||||||
Operating Revenues | $ | 471 | $ | — | $ | 471 | $ | 437 | $ | — | $ | 437 | |||||||||||
Operating Expenses | |||||||||||||||||||||||
Fuel | 135 | — | 135 | 111 | — | 111 | |||||||||||||||||
Energy purchases, including affiliate | 16 | — | 16 | 22 | — | 22 | |||||||||||||||||
Other operation and maintenance | 16 | 89 | 105 | 16 | 92 | 108 | |||||||||||||||||
Depreciation | 9 | 59 | 68 | 7 | 53 | 60 | |||||||||||||||||
Taxes, other than income | 1 | 7 | 8 | — | 8 | 8 | |||||||||||||||||
Total Operating Expenses | 177 | 155 | 332 | 156 | 153 | 309 | |||||||||||||||||
Total | $ | 294 | $ | (155 | ) | $ | 139 | $ | 281 | $ | (153 | ) | $ | 128 |
(a) | Represents amounts excluded from Adjusted Gross Margins. |
(b) | As reported on the Statements of Income. |
PPL (a) | PPL Electric | LKE | LG&E | KU | |||||||||||||||
March 31, 2018 | |||||||||||||||||||
Cash and cash equivalents | $ | 629 | $ | 20 | $ | 27 | $ | 14 | $ | 11 | |||||||||
Short-term debt | 1,457 | 213 | 215 | 137 | 78 | ||||||||||||||
Long-term debt due within one year | 250 | — | — | — | — | ||||||||||||||
Notes payable with affiliates | — | 237 | — | — | |||||||||||||||
December 31, 2017 | |||||||||||||||||||
Cash and cash equivalents | $ | 485 | $ | 49 | $ | 30 | $ | 15 | $ | 15 | |||||||||
Short-term debt | 1,080 | — | 244 | 199 | 45 | ||||||||||||||
Long-term debt due within one year | 348 | — | 98 | 98 | — | ||||||||||||||
Notes payable with affiliates | — | 225 | — | — |
(a) | At March 31, 2018, $263 million of cash and cash equivalents were denominated in GBP. If these amounts would be remitted as dividends, PPL would not anticipate an incremental U.S. tax cost. See Note 5 to the Financial Statements in PPL's 2017 Form 10-K for additional information on undistributed earnings of WPD. |
PPL | PPL Electric | LKE | LG&E | KU | |||||||||||||||
2018 | |||||||||||||||||||
Operating activities | $ | 566 | $ | 76 | $ | 278 | $ | 146 | $ | 185 | |||||||||
Investing activities | (753 | ) | (246 | ) | (294 | ) | (150 | ) | (143 | ) | |||||||||
Financing activities | 331 | 141 | 13 | 3 | (46 | ) | |||||||||||||
2017 | |||||||||||||||||||
Operating activities | $ | 135 | $ | 55 | $ | 312 | $ | 142 | $ | 139 | |||||||||
Investing activities | (679 | ) | (276 | ) | (184 | ) | (94 | ) | (89 | ) | |||||||||
Financing activities | 607 | 228 | (126 | ) | (49 | ) | (50 | ) | |||||||||||
Change - Cash Provided (Used) | |||||||||||||||||||
Operating activities | $ | 431 | $ | 21 | $ | (34 | ) | $ | 4 | $ | 46 | ||||||||
Investing activities | (74 | ) | 30 | (110 | ) | (56 | ) | (54 | ) | ||||||||||
Financing activities | (276 | ) | (87 | ) | 139 | 52 | 4 |
PPL | PPL Electric | LKE | LG&E | KU | |||||||||||||||
Change - Cash Provided (Used) | |||||||||||||||||||
Net income | $ | 49 | $ | 69 | $ | 39 | $ | 18 | $ | 24 | |||||||||
Non-cash components | (64 | ) | (20 | ) | (35 | ) | (20 | ) | (33 | ) | |||||||||
Working capital | 127 | 4 | 57 | 63 | 84 | ||||||||||||||
Defined benefit plan funding | 370 | (4 | ) | (86 | ) | (54 | ) | (28 | ) | ||||||||||
Other operating activities | (51 | ) | (28 | ) | (9 | ) | (3 | ) | (1 | ) | |||||||||
Total | $ | 431 | $ | 21 | $ | (34 | ) | $ | 4 | $ | 46 |
• | Net income increased $49 million between periods and included a decrease in non-cash charges of $64 million. The decrease in non-cash charges was primarily due to a decrease in deferred income tax expense (primarily due to lower income taxes from tax benefits related to accelerated pension contributions to the U.K. pension plans in 2017 and book versus tax plant timing differences and net operating losses at EU) and an increase in the U.K. net periodic defined benefit credits (primarily due to an increase in expected returns on higher asset balances), partially offset by an increase in unrealized losses on hedging activities and an increase in depreciation expense (primarily due to additional assets placed into service, net of retirements, and higher depreciation rates effective July 1, 2017 at LG&E and KU and the impact of foreign currency exchange rates at WPD). |
• | The $127 million increase in cash from changes in working capital was primarily due to a decrease in net regulatory assets and liabilities (primarily due to the impact of the TCJA and timing of rate recovery mechanisms) and an increase in taxes payable (primarily due to an increase in current income tax benefits in 2017). |
• | Defined benefit plan funding was $370 million lower in 2018. The decrease was primarily due to the acceleration of WPD's contributions to its U.K. pension plans in 2017. |
• | Net income increased $69 million between the periods and included a decrease in non-cash charges of $20 million. The decrease in non-cash charges was primarily driven by a $20 million decrease in deferred income taxes (primarily due to book versus tax plant timing differences and net operating losses). |
• | The $28 million decrease in cash provided by other operating activities was primarily due to an increase in non-current regulatory assets (primarily due to $17 million of storm costs incurred in March 2018). |
• | The increase in cash from changes in working capital was primarily driven by a decrease in net regulatory assets and liabilities (primarily due to the impact of the TCJA and timing of rate recovery mechanisms), an increase in accounts payable (primarily due to timing of payments) and an increase in taxes payable (primarily due to timing of payments), partially offset by an increase in accounts receivable (primarily due to colder weather in 2018 compared with 2017) and a decrease in other current liabilities (primarily due to timing of payments). |
• | Defined benefit plan funding was $86 million higher in 2018. |
• | The increase in cash from changes in working capital was primarily driven by lower tax payments in 2018 compared with 2017, a decrease in net regulatory assets and liabilities (primarily due to the impact of the TCJA and the timing of rate recovery mechanisms), and an increase in accounts payable (primarily due to timing of payments), partially offset by an increase in accounts receivable (primarily due to colder weather in 2018 compared with 2017) and a decrease in other current liabilities (primarily due to timing of payments). |
• | Defined benefit plan funding was $54 million higher in 2018. |
• | The increase in cash from changes in working capital was primarily driven by an increase in taxes payable (primarily due to the timing of payments), a decrease in net regulatory assets and liabilities (primarily due to the impact of the TCJA and the timing of rate recovery mechanisms) and an increase in accounts payable (primarily due to timing of payments), partially offset by an increase in accounts receivable (due to colder weather in 2018 compared with 2017) and a decrease in other current liabilities (primarily due to the timing of payments). |
• | Defined benefit plan funding was $28 million higher in 2018. |
PPL | PPL Electric | LKE | LG&E | KU | |||||||||||||||
Decrease (Increase) | $ | (73 | ) | $ | 29 | $ | (110 | ) | $ | (56 | ) | $ | (54 | ) |
PPL | PPL Electric | LKE | LG&E | KU | |||||||||||||||
Change - Cash Provided (Used) | |||||||||||||||||||
Debt issuance/retirement, net | $ | 80 | $ | — | $ | 100 | $ | 100 | $ | — | |||||||||
Stock issuances/redemptions, net | 27 | — | — | — | — | ||||||||||||||
Dividends | (15 | ) | 4 | — | 53 | (9 | ) | ||||||||||||
Capital contributions/distributions, net | (100 | ) | 33 | — | — | ||||||||||||||
Change in short-term debt, net | (375 | ) | 9 | (87 | ) | (100 | ) | 13 | |||||||||||
Notes payable with affiliate | — | 93 | — | — | |||||||||||||||
Other financing activities | 7 | — | — | (1 | ) | — | |||||||||||||
Total | $ | (276 | ) | $ | (87 | ) | $ | 139 | $ | 52 | $ | 4 |
Committed Capacity | Borrowed | Letters of Credit and Commercial Paper Issued | Unused Capacity | ||||||||||||
PPL Capital Funding Credit Facilities | $ | 1,350 | $ | — | $ | 369 | $ | 981 | |||||||
PPL Electric Credit Facility | 650 | — | 214 | 436 | |||||||||||
LKE Credit Facility | 75 | — | — | 75 | |||||||||||
LG&E Credit Facility | 700 | 200 | 137 | 363 | |||||||||||
KU Credit Facilities | 598 | — | 276 | 322 | |||||||||||
Total LKE | 1,373 | 200 | 413 | 760 | |||||||||||
Total U.S. Credit Facilities (a) | $ | 3,373 | $ | 200 | $ | 996 | $ | 2,177 | |||||||
Total U.K. Credit Facilities (b) | £ | 1,185 | £ | 497 | £ | — | £ | 690 |
(a) | The commitments under the U.S. credit facilities are provided by a diverse bank group, with no one bank and its affiliates providing an aggregate commitment of more than the following percentages of the total committed capacity: PPL - 10%, PPL Electric - 7%, LKE - 18%, LG&E - 33% and KU - 37%. |
(b) | The amounts borrowed at March 31, 2018 were a USD-denominated borrowing of $200 million and GBP-denominated borrowings which equated to $484 million. The unused capacity reflects the USD-denominated borrowing amount borrowed in GBP of £143 million as of the date borrowed. At March 31, 2018, the USD equivalent of unused capacity under the U.K. committed credit facilities was $949 million. |
Committed Capacity | Borrowed | Non-affiliate Used Capacity | Unused Capacity | ||||||||||||
LKE Credit Facility | $ | 300 | $ | 237 | $ | — | $ | 63 | |||||||
LG&E Money Pool (a) | 500 | — | 137 | 363 | |||||||||||
KU Money Pool (a) | 500 | — | 78 | 422 |
(a) | LG&E and KU participate in an intercompany money pool agreement whereby LKE, LG&E and/or KU make available funds up to $500 million at an interest rate based on a market index of commercial paper issues. However, the FERC has issued a maximum aggregate short-term debt limit for each utility at $500 million from all covered sources. |
Capacity | Commercial Paper Issuances | Unused Capacity | |||||||||
PPL Capital Funding | $ | 1,000 | $ | 345 | $ | 655 | |||||
PPL Electric | 650 | 213 | 437 | ||||||||
LG&E | 350 | 137 | 213 | ||||||||
KU | 350 | 78 | 272 | ||||||||
Total LKE | 700 | 215 | 485 | ||||||||
Total PPL | $ | 2,350 | $ | 773 | $ | 1,577 |
Exposure Hedged | Fair Value, Net - Asset (Liability) (a) | Effect of a 10% Adverse Movement in Rates (b) | Maturities Ranging Through | |||||||
PPL | ||||||||||
Cash flow hedges | ||||||||||
Cross-currency swaps (c) | 702 | 80 | (85 | ) | 2028 | |||||
Economic hedges | ||||||||||
Interest rate swaps (d) | 147 | (23 | ) | (2 | ) | 2033 | ||||
LKE | ||||||||||
Economic hedges | ||||||||||
Interest rate swaps (d) | 147 | (23 | ) | (2 | ) | 2033 | ||||
LG&E | ||||||||||
Economic hedges | ||||||||||
Interest rate swaps (d) | 147 | (23 | ) | (2 | ) | 2033 |
(a) | Includes accrued interest, if applicable. |
(b) | Effects of adverse movements decrease assets or increase liabilities, as applicable, which could result in an asset becoming a liability. Sensitivities represent a 10% adverse movement in interest rates, except for cross-currency swaps which also includes a 10% adverse movement in foreign currency exchange rates. |
(c) | Changes in the fair value of these instruments are recorded in equity and reclassified into earnings in the same period during which the item being hedged affects earnings. |
(d) | Realized changes in the fair value of such economic hedges are recoverable through regulated rates and any subsequent changes in the fair value of these derivatives are included in regulatory assets or regulatory liabilities. |
10% Adverse Movement in Rates | |||
PPL | $ | 629 | |
PPL Electric | 163 | ||
LKE | 171 | ||
LG&E | 63 | ||
KU | 94 |
Exposure Hedged | Fair Value, Net - Asset (Liability) | Effect of a 10% Adverse Movement in Foreign Currency Exchange Rates (a) | Maturities Ranging Through | ||||||||||
Net investment hedges (b) | £ | 140 | $ | (1 | ) | $ | (20 | ) | 2018 | ||||
Economic hedges (c) | 2,094 | (69 | ) | (276 | ) | 2020 |
(a) | Effects of adverse movements decrease assets or increase liabilities, as applicable, which could result in an asset becoming a liability. |
(b) | To protect the value of a portion of its net investment in WPD, PPL executes forward contracts to sell GBP. |
(c) | To economically hedge the translation risk of expected earnings denominated in GBP. |
• | PPL Electric is required to purchase electricity to fulfill its obligation as a PLR. Potential commodity price risk is mitigated through its PUC-approved cost recovery mechanism and full-requirement supply agreements to serve its PLR customers which transfer the risk to energy suppliers. |
• | LG&E's and KU's rates include certain mechanisms for fuel, fuel-related expenses and energy purchases. In addition, LG&E's rates include a mechanism for natural gas supply expenses. These mechanisms generally provide for timely recovery of market price fluctuations associated with these expenses. |
• | WPD is exposed to volumetric risk which is significantly mitigated as a result of the method of regulation in the U.K. Under the RIIO-ED1 price control regulations, recovery of such exposure occurs on a two year lag. See Note 1 in PPL's 2017 Form 10-K for additional information on revenue recognition under RIIO-ED1. |
• | PPL Electric, LG&E and KU are exposed to volumetric risk on retail sales, mainly due to weather and other economic conditions for which there is limited mitigation between rate cases. |
PPL | ||||||||||||||
PPL | Electric | LKE | LG&E | KU | ||||||||||
Defined Benefits | X | X | X | X | X | |||||||||
Income Taxes | X | X | X | X | X | |||||||||
Regulatory Assets and Liabilities | X | X | X | X | X | |||||||||
Price Risk Management | X | |||||||||||||
Goodwill Impairment | X | X | X | X | ||||||||||
AROs | X | X | X | X | ||||||||||
Revenue Recognition - Unbilled Revenue | X | X | X |
• | "Item 3. Legal Proceedings" in each Registrant's 2017 Form 10-K; and |
• | Notes 7 and 10 to the Financial Statements. |
- | Distribution Agreement, dated February 23, 2018, by and among PPL Corporation and J.P. Morgan Securities, LLC, Barclays Capital Inc., Citigroup Global Markets Inc., JPMorgan Chase Bank, National Association, London Branch, Barclays Bank PLC and Citibank N.A. (Exhibit 1.1 to PPL Corporation Form 8-K Report (File No. 1-11459) dated February 23, 2018) | |
- | Final Terms, dated March 23, 2018, of Western Power Distribution (South Wales) plc £30,000,000 RPI Index Linked Senior Unsecured Notes due March 2036 | |
- | Amended and Restated Trust Deed, relating to the £3,000,000,000 Euro Medium Term Note Programme of the Issuers, dated September 9, 2016, by and among Western Power Distribution (East Midlands) plc, Western Power Distribution (South Wales) plc, Western Power Distribution (South West) plc and Western Power Distribution (West Midlands) plc as Issuers, and HSBC Corporate Trustee Company (UK) Limited as Note Trustee | |
- | Supplement Prospectus, dated March 15, 2018 to the £3,000,000,000 Euro Medium Term Note Programme, entered into by Western Power Distribution (East Midlands) plc, Western Power Distribution (South Wales) plc, Western Power Distribution (South West) plc and Western Power Distribution (West Midlands) plc, dated as of September 15, 2017 | |
- | Amendment Agreement, dated March 13, 2018, between Western Power Distribution (West Midlands) plc and the banks party thereto, as Bookrunners and Mandated Lead Arrangers, HSBC Bank plc and Mizuho Bank Ltd., as Joint Coordinators, and Bank of America Merrill Lynch International Limited, as Facility Agent, relating to the £300 million Multicurrency Revolving Credit Facility Agreement originally dated April 4, 2011 and amended and restated on July 29, 2014 | |
- | Amendment Agreement, dated March 13, 2018, between Western Power Distribution (East Midlands) plc and the banks party thereto, as Bookrunners and Mandated Lead Arrangers, HSBC Bank plc and Mizuho Bank Ltd., as Joint Coordinators, and Bank of America Merrill Lynch International Limited, as Facility Agent, relating to the £300 million Multicurrency Revolving Credit Facility Agreement originally dated April 4, 2011 and amended and restated on July 29, 2014 | |
- | £130,000,000 Term Facility Agreement, dated March 20, 2018, between Western Power Distribution plc and HSBC Bank plc and Mizuho Bank, Ltd., as Mandated Lead Arrangers, and Mizuho Bank, Ltd., as Facility Agent. | |
- | Amendment Agreement, dated March 21, 2018, between Western Power Distribution (South West) plc and the banks party thereto, as Bookrunners and Mandated Lead Arrangers, HSBC Bank plc and Mizuho Bank Ltd., as Joint Coordinators, and Mizuho Bank, Ltd., as Facility Agent, relating to the £245 million Multicurrency Revolving Credit Facility Agreement originally dated January 12, 2012 and amended and restated on July 29, 2014 | |
- | £5,000,000 Letter of Credit Facility entered into between Western Power Distribution (South West) plc and Svenska Handelsbanken AB dated as of February 20, 2018 | |
- | £75,000,000 Facility Letter entered into between Western Power Distribution (South West) plc and Svenska Handelsbanken AB dated as of February 28, 2018 | |
- | Amendment No. 6 to the Amended and Restated Supplemental Executive Retirement Plan, dated March 23, 2018 | |
- | PPL Corporation and Subsidiaries Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends | |
- | PPL Electric Utilities Corporation and Subsidiaries Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends | |
- | LG&E and KU Energy LLC and Subsidiaries Computation of Ratio of Earnings to Fixed Charges | |
- | Louisville Gas and Electric Company Computation of Ratio of Earnings to Fixed Charges | |
- | Kentucky Utilities Company Computation of Ratio of Earnings to Fixed Charges | |
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, for the quarterly period ended March 31, 2018, filed by the following officers for the following companies: | ||
- | PPL Corporation's principal executive officer | |
- | PPL Corporation's principal financial officer | |
- | PPL Electric Utilities Corporation's principal executive officer | |
- | PPL Electric Utilities Corporation's principal financial officer | |
- | LG&E and KU Energy LLC's principal executive officer | |
- | LG&E and KU Energy LLC's principal financial officer | |
- | Louisville Gas and Electric Company's principal executive officer |
- | Louisville Gas and Electric Company's principal financial officer | |
- | Kentucky Utilities Company's principal executive officer | |
- | Kentucky Utilities Company's principal financial officer | |
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for the quarterly period ended March 31, 2018, furnished by the following officers for the following companies: | ||
- | PPL Corporation's principal executive officer and principal financial officer | |
- | PPL Electric Utilities Corporation's principal executive officer and principal financial officer | |
- | LG&E and KU Energy LLC's principal executive officer and principal financial officer | |
- | Louisville Gas and Electric Company's principal executive officer and principal financial officer | |
- | Kentucky Utilities Company's principal executive officer and principal financial officer | |
101.INS | - | XBRL Instance Document |
101.SCH | - | XBRL Taxonomy Extension Schema |
101.CAL | - | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | - | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | - | XBRL Taxonomy Extension Label Linkbase |
101.PRE | - | XBRL Taxonomy Extension Presentation Linkbase |
PPL Corporation | |||
(Registrant) | |||
Date: | May 3, 2018 | /s/ Stephen K. Breininger | |
Stephen K. Breininger Vice President and Controller | |||
(Principal Accounting Officer) | |||
PPL Electric Utilities Corporation | |||
(Registrant) | |||
Date: | May 3, 2018 | /s/ Marlene C. Beers | |
Marlene C. Beers Controller | |||
(Principal Financial Officer and Principal Accounting Officer) | |||
LG&E and KU Energy LLC | |||
(Registrant) | |||
Louisville Gas and Electric Company | |||
(Registrant) | |||
Kentucky Utilities Company | |||
(Registrant) | |||
Date: | May 3, 2018 | /s/ Kent W. Blake | |
Kent W. Blake Chief Financial Officer | |||
(Principal Financial Officer and Principal Accounting Officer) |
1 | Issuer: | Western Power Distribution (South Wales) plc | |
2 | (i) Series Number: | 2018-1 | |
(ii) Tranche Number: | 1 | ||
(iii) Date on which the Notes will be consolidated and form a single Series | Not Applicable | ||
3 | Specified Currency or Currencies: | Pounds Sterling (“£”) | |
4 | Aggregate Nominal Amount: | ||
(i) Series: | £ | ||
(ii) Tranche: | £ |
5 | (i) Issue Price of Tranche: | 104.282 per cent. of the Aggregate Nominal Amount | |
6 | (i) Specified Denominations: | £100,000 and integral multiples of £1,000 in excess thereof up to and including £199,000. No Notes in definitive form will be issued with a denomination of integral multiples above £199,000. | |
(ii) Calculation Amount: (Applicable to Notes in definitive form) | £1,000 | ||
7 | (i) Issue Date: | 26 March 2018 | |
(ii) Interest Commencement Date: | Issue Date | ||
8 | Maturity Date: | 26 March 2036 | |
9 | Interest Basis: | Index Linked Interest (further particulars specified below) | |
10 | Redemption Basis: | Subject to any purchase and cancellation or early redemption, the Notes will be redeemed on the Maturity Date at 100 per cent. of their nominal amount | |
11 | Change of Interest Basis or Redemption/ Payment Basis: | Not Applicable | |
12 | Put/Call Options: | Restructuring Put Option | |
(further particulars specified in paragraph 22) | |||
13 | Date approval by Committee of the Board of Directors for issuance of Notes obtained: | 28 February 2018 | |
Provisions Relating to Interest (if any) Payable | |||
14 | Fixed Rate Note Provisions | Applicable | |
(i) Rate of Interest: | 0.01 per cent. per annum payable semi-annually in arrear (as adjusted in accordance with Condition 7(a) (Application of the Index Ratio) | ||
(ii) Interest Payment Dates: | 26 March and 26 September in each year from and including 26 September 2018 to and including the Maturity Date | ||
(iii) Fixed Coupon Amount: (Applicable to Notes in definitive form) | £0.050 per Calculation Amount per semi-annual period (as adjusted in accordance with Condition 7(a) (Application of the Index Ratio)) | ||
(iv) Broken Amount: (Applicable to Notes in definitive form) | Not Applicable | ||
(v) Day Count Fraction: | Actual/Actual ICMA | ||
(vi) Determination Dates: | 26 March and 26 September in each year | ||
15 | Floating Rate Note Provisions | Not Applicable | |
16 | Zero Coupon Note Provisions | Not Applicable | |
17 | Index Linked Interest Note Provisions | Applicable | |
(i) Rate of Interest: | Fixed, calculated in accordance with paragraph 14 above | ||
(ii) Minimum Indexation Factor: | Not Applicable | ||
(iii) Maximum Indexation Factor: | Not Applicable |
(iv) Base Index Figure: | 276.40645 calculated as an interpolation between RPI figures in December 2017 and January 2018 | ||
(v) Limited Indexation Month(s): | Not Applicable | ||
(vi) Reference Gilt: | 0.125 per cent. Index-Linked Treasury Stock due November 2036 | ||
(vii) Index Figure applicable | 3 months lag | ||
18 | Ratings Downgrade Rate Adjustment | Not Applicable | |
Provisions Relating to Redemption | |||
19 | Index Linked Redemption Provisions | Applicable | |
(i) Minimum Indexation Factor: | Not Applicable | ||
(ii) Maximum Indexation Factor: | Not Applicable | ||
(iii) Base Index Figure: | 276.40645 calculated as an interpolation between RPI figures in December 2017 and January 2018 | ||
(iv) Reference Gilt: | 0.125 per cent. Index-Linked Treasury Stock due November 2036 | ||
(v) Index Figure applicable | 3 months lag | ||
(vi) Redeemable in part: | Not Applicable | ||
20 | Issuer Call | Not Applicable | |
21 | Investor Put | Applicable (Condition 6(g) (Redemption at the Option of Noteholders on a Restructuring Event) applies) | |
(i) Optional Redemption Date(s): | On the Put Date (as specified in the relevant Put Event Notice) (where (Condition 6(g) (Redemption at the Option of Noteholders on a Restructuring Event) applies) | ||
(ii) Notice Period: | As per Condition 6(g) (Redemption at the Option of Noteholders on a Restructuring Event) | ||
(iii) Optional Redemption Amount(s): | £1,000 (as adjusted in accordance with Condition 7(a) (Application of the Index Ratio) and paragraph 19 above) per Calculation Amount | ||
22 | Restructuring Put Option | Applicable 6(g) (Redemption at the Option of the Noteholders on a Restructuring Event) applies | |
(i) Optional Redemption Amount(s): | £1,000 (as adjusted in accordance with Condition 7(a) (Application of the Index Ratio) and paragraph 19 above) per Calculation Amount | ||
23 | Final Redemption Amount: | £1,000 (as adjusted in accordance with Condition 7(a) (Application of the Index Ratio) and paragraph 19 above) per Calculation Amount | |
24 | Early Redemption Amount payable on redemption for taxation reasons or on event of default | £1,000 (as adjusted in accordance with Condition 7(a) (Application of the Index Ratio) and paragraph 19 above) per Calculation Amount | |
General Provisions Applicable to the Notes | |||
25 | Form of Notes: | Bearer |
(i) if issued in Bearer form: | Temporary Global Note exchangeable for a permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the permanent Global Note. | ||
New Global Note/NSS: | Yes (NGN) | ||
26 | Additional Financial Centre(s) or other special provisions relating to payment dates: | Not Applicable | |
27 | Talons for future Coupons to be attached to Definitive Notes: | No |
1 | Listing and Admission to Trading | ||
(i) Listing and admission to trading: | Application is expected to be made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the London Stock Exchange’s regulated market and listing on the Official List of the UK Listing Authority and this is expected to be effective from 26 March 2018 | ||
(ii) Estimate of total expenses related to admission to trading: | £1750 | ||
2 | Ratings | ||
Ratings: | The Notes to be issued have been rated: | ||
Baa1 (Stable) by Moody's Investors Service Limited (Moody's); and | |||
A- (Stable) by Standard & Poor's Credit Market Services Europe Limited (S&P) | |||
Each of Moody's and S&P is established in the European Union and is registered under Regulation (EC) No. 1060/2009 (as amended) | |||
3 | Interests of Natural and Legal Persons Involved in the Issue | ||
Save for any fees payable to the Managers, so far as the Issuer is aware, no person involved in the issue of the Notes has an interest material to the offer. | |||
4 | Reasons for the Offer, Estimated Net Proceeds and Total Expenses | ||
(i) Reasons for the offer | See the section entitled “Use of proceeds” in the Prospectus | ||
(ii) Estimated net proceeds: | Not Applicable | ||
(iii) Estimated total expenses: | Not Applicable | ||
5 | Yield (Fixed Rate Notes only) | ||
Indication of yield: | -0.223 per cent. | ||
6 | Operational Information | ||
(i) ISIN Code: | XS1797949267 | ||
(ii) Common Code: | 179794926 | ||
(iii) Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream Banking S.A. and the relevant identification number(s): | Not Applicable | ||
(iv) Delivery: | Delivery against payment | ||
(v) Names and addresses of additional Paying Agent(s) (if any): | Not applicable |
(vi) Intended to be held in a manner which would allow Eurosystem eligibility: | Yes. Note that the designation "yes" simply means that the Notes are intended upon issue to be deposited with one of the international central securities depositories (ICSD) as common safekeeper and registered in the name of a nominee of one of the ICSDs acting as common safekeeper, that is, held under the NSS, and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the European Central Bank (the ECB) being satisfied that Eurosystem eligibility criteria have been met. | ||
7 | Distribution | ||
(i) Method of distribution: | Non-syndicated | ||
(ii) If syndicated, names and addresses of Managers): | Not Applicable | ||
(iii) Date of Dealer Agreement: | 15 September 2017 | ||
(iv) Stabilisation Manager(s) (if any): | Not Applicable | ||
(v) If non-syndicated, name and address of relevant Dealer: | HSBC Bank plc | ||
(vi) U.S. Selling Restrictions: | Reg. S Compliance Category 2; TEFRA D not applicable | ||
(vii) Prohibition of Sales to EEA Retail Investors: | Applicable |
C L I F F O R D | CLIFFORD CHANCE LLP |
C H A N C E |
CONFORMED COPY | |||
WESTERN POWER DISTRIBUTION (EAST MIDLANS) PLC WESTERN POWER DISTRIBUTION (SOUTH WALES) PLC WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC AND WESTERN POWER DISTRIBUTION (WEST MIDLANS) PLC AS ISSUERS AND HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED AS NOTE TRUSTEE | |||
AMENDED AND RESTATED TRUST DEED RELATING TO THE £3,000,000,000 EURO MEDIUM TERM NOTE PROGRAMME OF THE ISSUERS |
CONTENTS |
Clause | Page | |
1 | Interpretation | 2 |
2 | Issue of Notes and Covenant to pay | 9 |
3 | Form of the Notes | 12 |
4 | Stamp Duties and Taxes | 14 |
5 | Application of Moneys received by the Note Trustee | 14 |
6 | Enforcement and Put Event | 15 |
7 | Proceedings | 16 |
8 | Covenant to comply with the Trust Deed | 17 |
9 | Covenants | 17 |
10 | Remuneration and Indemnification of the Note Trustee | 21 |
11 | Provisions supplemental to the Trustee Act 1925 and the Trustee Act 2000 | 22 |
12 | Note Trustee liable for Negligence | 30 |
13 | Waiver | 30 |
14 | Freedom to Act | 30 |
15 | Modification and Substitution | 31 |
16 | Appointment, Retirement and Removal of the Note Trustee | 33 |
17 | Notes held in Clearing Systems and Couponholders | 34 |
18 | Currency Indemnity | 34 |
19 | Communications | 35 |
20 | Several Obligations and No Cross-Default | 36 |
21 | Further Provisions | 36 |
22 | Governing Law and Jurisdiction | 36 |
Schedule 1 Form of Global Notes | 38 | |
Part 1 Form of CGN Temporary Global Note | 38 | |
Part 2 Form of CGN Permanent Global Note | 44 | |
Part 3 Form of NGN Temporary Global Note | 53 | |
Part 4 Form of NGN Permanent Global Note | 59 | |
Part 5 Form of Global Certificate | 66 | |
Schedule 2 Form of Definitive Bearer Note | 72 | |
Schedule 3 Form of Certificate | 75 | |
Schedule 4 Terms and Conditions of the Notes | 79 | |
Schedule 5 Form of Coupon | 122 | |
Schedule 6 Form of Talon | 124 | |
Schedule 7 Provisions for Meetings of Noteholders | 126 |
(1) | WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC, WESTERN POWER DISTRIBUTION (SOUTH WALES) PLC, WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC and WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC (each an "Issuer" and together the "Issuers"); and |
(2) | HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED (the "Note Trustee", which expression, where the context so admits, includes any other trustee or the trustees for the time being of this Trust Deed). |
(A) | The Issuers have established a note programme pursuant to which the Issuers propose to issue from time to time euro medium term notes in an aggregate nominal amount outstanding at any one time not exceeding the Programme Limit in accordance with the Dealer Agreement (the "Programme"). Notes issued by each Issuer are obligations solely of that Issuer (the "Relevant Issuer") and are without any recourse whatsoever to any other Issuer. |
(B) | The Issuers have made applications to the United Kingdom Financial Conduct Authority (the "FCA") for Notes issued under the Programme to be to be admitted to listing on the Official List of the FCA and to trading on the Regulated Market of the London Stock Exchange plc. The Regulated Market of the London Stock Exchange plc is a regulated market for the purposes of Directive 2004/39/EC on markets in financial instruments ("MIFID"). The Notes may be admitted to trading on other regulated markets (as defined in MIFID). Notes may also be issued on the basis that they will not be admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system or that they will be admitted to listing, trading and/or quotation on such unregulated markets as may be agreed with the Relevant Issuer ("Exempt Notes"). |
(C) | In connection with the Programme, the Issuers have prepared a prospectus dated 9 September 2016 which has been approved by the FCA as a prospectus issued in compliance with Directive 2003/71/EC and relevant implementing measures in the United Kingdom (the "Prospectus"). The FCA has neither approved nor reviewed the information contained in the Prospectus in connection with the Exempt Notes. |
(D) | Notice of the aggregate nominal amount of the Notes, interest (if any) payable in respect of the Notes, and the issue price of the Notes and certain other information which is applicable to each Tranche (as defined below) of the Notes will (other than in the case of Exempt Notes) be set out in a separate document containing the final terms for that Tranche (the "Final Terms"). In the case of Exempt Notes, notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of the Notes, and the issue price of the Notes and certain other information which is applicable to each Tranche will be set out in a pricing supplement document (the "Pricing Supplement"). |
(E) | In connection with the Programme, Western Power Distribution (East Midlands) plc and Western Power Distribution (West Midlands) plc and the Note Trustee entered into an amended and restated trust deed dated 10 September 2013 (the "Original Trust Deed"). The Issuers and the Note Trustee wish to amend and restate the Original Trust Deed. |
(F) | The Original Trust Deed shall be amended and restated on the terms of this Trust Deed. Except as provided below, any Notes issued on or after the date of this Trust Deed shall be issued pursuant to this Trust Deed. This does not affect any Notes issued prior to the date of this Trust Deed or any Notes issued on or after the date of this Trust Deed so as to be consolidated and form a single Series issued prior to the date of this Trust Deed. Subject to such amendment and restatement, the Original Trust Deed shall continue in full force and effect. The Original Trust Deed as amended by this Amended and Restated Trust Deed is referred to herein as the "Trust Deed". |
(G) | The Note Trustee has agreed to act as trustee of this Trust Deed on the following terms and conditions. |
1. | INTERPRETATION |
1.1 | Definitions |
1.2 | Construction of Certain References |
(a) | the records of Euroclear and Clearstream, Luxembourg shall be to the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customers' interests in the Notes; |
(b) | costs, charges, remuneration or expenses include any value added, turnover or similar tax charged in respect thereof; and |
(c) | an action, remedy or method of judicial proceedings for the enforcement of creditors' rights include references to the action, remedy or method of judicial proceedings in jurisdictions other than England as shall most nearly approximate thereto. |
1.3 | Headings |
1.4 | Offering Circular and Pricing Supplement |
1.5 | Legislation |
1.6 | Contracts |
1.7 | Schedules |
1.8 | Alternative Clearing System |
1.9 | Contracts (Rights of Third Parties) Act 1999 |
1.10 | Final Terms |
1.11 | Regulated markets |
1.12 | Amendment and Restatement |
2. | ISSUE OF NOTES AND COVENANT TO PAY |
2.1 | Issue of Notes |
2.2 | Separate Series |
2.3 | Covenant to Pay |
2.4 | Discharge |
2.5 | Payment after a Default |
(a) | by notice in writing to the Relevant Issuer, the Paying Agents and the other Agents, require the Paying Agents and the other Agents, or any of them until notified by the Note Trustee to the contrary, so far as permitted by applicable law: |
(i) | to act thereafter until otherwise instructed by the Note Trustee as Agents of the Note Trustee under this Trust Deed and the Notes of such Series on the terms of the Agency Agreement (with consequential amendments as necessary and except that the Note Trustee's liability for the indemnification, remuneration and expenses of the Paying Agents and the Transfer Agents shall be limited to the amounts for the time being held by the Note Trustee in respect of such Series on the terms of this Trust Deed and available for that purpose) and thereafter to hold all Notes, Certificates, Coupons and Talons of such Series and all moneys, documents and records held by them in respect of Notes, Certificates, Coupons and Talons of such Series on behalf of or to the order of the Note Trustee; and/or |
(ii) | to deliver all Notes, Certificates, Coupons and Talons of such Series and all moneys, documents and records held by them in respect of the Notes, Certificates, Coupons and Talons of such Series to the Note Trustee or as the Note Trustee directs in such notice provided that, such notice shall be deemed not to apply to any document or record which the relevant Agent is obliged not to release by any law or regulation; and |
(b) | by notice in writing to the Relevant Issuer require the Relevant Issuer to make all subsequent payments in respect of the Notes, Coupons and Talons of such Series to or to the order of the Note Trustee and not to the Issuing and Paying Agent with effect from the issue of any such notice to the Relevant Issuer; and from then until such notice is withdrawn, proviso (1) to Clause 2.3 (Covenant to Pay) above shall cease to have effect. |
2.6 | Rate of interest After a Default |
3. | FORM OF THE NOTES |
3.1 | Global Notes |
(a) | The Notes of each Tranche will initially be represented by a single temporary Global Note or a single permanent Global Note, as indicated in the applicable Final Terms. Each temporary Global Note shall be exchangeable, upon request as described therein, for either Definitive Notes together with, where applicable, Coupons (except in the case of Zero Coupon Notes) and, where applicable, Talons attached, or a permanent Global Note in each case in accordance with the provisions of such temporary Global Note. Each permanent Global Note shall be exchangeable for Definitive Notes together with, where applicable, Coupons (except in the case of Zero Coupon Notes) and, where applicable, Talons attached, in accordance with the provisions of such permanent Global Note. All Global Notes shall be prepared, completed and delivered to a common depositary (in the case of a CGN) or Common Safekeeper (in the case of a NGN) for Euroclear and Clearstream, Luxembourg in accordance with the provisions of the Dealer Agreement or to another appropriate depositary in accordance with any other agreement between the Relevant Issuer and the relevant Dealer(s) and, in each case, the Agency Agreement. |
(b) | Each temporary Global Note shall be printed or typed in the form or substantially in the form set out in Part 1 of Schedule 1 (Form of CGN Temporary Global Note) or Part 3 of Schedule 1 (Form of NGN Temporary Global Note), as the case may be and may be a facsimile. Each temporary Global Note shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by a person duly authorised by the Relevant Issuer on behalf of the Relevant Issuer and shall be authenticated by or on behalf of the Issuing and Paying Agent and shall, in the case of a Eurosystem-eligible NGN or in the case of a Non-eligible NGN in respect of which the Relevant Issuer has notified the Issuing and Paying Agent that effectuation is to be applicable, be effectuated by the Common Safekeeper acting on the instructions of the Issuing and Paying Agent. Each temporary Global Note so executed and authenticated shall be a binding and valid obligation of the Relevant Issuer and title thereto shall pass by delivery. |
(c) | Each permanent Global Note shall be printed or typed in the form or substantially in the form set out in Part 2 of Schedule 1 (Form of CGN Temporary Global Note) or Part 4 of Schedule 1 (Form of NGN Permanent Global Note), as the case may be and may be a facsimile. Each permanent Global Note shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by a person duly authorised by the Relevant Issuer on behalf of the Relevant Issuer and shall be authenticated by or on behalf of the Issuing and Paying Agent and shall, in the case of a Eurosystem-eligible NGN or in the case of a Non-eligible NGN in respect of which the Relevant Issuer has notified the Issuing and Paying Agent that effectuation is to be applicable, be effectuated by the Common Safekeeper acting on the instructions of the Issuing and Paying Agent. Each permanent Global Note so executed and authenticated shall be a binding and valid obligation of the Relevant Issuer and title thereto shall pass by delivery. |
3.2 | Global Certificates |
(a) | The Registered Notes of each Tranche will initially be represented by a Global Certificate. Global Certificates shall be deposited with a common depositary for, and registered in the name of a nominee of such common depositary for, Euroclear and Clearstream, Luxembourg. |
(b) | Each Global Certificate, and each interest represented by a Global Certificate, shall be exchangeable and transferable only in accordance with the provisions of such Global Certificate, the Dealer Agreement, the Agency Agreement and the rules and operating procedures for the time being of Euroclear and Clearstream, Luxembourg (as the case may be). |
(c) | Each Global Certificate shall be printed or typed in the form or substantially in the form set out in Part 5 of 1 (Form of Global Certificate) and may be a facsimile. Each Global Certificate shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by a person duly authorised by the Relevant Issuer on behalf of the Relevant Issuer and shall be authenticated manually by or on behalf of the Registrar. The Registrar shall also instruct the Common Safekeeper to effectuate the same. Each Global Certificate so executed, authenticated and effectuated shall be a binding and valid obligation of the Relevant Issuer. |
3.3 | The Definitive Notes |
3.4 | Signature |
3.5 | Entitlement to treat holder as owner |
4. | STAMP DUTIES AND TAXES |
4.1 | Stamp Duties |
4.2 | Change of Taxing Jurisdiction |
5. | APPLICATION OF MONEYS RECEIVED BY THE NOTE TRUSTEE |
5.1 | Declaration of Trust |
(a) | first, in payment of all costs, charges, expenses and Liabilities incurred by the Note Trustee (including remuneration payable to it) in carrying out its functions under this Trust Deed; |
(b) | secondly, in payment of any amounts owing in respect of the Notes or Coupons pari passu and rateably (and where interest and principal is due and payable in respect of the Notes it shall be applied pari passu between each Series unless in respect of a specific Series only); and |
(c) | thirdly, in payment of any balance to the Relevant Issuer for itself. |
5.2 | Accumulation |
5.3 | Investment |
6. | ENFORCEMENT AND PUT EVENT |
6.1 | Proceedings brought by the Note Trustee |
6.2 | Proof of default |
(a) | proof therein that as regards any specified Note the Relevant Issuer has made default in paying any principal, premium or interest due in respect of such Note shall (unless the contrary be proved) be sufficient evidence that the Relevant Issuer has made the like default as regards all other Notes which are then due and repayable; and |
(b) | proof therein that as regards any specified Coupon the Relevant Issuer has made default in paying any interest due in respect of such Coupon shall (unless the contrary be proved) be sufficient evidence that the Relevant Issuer has made the like default as regards all other Coupons which are then due and payable. |
6.3 | Put Event |
7. | PROCEEDINGS |
7.1 | Action taken by Note Trustee |
7.2 | Note Trustee only to enforce |
8. | COVENANT TO COMPLY WITH THE TRUST DEED |
8.1 | Covenant to comply with the Trust Deed |
8.2 | Note Trustee may enforce Conditions |
9. | COVENANTS |
(a) | Books of Account: at all times keep such books of account as may be necessary to comply with all applicable laws and so as to enable the financial statements of the Relevant Issuer to be prepared and allow the Note Trustee and anyone appointed by it, access to its books of account at all reasonable times during normal business hours and to discuss the same with responsible officers of the Relevant Issuer; |
(b) | Notice of Events of Default: notify the Note Trustee in writing immediately on becoming aware of the occurrence of any Event of Default and without waiting for the Note Trustee to take any further action; |
(c) | Information: So long as any of the Notes remains outstanding, the Relevant Issuer covenants with the Note Trustee that it shall give or procure to be given to the Note Trustee such opinions, certificates, information and evidence as it shall require and in such form as it shall require (including without limitation the procurement by the Relevant Issuer of all such certificates called for by the Note Trustee pursuant to Clause 11.4 (Certificate Signed by directors)) for the purpose of the discharge or exercise of the duties, trusts, powers, authorities and discretions vested in it under this Trust Deed or any other Programme document or by operation of law; |
(d) | Accounts in relation to Principal Subsidiaries: ensure that such accounts are prepared as may be necessary to determine which subsidiaries are its Principal Subsidiaries and procure that two directors of the Relevant Issuer prepare and deliver to the Note Trustee at the time of issue of every audited consolidated balance sheet of it and at any other time upon the request of the Note Trustee a certificate or report specifying the Principal Subsidiaries at the date of such balance sheet or request; |
(e) | Certificate relating to Principal Subsidiaries: give to the Note Trustee, as soon as reasonably practicable after the acquisition or disposal of any company which thereby becomes or ceases to be a Principal Subsidiary or after any transfer is made to any Subsidiary which thereby becomes a Principal Subsidiary, a certificate by two directors of the Relevant Issuer to such effect; |
(f) | Financial Statements etc: send to the Note Trustee and the Issuing and Paying Agent at the time of their issue, and, in the case of annual financial statements in any event within 180 days of the end of each financial year, electronic copies in English of every balance sheet, profit and loss account, report or other notice, statement or circular issued, or that legally or contractually should be issued, to its members or creditors (or any class of them) or any holding company thereof generally in their capacity as such and procure that the same are made available for inspection by Noteholders and Couponholders at the specified offices of the Paying Agents as soon as practicable thereafter; |
(g) | Certificate of Directors: send to the Note Trustee promptly following (i) publication of its annual audited financial statements being made available to its members, and in any event not later than 180 days after the end of its financial year and (ii) any request by the Note Trustee, a certificate signed by any two of its directors certifying that, having made all reasonable enquiries, to the best of the knowledge, information and belief as at a date not more than five days before the date of the certificate (the "Certification Date") the Relevant Issuer has complied with its obligations under this Trust Deed (or, if such is not the case, giving details of such non-compliance) and that as at such date there did not exist nor had there existed at any time prior thereto since the Certification Date in respect of the previous such certificate (or, in the case of the first such certificate, since the date of this Trust Deed) any Event of Default or Restructuring Event or (if such is not the case) specifying the same; |
(h) | Certificate of Notes Held: send to the Note Trustee as soon as practicable after being so requested by the Note Trustee a certificate of the Relevant Issuer signed by any two of its directors setting out the total number of Notes which, at the date of such certificate, were held by or on behalf of that Relevant Issuer or any Subsidiary; |
(i) | Notices to Noteholders: send to the Note Trustee not less than three days prior to the date of publication, for the Note Trustee's approval the form of each notice to be given to Noteholders in accordance with the Conditions and not publish such notice without such approval and, once given, two copies of each such notice (such approval, unless so expressed, not to constitute approval for the purposes of section 21 of the FSMA of any such notice which is a communication within the meaning of section 21 of the FSMA); |
(j) | Further Acts: so far as permitted by applicable law, do such further things and execute all such further documents as may be necessary in the opinion of the Note Trustee to give effect to this Trust Deed; |
(k) | Notice of Late Payment: forthwith give notice to the Noteholders of any unconditional payment to the Issuing and Paying Agent or the Note Trustee of any sum due in respect of the Notes or Coupons made after the due date for such payment; |
(l) | Listing and Trading: if the Notes are so listed and traded, use reasonable endeavours to maintain the listing and trading of the Notes on the Market but, if |
(m) | Change in Agents: give at least 14 days' prior notice to the Noteholders of any future appointment, resignation or removal of an Agent or of any change by an Agent of its specified office and not make any such appointment or removal without the Note Trustee's written approval; |
(n) | Provision of Legal Opinions: procure the delivery of legal opinions addressed to the Note Trustee dated the date of such delivery, in form and content acceptable to the Note Trustee: |
(i) | from Allen & Overy LLP as to the laws of England on the date of any update of the Programme and on the date of any amendment to this Trust Deed; |
(ii) | from legal advisers reasonably acceptable to the Note Trustee as to such law as may reasonably be requested by the Note Trustee on the date of any update of the Programme and on the issue date for the Notes in the event of a proposed issue of Notes of such a nature and having such features as might lead the Note Trustee to conclude (acting reasonably (and only in circumstances where, in the reasonable opinion of the Note Trustee, a legal opinion has not previously been issued in respect of Notes having such features and/or a relevant material change in law has occurred)) that it would be prudent, having regard to such nature and features, to obtain such legal opinion(s) or in the event that the Note Trustee considers it prudent (acting reasonably) in view of a change (or proposed change) in (or in the interpretation or application of) any applicable law, regulation or circumstance affecting it, the Note Trustee, the Notes, the Certificates, the Coupons, the Talons, this Trust Deed or the Agency Agreement; and |
(iii) | on each occasion on which a legal opinion is given to any Dealer in relation to any Notes pursuant to the Dealer Agreement from the legal adviser giving such opinion; |
(o) | Notification of redemption or payment: not less than the number of days specified in the relevant Condition prior to the redemption or payment date in respect of any Note or Coupon give to the Note Trustee notice in writing of the amount of such redemption or payment pursuant to the Conditions and duly proceed to redeem or pay such Notes or Coupons accordingly; |
(p) | Tax or optional redemption: if the Relevant Issuer gives notice to the Note Trustee that it intends to redeem the Notes pursuant to Conditions 6(c) (Redemption for Taxation Reasons), 6(d) (Redemption for Indexation Reasons) and 6(e) (Redemption at the Option of the Relevant Issuer) the Relevant Issuer shall, prior to giving such notice to the Noteholders, provide such information to the Note Trustee as the Note Trustee reasonably requires in order to satisfy itself of the matters referred to in such Condition; |
(q) | Change of taxing jurisdiction: if the Relevant Issuer shall become subject generally to the taxing jurisdiction of any territory or any political sub-division thereof or any authority therein or thereof having power to tax other than or in addition to Relevant Issuer's taxing jurisdiction, immediately upon becoming aware thereof notify the Note Trustee of such event and (unless the Note Trustee otherwise agrees) enter forthwith into a trust deed supplemental hereto, giving to the Note Trustee an undertaking or covenant in form and manner satisfactory to the Note Trustee in terms corresponding to the terms of Condition 10 (Taxation) with the substitution for (or, as the case may be, the addition to) the references therein to Relevant Issuer's taxing jurisdiction of references to that other or additional territory to whose taxing jurisdiction, or that of a political subdivision thereof or an authority therein or thereof, the Relevant Issuer shall have become subject as aforesaid, such trust deed also to modify Condition 10 (Taxation) so that such Condition shall make reference to that other or additional territory; |
(r) | Authorised Signatories: upon the execution hereof and thereafter forthwith upon any change of the same, deliver to the Note Trustee (with a copy to the Issuing and Paying Agent) a list of the Authorised Signatories of the Relevant Issuer, together with certified specimen signatures of the same; |
(s) | Payments: pay moneys payable by it to the Note Trustee hereunder without set off, counterclaim, deduction or withholding, unless otherwise compelled by law and in the event of any deduction or withholding compelled by law pay such additional amount as will result in the payment to the Note Trustee of the amount which would otherwise have been payable by it to the Note Trustee hereunder (save that, for the avoidance of doubt, this shall not apply to any payments of interest or principal in respect of the Notes or the Coupons, any additional amounts to be paid in respect of such sums to be instead determined in accordance with Condition 10 (Taxation)); |
(t) | Obligations of Agents: enforce its rights as against the Agents and the Registrar under the Agency Agreement and notify the Note Trustee immediately upon it becoming aware of any material breach or failure by an Agent in relation to the Notes or Coupons; |
(u) | Notice of Put Event: notify the Note Trustee in writing immediately on becoming aware of the occurrence of any Put Event; and |
(v) | Cancellation of Notes: procure the delivery of a certificate of cancellation to the Note Trustee detailing all Notes redeemed, converted or purchased by the |
10. | REMUNERATION AND INDEMNIFICATION OF THE NOTE TRUSTEE |
10.1 | Normal Remuneration |
10.2 | Extra Remuneration |
10.3 | Expenses |
(a) | in the case of payments made by the Note Trustee before such demand, carry interest from the date of the demand at the rate of 2 per cent. per annum over the base rate of the Bank of England on the date on which the Note Trustee made such payments and |
(b) | in other cases, carry interest at such rate from 30 days after the date of the demand or (where the demand specifies that payment is to be made on an earlier date) from such earlier date. |
10.4 | Value Added Tax |
10.5 | Indemnity |
10.6 | Continuing Effect |
11. | PROVISIONS SUPPLEMENTAL TO THE TRUSTEE ACT 1925 AND THE TRUSTEE ACT 2000 |
11.1 | Advice |
11.2 | Note Trustee to Assume Performance |
11.3 | Resolutions of Noteholders |
11.4 | Certificate Signed by directors |
11.5 | Certificate of Auditors |
11.6 | Delivery of Certificate |
11.7 | Deposit of Documents |
11.8 | Discretion |
11.9 | Note Trustee's consent |
11.10 | Agents |
11.11 | Delegation |
11.12 | Nominees |
11.13 | Forged Notes |
11.14 | Confidentiality |
11.15 | Determinations Conclusive |
11.16 | Currency Conversion |
11.17 | Events of Default etc. |
11.18 | Payment for and Delivery of Notes |
11.19 | Notes Held by the Relevant Issuer etc. |
11.20 | Legal Opinions |
11.21 | Programme Limit |
11.22 | Responsibility for agents etc |
11.23 | Reliance on certification of clearing system |
11.24 | Noteholders as a class |
11.25 | Note Trustee not responsible for investigations |
11.26 | No obligation to monitor |
11.27 | Entry on the Register |
11.28 | Interests of accountholders or participants |
11.29 | Note Trustee not Responsible |
11.30 | Freedom to Refrain |
11.31 | Right to Deduct or Withhold |
11.32 | Error of judgment |
11.33 | Professional charges |
11.34 | Expenditure by the Note Trustee |
11.35 | Regulatory Position |
(a) | to delegate any of the functions which fall to be performed by an authorised person under FSMA to any other agent or person which also has the necessary authorisations and licences; and |
(b) | to apply for authorisation under FSMA and perform any or all such functions itself if, in its absolute discretion, it considers it necessary, desirable or appropriate to do so. |
11.36 | Not Bound to Act |
11.37 | Personal Data |
12. | NOTE TRUSTEE LIABLE FOR NEGLIGENCE |
13. | WAIVER |
14. | FREEDOM TO ACT |
15. | MODIFICATION AND SUBSTITUTION |
15.1 | Modification |
15.2 | Substitution |
(a) | The Note Trustee may, without the consent of the Noteholders or Couponholders, agree to the substitution of the Relevant Issuer's successor in business (the "Substituted Obligor") in place of the Relevant Issuer (or of any previous substitute under this Subclause) as the principal debtor under this Trust Deed, the Notes, the Coupons and the Talons provided that: |
(i) | a deed is executed or undertaking given by the Substituted Obligor to the Note Trustee, in form and manner satisfactory to the Note Trustee, agreeing to be bound by this Trust Deed, the Notes, the Coupons and the Talons (with consequential amendments as the Note Trustee may deem appropriate, including any necessary change of the law governing the Notes, the Coupons, the Talons and/or the Trust Deed) as if the Substituted Obligor had been named in this Trust Deed, the Notes, the Certificates, the Coupons and the Talons as the principal debtor in place of the Relevant Issuer or any previous substitute under this Subclause; |
(ii) | the Note Trustee is satisfied that (i) the Substituted Obligor has obtained all governmental and regulatory approvals and consents necessary for its assumption of liability as principal debtor in respect of the Notes and the Coupons in place of the Relevant Issuer (or such previous substitute as aforesaid) and (ii) such approvals and consents are at the time of substitution in full force and effect; |
(iii) | the Note Trustee may request legal opinions in a form and manner acceptable to it in relation to the Substituted Obligor: |
(iv) | without prejudice to the rights of reliance of the Note Trustee under Subclause 15.2(b) the Note Trustee is satisfied that the said substitution is not materially prejudicial to the interests of the Noteholders; |
(v) | Moody's and S&P have confirmed in writing to the Note Trustee that the substitution of the Substituted Obligor will not result in a downgrading of the then current credit rating of such rating agencies applicable to the class of debt represented by the Notes; |
(vi) | if the Substituted Obligor is subject generally to the taxing jurisdiction of a territory or any authority of or in that territory with power to tax (the "Substituted Territory") other than the territory to the taxing jurisdiction of which (or to any such authority of or in which) the Relevant Issuer is subject generally (the "Issuer's Territory"), the Substituted Obligor shall (unless the Note Trustee otherwise agrees) give to the Note Trustee an undertaking satisfactory to the Note Trustee in terms corresponding to Condition 10 (Taxation) with the substitution for the references in that Condition to the Relevant Issuer's Territory of references to the Substituted Territory whereupon the Trust Deed, the Notes, the Certificates, the Coupons and the Talons shall be read accordingly; |
(vii) | if any two directors of the Substituted Obligor certify that it will be solvent immediately prior to such substitution, the Note Trustee need not have regard to the Substituted Obligor's financial condition, profits or prospects or compare them with those of the Relevant Issuer or any previous substitute under this Subclause; |
(viii) | the Relevant Issuer, and the Substituted Obligor comply with such other requirements as the Note Trustee may direct in the interests of the Noteholders and the Couponholders; and |
(ix) | (unless the Relevant Issuer's successor in business is the Substituted Obligor) the obligations of the Substituted Obligor under this Trust Deed, the Notes and the Coupons are guaranteed by the Relevant Issuer to the Note Trustee's satisfaction. |
(b) | Release of Substituted Issuer |
(c) | Completion of Substitution |
16. | APPOINTMENT, RETIREMENT AND REMOVAL OF THE NOTE TRUSTEE |
16.1 | Appointment |
16.2 | Retirement and Removal |
16.3 | Co-Note Trustees |
(a) | if the Note Trustee considers the appointment to be in the interests of the Noteholders and/or the Couponholders; or |
(b) | to conform with a legal requirement, restriction or condition in a jurisdiction in which a particular act is to be performed; or |
(c) | to obtain a judgment or to enforce a judgment or any provision of this Trust Deed in any jurisdiction. |
16.4 | Competence of a Majority of Note Trustees |
16.5 | Merger |
17. | NOTES HELD IN CLEARING SYSTEMS AND COUPONHOLDERS |
17.1 | Notes Held in Clearing Systems |
17.2 | Couponholders |
18. | CURRENCY INDEMNITY |
18.1 | Currency of Account and Payment |
18.2 | Extent of Discharge |
18.3 | Indemnity |
18.4 | Indemnity Separate |
19. | COMMUNICATIONS |
19.1 | Method |
19.2 | Deemed Receipt |
19.3 | No Notice to Couponholders |
20. | SEVERAL OBLIGATIONS AND NO CROSS-DEFAULT |
21. | FURTHER PROVISIONS |
21.1 | Partial Invalidity |
21.2 | Counterparts |
22. | GOVERNING LAW AND JURISDICTION |
22.1 | Governing Law |
22.2 | Jurisdiction |
22.3 | Service of process |
Date | Amount of decrease in nominal amount of this temporary Global Note | Reason for decrease in nominal amount of this temporary Global Note (exchange, cancellation or forfeiture) | Nominal amount of this temporary Global Note on issue or following such decrease | Notation made by or on behalf of the Issuing and Paying Agent |
Issue Date | not applicable | not applicable |
(a) | is freely transferable by delivery and such transfer shall operate to confer upon the transferee all rights and benefits appertaining hereto and to bind the transferee with all obligations appertaining hereto pursuant to the Conditions |
(b) | the holder of this permanent Global Note is and shall be absolutely entitled as against all previous holders to receive all amounts by way of amounts payable upon redemption, interest or otherwise payable in respect of this permanent Global Note and the Issuer has waived against such holder and any previous holder of this permanent Global Note all rights of set-off or counterclaim that would or might otherwise be available to it in respect of the obligations evidenced by this Global Note and |
(c) | payment upon due presentation of this permanent Global Note as provided herein shall operate as a good discharge against such holder and all previous holders of this permanent Global Note. |
Date | Amount of increase/decrease in nominal amount of this permanent Global Note | Reason for increase/decrease in nominal amount of this permanent Global Note (initial issue, exchange, cancellation, forfeiture or payment, stating amount of payment made) | Nominal amount of this permanent Global Note following such increase/decrease | Notation made by or on behalf of the Issuing and Paying Agent |
Due date of payment | Date of payment | Amount of interest | Notation made by or on behalf of the Issuing and Paying Agent |
Date of exercise | Nominal amount of this permanent Global Note in respect of which exercise is made | Date of which exercise of such option is effective | Notation made by or on behalf of the Issuing and Paying Agent |
(a) | is freely transferable by delivery and such transfer shall operate to confer upon the transferee all rights and benefits appertaining hereto and to bind the transferee with all obligations appertaining hereto pursuant to the Conditions; |
(b) | the holder of this permanent Global Note is and shall be absolutely entitled as against all previous holders to receive all amounts by way of amounts payable upon redemption, interest or otherwise payable in respect of this permanent Global Note and the Issuer has waived against such holder and any previous holder of this permanent Global Note all rights of set-off or counterclaim that would or might otherwise be available to it in respect of the obligations evidenced by this Global Note and; |
(c) | payment upon due presentation of this permanent Global Note as provided herein shall operate as a good discharge against such holder and all previous holders of this permanent Global Note. |
(a) | if the Notes represented by this Global Certificate are held on behalf of Euroclear or Clearstream, Luxembourg or any other clearing system (an "Alternative Clearing System") and any such clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so or |
__________________________________ | |
____________________________________ |
Dated | __________________________________ |
Signed | Certifying Signature |
____________________________________ |
(a) | The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the holder of the Notes represented by this Global Certificate or (if such signature corresponds with the name as it appears on the face of this Global Certificate) be certified by a notary public or a recognised bank or be |
(b) | A representative of the Noteholder should state the capacity in which he signs e.g. executor. |
[Denomination] | [lSIN] | [Series] | [Certif. No.] |
• | • | ||
• | • | ||
• | • |
Dated | |
Signed ____________________________ | Certifying Signature |
(a) | The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the holder of the Notes represented by this Certificate or (if such signature corresponds with the name as it appears on the face of this Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require. |
1. | Form, Denomination and Title |
2. | No Exchange of Notes and Transfers of Registered Notes |
(a) | No Exchange of Notes: Registered Notes may not be exchanged for Bearer Notes. Bearer Notes of one Specified Denomination may not be exchanged for Bearer Notes of another Specified Denomination. Bearer Notes may not be exchanged for Registered Notes. |
(b) | Transfer of Registered Notes: One or more Registered Notes may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered Notes to be transferred, together with the form of transfer endorsed on such Certificate, (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the Relevant Issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may reasonably require. In the case of a transfer of part only of a holding of Registered Notes represented by one Certificate, a new Certificate shall be issued to the transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be |
(c) | Exercise of Options or Partial Redemption in Respect of Registered Notes: In the case of an exercise of a Relevant Issuer's or Noteholders' option in respect of, or a partial redemption of, a holding of Registered Notes represented by a single Certificate, a new Certificate shall be issued to the holder to reflect the exercise of such option or in respect of the balance of the holding not redeemed. In the case of a partial exercise of an option resulting in Registered Notes of the same holding having different terms, separate Certificates shall be issued in respect of those Notes of that holding that have the same terms. New Certificates shall only be issued against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new Certificate representing the enlarged holding shall only be issued against surrender of the Certificate representing the existing holding. |
(d) | Delivery of New Certificates: Each new Certificate to be issued pursuant to Conditions 2(b) (Transfer of Registered Notes) or (c) (Exercise of Options or Partial Redemption in Respect of Registered Notes) shall be available for delivery within three business days of receipt of the form of transfer or Exercise Notice (as defined in Condition 6(f) (Redemption at the Option of Noteholders)) and surrender of the Certificate for exchange. Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such form of transfer, Exercise Notice or Certificate shall have been made or, at the option of the holder making such delivery or surrender as aforesaid and as specified in the relevant form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the relevant Transfer Agent the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 2(d) (Delivery of New Certificates), business day means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be). |
(e) | Transfers Free of Charge: Transfers of Notes and Certificates on registration, transfer, exercise of an option or partial redemption shall be effected without charge by or on behalf of the Relevant Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require). |
(f) | Closed Periods: No Noteholder may require the transfer of a Registered Note to be registered (i) during the period of 15 days ending on the due date for redemption of that |
3. | Status |
4. | Negative Pledge and Restriction on Distribution of Dividends |
(a) | Negative Pledge: So long as any Note or Coupon remains outstanding (as defined in the Trust Deed), the Relevant Issuer will ensure that no Relevant Indebtedness (as defined below) of the Relevant Issuer and no guarantee by the Relevant Issuer of any Relevant Indebtedness of any person will be secured by a mortgage, charge, lien, pledge or other security interest (each a Security Interest) upon, or with respect to, any of the present or future business, undertaking, assets or revenues (including any uncalled capital) of the Relevant Issuer unless the Relevant Issuer, before or at the same time as the creation of the Security Interest, takes any and all action necessary to ensure that: |
(i) | all amounts payable by the Relevant Issuer under the Notes, the Coupons and the Trust Deed are secured equally and rateably with the Relevant Indebtedness or guarantee, as the case may be, by the same Security Interest, in each case to the satisfaction of the Note Trustee; or |
(ii) | such other Security Interest or guarantee or other arrangement (whether or not including the giving of a Security Interest) is provided in respect of all amounts payable by the Relevant Issuer under the Notes, the Coupons and the Trust Deed either (A) as the Note Trustee shall in its absolute discretion deem not materially less beneficial to the interests of the Noteholders or (B) as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders. |
(b) | Restriction on distribution of dividends: So long as any Note or Coupon remains outstanding (as defined in the Trust Deed), the Relevant Issuer shall not at any time declare or make a distribution (as defined in Section 1000 of the Corporation Tax Act 2010) or grant a loan or any other credit facility to any of its shareholders unless (1) immediately following the occurrence of any such event, the Net Debt (as defined below) at such time would not exceed 85 per cent. of the Regulatory Asset Base relating to the |
(c) | Definitions: In this Condition: |
(i) | amounts credited to current accounts or deposits and certificates of deposit (with a term not exceeding three months) at, or issued by, any bank, building society or other financial institution; |
(ii) | cash in hand; |
(iii) | the lower of book and market value (calculated, where relevant, by reference to their bid price) of gilts issued by the United Kingdom Government; and |
(iv) | subordinated intra-group items, loans from Affiliates (as defined in Condition 7 below) and shareholder loans, |
(i) | any present or future indebtedness (whether being principal, premium, interest or other amounts) in the form of or represented by bonds, notes, debentures, debenture stock, loan stock or other securities, whether issued for cash or in whole or in part for a consideration other than cash, and which are or are capable |
(ii) | monies borrowed or raised from, or any acceptance credit opened by, a bank, building society or other financial institution; and |
(iii) | any leasing or hire purchase agreement which would be treated as a finance lease in the accounts of the relevant person. |
5. | Interest and other Calculations |
(a) | Interest on Fixed Rate Notes: Each Fixed Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 5(f) (Calculations). |
(b) | Interest on Floating Rate Notes: |
(i) | Interest Payment Dates: Each Floating Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 5(f) (Calculations). Such Interest Payment Date(s) is/are either shown in the Final Terms as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown in the Final Terms, Interest Payment Date shall mean each date which falls the number of months or other period shown in the Final Terms as the Interest Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date. |
(ii) | Business Day Convention: If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would |
(iii) | Rate of Interest for Floating Rate Notes: The Rate of Interest in respect of Floating Rate Notes for each Interest Accrual Period shall be determined in the manner specified in the Final Terms and the provisions below relating to either ISDA Determination or Screen Rate Determination shall apply, depending upon which is specified in the Final Terms. |
(A) | ISDA Determination for Floating Rate Notes |
(x) | the Floating Rate Option is as specified in the relevant Final Terms |
(y) | the Designated Maturity is a period specified in the relevant Final Terms and |
(z) | the relevant Reset Date is the first day of that Interest Accrual Period unless otherwise specified in the relevant Final Terms. |
(B) | Screen Rate Determination for Floating Rate Notes |
(x) | Where Screen Rate Determination is specified in the Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period will, subject as provided below, be either: |
(1) | the offered quotation; or |
(2) | the arithmetic mean of the offered quotations, |
(y) | if the Relevant Screen Page is not available, or if sub-paragraph (x)(1) applies and no such offered quotation appears on the Relevant Screen Page or if sub paragraph (x)(2) above applies and fewer than three such offered quotations appear on the Relevant Screen Page in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Euro-zone office of each of the Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time), or if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Rate of Interest for such Interest Accrual Period shall be the arithmetic mean of such offered quotations as determined by the Calculation Agent; and |
(z) | if paragraph (y) above applies and the Calculation Agent determines that fewer than two Reference Banks are providing offered quotations, subject as provided below, the Rate of Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of |
(c) | Zero Coupon Notes: Where a Note the Interest Basis of which is specified to be zero coupon is repayable prior to the Maturity Date and is not paid when due, the amount due and payable prior to the Maturity Date shall be the Early Redemption Amount of such Note. As from the Maturity Date, the Rate of Interest for any overdue principal of such a Note shall be a rate per annum (expressed as a percentage) equal to the Amortisation Yield (as described in Condition 6(b)(i) (Early Redemption:). |
(d) | Accrual of Interest: Interest shall cease to accrue on each Note on the due date for redemption unless, upon due presentation, payment is improperly withheld or refused, in which event interest shall continue to accrue (both before and after judgment) at the |
(e) | Margin, Maximum/Minimum Rates of Interest, Redemption Amounts and Rounding: |
(i) | If any Margin is specified in the Final Terms (either (x) generally, or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, in the case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of (y), calculated in accordance with Condition 5(b) (Interest on Floating Rate Notes) above by adding (if a positive number) or subtracting the absolute value (if a negative number) of such Margin, subject always to the next paragraph. |
(ii) | If any Maximum or Minimum Rate of Interest or Redemption Amount is specified in the Final Terms, then any Rate of Interest or Redemption Amount shall be subject to such maximum or minimum, as the case may be. |
(iii) | For the purposes of any calculations required pursuant to these Conditions (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For these purposes unit means the lowest amount of such currency that is available as legal tender in the countries of such currency. |
(f) | Calculations: The amount of interest payable per Calculation Amount in respect of any Note for any Interest Accrual Period shall be equal to the product of the Rate of Interest, the Calculation Amount specified in the Final Terms, and the Day Count Fraction for such Interest Accrual Period, unless an Interest Amount (or a formula for its calculation) is applicable to such Interest Accrual Period, in which case the amount of interest payable per Calculation Amount in respect of such Note for such Interest Accrual Period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable per Calculation Amount in respect of such Interest Period shall be the sum of the Interest Amounts payable in respect of each of those Interest Accrual Periods. In respect of any other period for which interest is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be for the period for which interest is required to be calculated. |
(g) | Determination and Publication of Rates of Interest, Interest Amounts, Final Redemption Amounts, Early Redemption Amounts and Optional Redemption Amounts: The Calculation Agent shall, as soon as practicable on each Interest Determination Date, or such other time on such date as the Calculation Agent may be |
(h) | Linear Interpolation: Where "Linear Interpolation" is specified as applicable in respect of an Interest Period in the applicable Final Terms, the Rate of Interest for such Interest Period shall be calculated by the Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate (where Screen Rate Determination is specified as applicable in the applicable Final Terms) or the relevant Floating Rate Option (where ISDA Determination is specified as applicable in the applicable Final Terms), one of which shall be determined as if the Designated Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which shall be determined as if the Designated Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period provided however that if there is no rate available for a period of time next shorter or, as the case may be, next longer, then the Agent shall determine such rate at such time and by reference to such sources as it determines appropriate. |
(i) | Determination or Calculation by Note Trustee: If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Accrual Period or any Interest Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, or take any action that it is required to do pursuant to these Conditions, the Calculation Agent shall forthwith notify the Relevant Issuer, the Note Trustee and the Issuing and Paying Agent and the Note Trustee (whether or not it receives such notice) shall do so (or shall appoint an agent on its behalf to do so) and such determination or calculation shall be deemed to have been made by the Calculation Agent. In doing so, the Note Trustee shall apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its opinion, it can do so, and, in all other respects it shall do so in such manner as it shall deem fair and reasonable in all the circumstances. |
(j) | Definitions: In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below: |
(i) | in the case of a currency other than euro, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the principal financial centre for such currency and in each (if any) Business Centre; and/or |
(ii) | in the case of euro, a day on which the TARGET System is operating (a TARGET Business Day) and a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in each (if any) Business Centre. |
(i) | if Actual/Actual or Actual/Actual (ISDA) is specified in the Final Terms, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365) |
(ii) | if Actual/365 (Fixed) is specified in the Final Terms, the actual number of days in the Calculation Period divided by 365 |
(iii) | if Actual/365 (Sterling) is specified in the Final Terms, the actual number of days in the Calculation Period divided by 365 or, in the case of an Interest Period Date falling in a leap year, 366 |
(iv) | if Actual/360 is specified in the Final Terms, the actual number of days in the Calculation Period divided by 360 |
(v) | if 30/360, 360/360 or Bond Basis is specified in the Final Terms, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: |
Day Count Fraction = | [360 x (Y2 – Y1)] + [30 x (M2 –M1) + (D2-D1)] __________________________________ 360 |
(vi) | if 30E/360 or Eurobond Basis is specified in the Final Terms, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: |
Day Count Fraction = | [360 x (Y2 – Y1)] + [30x(M2 –M1) + (D2-D1)] __________________________________ 360 |
(vii) | if 30E/360 (ISDA) is specified in the Final Terms, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: |
Day Count Fraction = | [360x(Y2 – Y1)] +[30x(M2 –M1)+(D2-D1)] __________________________________ 360 |
(viii) | if Actual/Actual-ICMA is specified in the Final Terms, |
(a) | if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Periods normally ending in any year; and |
(b) | if the Calculation Period is longer than one Determination Period, the sum of: |
(x) | the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and |
(y) | the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year |
(i) | in respect of an Interest Accrual Period, the amount of interest payable per Calculation Amount for that Interest Accrual Period and which, in the case of Fixed Rate Notes, and unless otherwise specified in the Final Terms, shall mean the Fixed Coupon Amount or Broken Amount specified in the Final Terms as |
(ii) | in respect of any other period, the amount of interest payable per Calculation Amount for that period. |
(k) | Calculation Agent: The Relevant Issuer shall procure that there shall at all times be one or more Calculation Agents if provision is made for them in the Final Terms and for so long as any Note is outstanding (as defined in the Trust Deed). Where more than one Calculation Agent is appointed in respect of the Notes, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Accrual Period or to calculate any Interest Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, as the case may be, or to comply with any other requirement, the Relevant Issuer shall (with the prior approval of the Note Trustee) appoint a leading bank or financial institution engaged in the interbank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid. |
(l) | Adjustment to Rate of Interest: If, in respect of a Tranche of Notes, Ratings Downgrade Rate Adjustment is specified in the relevant Final Terms as being applicable, the Rate of Interest specified in the Final Terms (the Initial Rate of Interest) and payable on the Notes will be subject to adjustment from time to time in the event of a Rating Change or Rating Changes, within the period from and including the Issue Date of such Tranche of Notes to and including the date falling 18 months from such Issue Date (the Rating Change Period, with the final date of such Rating Change Period being the Rating Change Period End Date), which adjustment shall be determined as follows. |
(i) | the lowest Rating then assigned to the Notes is A- or A3 or higher, then (unless there is a subsequent Rating Change within the Rating Change Period) from and including the first Interest Payment Date following the Rating Change, the rate of interest payable on the Notes shall be the Initial Rate of Interest; |
(ii) | the lowest Rating then assigned to the Notes is BBB+ or Baa1, then (unless there is a subsequent Rating Change within the Rating Change Period) from and including the first Interest Payment Date following the Rating Change, the rate of interest payable on the Notes shall be the Initial Rate of Interest plus 0.25 per cent. per annum; |
(iii) | the lowest Rating then assigned to the Notes is BBB or Baa2, then (unless there is a subsequent Rating Change within the Rating Change Period) from and |
(iv) | the lowest Rating then assigned to the Notes is BBB- or Baa3 or lower, or if such Ratings are withdrawn by both of Moody's Investor Services Limited and Standard & Poor's Credit Market Services Europe Limited, then (unless there is a subsequent Rating Change within the Rating Change Period) from and including the first Interest Payment Date following the Rating Change the rate of interest payable on the Notes shall be the Initial Rate of Interest plus 0.75 per cent. per annum |
6. | Redemption, Purchase and Options |
(a) | Final Redemption: |
(b) | Early Redemption: |
(i) | Zero Coupon Notes: |
(A) | The Early Redemption Amount payable in respect of any Zero Coupon Note, the Early Redemption Amount of which is not linked to an index and/or a formula, upon redemption of such Note pursuant to Condition 6(c) (Redemption for Taxation Reasons) or upon it becoming due and payable as provided in Condition 12 (Events of Default) shall be the Amortised Face Amount (calculated as provided below) of such Note unless otherwise specified in the Final Terms. |
(B) | Subject to the provisions of sub-paragraph (C) below, the Amortised Face Amount of any such Note shall be the scheduled Final Redemption Amount of such Note on the Maturity Date discounted at a rate per annum (expressed as a percentage) equal to the Amortisation Yield (which, if none is shown in the Final Terms, shall be such rate as would produce an Amortised Face Amount equal to the issue price of the Notes if they were discounted back to their issue price on the Issue Date) compounded annually. |
(C) | If the Early Redemption Amount payable in respect of any such Note upon its redemption pursuant to Condition 6(c) (Redemption for Taxation Reasons) or upon it becoming due and payable as provided in Condition 12 (Events of Default) is not paid when due, the Early Redemption Amount due and payable in respect of such Note shall be the Amortised Face Amount of such Note as defined in sub-paragraph (B) above, except that such sub-paragraph shall have effect as though the date on which the Note becomes due and payable were the Relevant Date. The calculation of the Amortised Face Amount in accordance with this subparagraph shall continue to be made (both before and after judgment) until the Relevant Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the scheduled Final Redemption Amount of such Note on the Maturity Date together with any interest that may accrue in accordance with Condition 5(c) (Zero Coupon Notes). |
(ii) | Other Notes: The Early Redemption Amount payable in respect of any Note (other than Notes described in (i) above), upon redemption of such Note pursuant to Condition 6(c) (Redemption for Taxation Reasons) or upon it becoming due and payable as provided in Condition 12 (Events of Default), shall be the Final Redemption Amount unless otherwise specified in the Final Terms. |
(c) | Redemption for Taxation Reasons: The Notes may be redeemed at the option of the Relevant Issuer in whole, but not in part, on any Interest Payment Date (if this Note is either a Floating Rate Note or an Indexed Note) or at any time (if this Note is neither a Floating Rate Note nor an Indexed Note), on giving not less than 30 nor more than 60 days' notice to the Note Trustee and the Noteholders in accordance with Condition 18 (Notices) (which notice shall be irrevocable) at their Early Redemption Amount (as described in Condition 6(b) (Early Redemption) above) (together with interest accrued to the date fixed for redemption), if (i) the Relevant Issuer satisfies the Note Trustee immediately before the giving of such notice that it has or will become obliged to pay additional amounts as described under Condition 10 (Taxation) as a result of any change in, or amendment to, the laws or regulations of the United Kingdom or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first Tranche of the Notes, and (ii) such obligation cannot be avoided by the Relevant Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Relevant Issuer would be obliged to pay such additional amounts were a payment in respect of the Notes then due. Prior to the publication of any notice of redemption pursuant to this Condition 6(c) (Redemption for Taxation Reasons), the Relevant Issuer shall deliver to the Note Trustee a certificate signed by two directors of the Relevant Issuer stating that the obligation referred to in (i) above cannot be avoided by the Relevant Issuer taking reasonable measures available to it and the Note Trustee shall be entitled to accept such certificate as sufficient evidence of the satisfaction of the condition precedent set out in (ii) above, in which event it shall be conclusive and binding on Noteholders and Couponholders. |
(d) | Redemption for Indexation Reasons: Upon the occurrence of any Index Event (as defined below), the Relevant Issuer may, upon giving not less than 30 nor more than 60 days' notice to the Note Trustee and the holders of the Indexed Notes in accordance with Condition 18 (Notices), redeem all (but not some only) of the Indexed Notes of all Tranches on any Interest Payment Date at the Principal Amount Outstanding (adjusted in accordance with Condition 7(a) (Application of the Index Ratio)) plus accrued but unpaid interest. No single Tranche of Indexed Notes may be redeemed in these circumstances unless all the other Tranches of Indexed Notes linked to the same underlying Index are also redeemed at the same time. Before giving any such notice, |
(e) | Redemption at the Option of the Relevant Issuer: If Call Option is specified in the Final Terms, the Relevant Issuer may, on giving not less than 15 nor more than 30 days' irrevocable notice to the Note Trustee and the Noteholders redeem all or, if so provided, some of the Notes on any Optional Redemption Date. Any such redemption of Notes shall be at their Optional Redemption Amount together with interest accrued up to (and including) the date fixed for redemption. Any such redemption or exercise must relate to Notes of a nominal amount at least equal to the Minimum Redemption Amount to be redeemed specified in the Final Terms and no greater than the Maximum Redemption Amount to be redeemed specified in the Final Terms. |
(f) | Redemption at the Option of Noteholders: If Investor Put is specified in the Final Terms, the Relevant Issuer shall, at the option of the holder of any such Note, upon the holder of such Note giving not less than 15 nor more than 30 days' notice to the Relevant Issuer (or such other notice period as may be specified in the Final Terms) redeem such Note on the Optional Redemption Date(s) (specified in the Final Terms) at its Optional Redemption Amount (specified in the Final Terms) together with interest accrued up to (and including) the date fixed for redemption. |
(g) | Redemption at the Option of the Noteholders on a Restructuring Event |
(i) | If Restructuring Put Option is specified in the Final Terms (and for the avoidance of doubt, the Investor Put is also specified in the Final Terms), and: |
(a) | if, at any time while any of the Notes remains outstanding, a Restructuring Event (as defined below) occurs and prior to the commencement of or during the Restructuring Period (as defined below): |
(A) | an independent financial adviser (as described below) shall have certified in writing to the Note Trustee that such Restructuring Event will not be or is not, in its opinion, materially prejudicial to the interests of the Noteholders; or |
(B) | if there are Rated Securities (as defined below), each Rating Agency (as defined below) that at such time has assigned a current rating to the Rated Securities confirms in writing to the Relevant Issuer at its request (which it shall make as set out below) that it will not be withdrawing or reducing the then current rating assigned to the Rated Securities by it from an investment grade rating (BBB-/Baa3, or their respective equivalents for the time being, or better) to a non-investment grade rating (BB+/Bal, or their respective equivalents for the time being, or worse) or, if the Rating Agency shall have already rated the Rated Securities below investment grade (as described above), the rating will not be lowered by one full rating category or more, in each case as a result, in whole or in part, of any event or circumstance comprised in or arising as a result of the applicable Restructuring Event, |
(b) | if, at any time while any of the Notes remains outstanding, a Restructuring Event occurs and (subject to Condition 6(g)(i)(a) (Redemption at the Option of the Noteholders on a Restructuring Event): |
(A) | within the Restructuring Period, either: |
(i) | if at the time such Restructuring Event occurs there are Rated Securities, a Rating Downgrade (as defined below) in respect of such Restructuring Event also occurs; or |
(ii) | if at such time there are no Rated Securities, a Negative Rating Event (as defined below) in respect of such Restructuring Event also occurs; and |
(B) | an independent financial adviser shall have certified in writing to the Note Trustee that such Restructuring Event is, in its opinion, materially prejudicial to the interests of the Noteholders (a Negative Certification), |
(ii) | Promptly upon the Relevant Issuer becoming aware that a Put Event (as defined below) has occurred, and in any event not later than 14 days after the occurrence of a Put Event, the Relevant Issuer shall, and at any time upon the Note Trustee if so requested by the holders of at least one-quarter in nominal amount of the Notes then outstanding shall, give notice (a Put Event Notice) to the Noteholders in accordance with Condition 18 (Notices) specifying the nature of the Put Event and the procedure for exercising the Restructuring Put Option. |
(iii) | To exercise the Restructuring Put Option, the holder of a Note must comply with the provisions of Condition 6(f) (Redemption at the Option of Noteholders). The applicable notice period for the purposes of Condition 6(f) (Redemption at the Option of Noteholders), as applied to a Restructuring Put Option, shall be the period (the Put Period) of 45 days after that on which a Put Event Notice is given. Subject to the relevant Noteholder having complied with Condition 6(f) (Redemption at the Option of Noteholders), the Relevant Issuer shall redeem or, at the option of that Relevant Issuer, purchase (or procure the purchase of) the relevant Note on the fifteenth day after the date of expiry of the Put Period (the Put Date) unless previously redeemed or purchased. |
(iv) | For the purposes of these Conditions: |
(a) | Distribution Services Area means, in respect of a Relevant Issuer, the area specified as such in the distribution licence granted to it on 1 October 2001 under section 6(l)(c) of the Electricity Act 1989 (as amended by section 30 of the Utilities Act 2000), as of the date of such distribution licence. |
(b) | A Negative Rating Event shall be deemed to have occurred if (1) a Relevant Issuer does not, either prior to or not later than 14 days after the date of the relevant Restructuring Event, seek, and thereupon use all reasonable endeavours to obtain, a rating of the Notes or any other unsecured and unsubordinated debt of that Relevant Issuer having an initial maturity of five years or more from a Rating Agency or (2) if it does so seek and use such endeavours, it is unable, as a result of such |
(c) | A Put Event occurs on the date of the last to occur of (1) a Restructuring Event, (2) either a Rating Downgrade or, as the case may be, a Negative Rating Event and (3) the relevant Negative Certification. |
(d) | Rating Agency means Standard & Poor's Credit Market Services Europe Limited or any of its subsidiaries and their successors (Standard & Poor's) or Moody's Investors Service Limited or any of its subsidiaries and their successors (Moody's) or any rating agency substituted for any of them (or any permitted substitute of them) by the Relevant Issuer from time to time with the prior written approval of the Note Trustee. |
(e) | A Rating Downgrade shall be deemed to have occurred in respect of a Restructuring Event if the then current rating assigned to the Rated Securities by any Rating Agency (whether provided by a Rating Agency at the invitation of the Relevant Issuer or by its own volition) is withdrawn or reduced from an investment grade rating (BBB-/Baa3), or their respective equivalents for the time being, or better) to a non-investment grade rating (BB+/Bal), or their respective equivalents for the time being, or worse) or, if the Rating Agency shall then have already rated the Rated Securities below investment grade (as described above), the rating is lowered one full rating category or more. |
(f) | Rated Securities means the Notes, if at any time and for so long as they have a rating from a Rating Agency, and otherwise any other unsecured and unsubordinated debt of a Relevant Issuer having an initial maturity of five years or more which is rated by a Rating Agency. |
(g) | Restructuring Event means the occurrence of any one or more of the following events: |
(A) (i) | the Secretary of State for Business, Innovation and Skills (or any successor) giving the Relevant Issuer written notice of any revocation of its Distribution Licence; or |
(ii) | the Relevant Issuer agreeing in writing with the Secretary of State for Business, Innovation and Skills (or any successor) to any revocation or surrender of its Distribution Licence; or |
(iii) | any legislation (whether primary or subordinate) being enacted which terminates or revokes the Distribution Licence of the Relevant Issuer; |
(B) | any modification (other than a modification which is of a formal, minor or technical nature) being made to the terms and conditions upon which a Relevant Issuer is authorised and empowered under relevant legislation to distribute electricity in the Distribution Services Area unless two directors of such Issuer have certified in good faith to the Note Trustee that the modified terms and conditions are not materially less favourable to the business of that Relevant Issuer; |
(C) | any legislation (whether primary or subordinate) is enacted which removes, qualifies or amends (other than an amendment which is of a formal, minor or technical nature) the duties of the Secretary of State for Business, Innovation and Skills (or any successor) and/or the Gas and Electricity Markets Authority (or any successor) under section 3A of the Electricity Act 1989 (as amended by the Utilities Act 2000) (as this may be amended from time to time) unless two directors of such Relevant Issuer have certified in good faith to the Note Trustee that such removal, qualification or amendment does not have a materially adverse effect on the financial condition of that Relevant Issuer. |
(h) | Restructuring Period means: |
(A) | if at the time a Restructuring Event occurs there are Rated Securities, the period of 90 days starting from and including the day on which that Restructuring Event occurs; or |
(B) | if at the time a Restructuring Event occurs there are no Rated Securities, the period starting from and including the day on which that Restructuring Event occurs and ending on the day 90 days following the later of (aa) the date (if any) on which the Relevant Issuer shall seek to obtain a rating as contemplated by the definition of Negative Rating Event; (bb) the expiry of the 14 days referred to in the definition of Negative Rating Event and |
(i) | A Rating Downgrade or a Negative Rating Event or a non-investment grade rating shall be deemed not to have occurred as a result or in respect of a Restructuring Event if the Rating Agency making the relevant reduction in rating or, where applicable, refusal to assign a rating of at least investment grade as provided in this Condition 6(g) (Redemption at the Option of the Noteholders on a Restructuring Event), does not announce or publicly confirm or inform the Relevant Issuer in writing at its request (which it shall make as set out in the following paragraph) that the reduction or, where applicable, declining to assign a rating of at least investment grade, was the result, in whole or in part, of any event or circumstance comprised in or arising as a result of the applicable Restructuring Event. |
(h) | Purchases: The Relevant Issuer may at any time purchase Notes (provided that all unmatured Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) in the open market or otherwise at any price. |
(i) | Cancellation: All Notes purchased by or on behalf of the Relevant Issuer or its Subsidiaries may be surrendered for cancellation, in the case of Bearer Notes, by surrendering each such Note together with all unmatured Coupons and all unexchanged Talons to the Issuing and Paying Agent and, in the case of Registered Notes, by surrendering the Certificate representing such Notes to the Registrar and, in each case, if so surrendered, shall, together with all Notes redeemed by the Relevant Issuer, be cancelled forthwith (together with all unmatured Coupons and unexchanged Talons attached thereto or surrendered therewith). Any Notes so surrendered for cancellation may not be reissued or resold and the obligations of the Relevant Issuer in respect of any such Notes shall be discharged. |
7. | Indexation |
(a) | Application of the Index Ratio |
(b) | Changes in Circumstances Affecting the Index |
(i) | Change in base: If at any time and from time to time the Index is changed by the substitution of a new base therefore, then with effect from the calendar month from and including that in which such substitution takes effect (1) the definition of "Index" and "Index Figure" in Condition 8 (Definitions) shall be deemed to refer to the new date or month in substitution for January 1987 (or, as the case may be, to such other date or month as may have been substituted therefore); and (2) the new Base Index Figure shall be the product of the existing Base Index Figure and the Index Figure immediately following such substitution, divided by the Index Figure immediately prior to such substitution. |
(ii) | Delay in publication of Index: If the Index Figure relating to any month (the relevant month) which is required to be taken account for the purposes of the determination of the Index Figure applicable for any date is not published on or before the fourteenth business day before the date on which any payment of interest or principal on the Notes is due (the date for payment), the Index Figure relating to the relevant month shall be (1) such substitute index figure (if any) as an Indexation Adviser considers to have been published by the Bank of England or, as the case may be, the United Kingdom Debt Management Office (or such other designated debt manager of Her Majesty's Treasury, from time to time) for the purposes of indexation of payments on the Reference Gilt or, failing such publication, on any one or more issues of index-linked Treasury Stock selected by the Indexation Adviser (and approved by the Note Trustee); or (2) if no such determination is made by such Indexation Adviser within 7 days, the Index Figure last published (or, if later, the substitute index figure last determined pursuant to Condition 7(b)(i) (Change in base)) before the date for payment. |
(c) | Application of Changes |
(i) | in relation to a payment of principal or interest in respect of such Note other than upon final redemption of such Note, the principal or interest (as the case may be) next payable after the date of such subsequent publication shall be increased or reduced by an amount equal to (respectively) the shortfall or excess of the amount of the relevant payment made on the basis of the Index Figure applicable by virtue of Condition 7(b)(ii)(2), below or above the amount of the relevant payment that would have been due if the Index Figure subsequently published had been published on or before the fourteenth Business Day before the date for payment; and |
(ii) | in relation to a payment of principal or interest upon final redemption, no subsequent adjustment to amounts paid will be made. |
(d) | Cessation of or Fundamental Changes to the Index |
(i) | If (1) the Note Trustee has been notified by the Agent Bank (or the Calculation Agent, if applicable) that the Index has ceased to be published; or (2) the Note Trustee has been notified by the Agent Bank (or the Calculation Agent, if applicable) when any change is made to the coverage or the basic calculation of the Index which constitutes a fundamental change which would, in the opinion of the Note Trustee acting solely on the advice of an Indexation Adviser, be materially prejudicial to the interests of the Noteholders, the Note Trustee will give written notice of such occurrence to the Relevant Issuer, and the Relevant Issuer and the Note Trustee together shall seek to agree for the purpose of the Notes one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Relevant Issuer and the Noteholders in no better and no worse position than they would have been had the Index not ceased to be published or the relevant fundamental change not been made. |
(ii) | If the Relevant Issuer and the Note Trustee fail to reach agreement as mentioned above within 20 Business Days following the giving of notice as mentioned in paragraph (i), a bank or other person in London shall be appointed by the Relevant Issuer and the Note Trustee or, failing agreement on and the making of such appointment within 20 Business Days following the expiry of the day period referred to above, by the Note Trustee (in each case, such bank or other person so appointed being referred to as the Expert), to determine for the purpose of the Notes one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Relevant Issuer and the Noteholders in no better and no worse position than they would have been had the Index not ceased to be published or the relevant fundamental change not been made. Any Expert so appointed shall act as an expert and not |
(iii) | The Index shall be adjusted or replaced by a substitute index as agreed by the Relevant Issuer and the Note Trustee or as determined by the Expert pursuant to the foregoing paragraphs, as the case may be, and references in these Conditions to the Index and to any Index Figure shall be deemed amended in such manner as the Note Trustee and the Relevant Issuer agree are appropriate to give effect to such adjustment or replacement. Such amendments shall be effective from the date of such notification and binding upon the Relevant Issuer, the other Secured Creditors, the Note Trustee and the Noteholders, and the Relevant Issuer shall give notice to the Noteholders in accordance with Condition 18 (Notices) of such amendments as promptly as practicable following such notification. |
8. | Definitions |
(i) | the amount paid up or credited as paid up on the share capital of the Relevant Issuer; and |
(ii) | the total of the capital, revaluation and revenue reserves of the Group (as defined below), including any share premium account, capital redemption reserve and credit balance on the profit and loss account, but excluding sums set aside for taxation and amounts attributable to outside shareholders in Subsidiary Undertakings (as defined below) and deducting any debit balance on the profit and loss account, |
IFA = RPI m-3 + | (Day of Calculation Date -1) (Days in month of Calculation Date) | x(RPI m-2--RPI m-3 ) |
9. | Payments and Talons |
(a) | Bearer Notes: Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, be made against presentation and surrender of the relevant Notes (in the case of all other payments of principal and, in the case of interest, as specified in Condition 9(f)(v) (Unmatured Coupons and unexchanged Talons)) or Coupons (in the case of interest, save as specified in Condition 9(f)(ii) (Unmatured Coupons and unexchanged Talons)), as the case may be, at the specified office of any Paying Agent outside the United States by a cheque payable in the relevant currency drawn on, or, at the option of the holder, by transfer to an account denominated in such currency with, a Bank. Bank means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System. |
(b) | Registered Notes: |
(i) | Payments of principal in respect of Registered Notes shall be made against presentation and surrender of the relevant Certificates at the specified office of any of the Transfer Agents or of the Registrar and in the manner provided in paragraph (ii) below. |
(ii) | Interest on Registered Notes shall be paid to the person shown on the Register at the close of business on the day before the due date for payment thereof (the Record Date). Payments of interest on each Registered Note shall be made in the relevant currency by cheque drawn on a Bank and mailed to the holder (or to the first named of joint holders) of such Note at its address appearing in the Register. Upon application by the holder to the specified office of the Registrar or any Transfer Agent before the Record Date, such payment of interest may be made by transfer to an account in the relevant currency maintained by the payee with a Bank. |
(c) | Payments in the United States: Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. dollars, payments in respect thereof may be made at the specified office of any Paying Agent in New York City in the same manner as aforesaid if (i) the Relevant Issuer shall have appointed Paying Agents with specified offices outside the |
(d) | Payments subject to Fiscal Laws: All payments are subject in all cases (i) to any applicable fiscal or other laws, regulations and directives in the place of payment, but without prejudice to the provisions of Condition 10 (Taxation) and (ii) any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the Code) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or (without prejudice to Condition 10 (Taxation)) any law implementing an intergovernmental approach thereto. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments. |
(e) | Appointment of Agents: The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent initially appointed by the Issuers are listed in the Agency Agreement. The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent act solely as agents of the Issuers and do not assume any obligation or relationship of agency or trust for or with any Noteholder or Couponholder. The Issuers reserve the right at any time with the approval of the Note Trustee to vary or terminate the appointment of the Issuing and Paying Agent, any other Paying Agent, the Registrar, any Transfer Agent or the Calculation Agent(s) and to appoint additional or other Paying Agents or Transfer Agents, provided that the Issuers shall at all times maintain (i) an Issuing and Paying Agent, (ii) a Registrar in relation to Registered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv) one or more Calculation Agent(s) where the Conditions so require, (v) Paying Agents having specified offices in at least two major European cities, and (vi) such other agents as may be required by any other stock exchange on which the Notes may be listed in each case, as approved by the Note Trustee. |
(f) | Unmatured Coupons and unexchanged Talons: |
(i) | Upon the due date for redemption of Bearer Notes which comprise Fixed Rate Notes (other than Indexed Notes), such Notes should be surrendered for payment together with all unmatured Coupons (if any) relating thereto, failing which an amount equal to the face value of each missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the amount of such missing unmatured Coupon that the sum of principal so paid bears to the total principal due) shall be deducted from the Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, as the case may be, due |
(ii) | Upon the due date for redemption of any Bearer Note comprising a Floating Rate Note or Indexed Notes, unmatured Coupons relating to such Note (whether or not attached) shall become void and no payment shall be made in respect of them. |
(iii) | Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to such Note (whether or not attached) shall become void and no Coupon shall be delivered in respect of such Talon. |
(iv) | Where any Bearer Note that provides that the relative unmatured Coupons are to become void upon the due date for redemption of those Notes is presented for redemption without all unmatured Coupons, and where any Bearer Note is presented for redemption without any unexchanged Talon relating to it, redemption shall be made only against the provision of such indemnity as the Relevant Issuer may require. |
(v) | If the due date for redemption of any Note is not a due date for payment of interest, interest accrued from the preceding due date for payment of interest or the Interest Commencement Date, as the case may be, shall only be payable against presentation (and surrender if appropriate) of the relevant Bearer Note or Certificate representing it, as the case may be. Interest accrued on a Note that only bears interest after its Maturity Date shall be payable on redemption of such Note against presentation of the relevant Note or Certificate representing it, as the case may be. |
(g) | Talons: On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Issuing and Paying Agent in exchange for a further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 11 (Prescription)). |
(h) | Non-Business Days: Subject as provided in the relevant Final Terms, if any date for payment in respect of any Note or Coupon is not a business day, the holder shall not be entitled to payment until the next following business day nor to any interest or other sum in respect of such postponed payment. In this paragraph, business day means a day (other than a Saturday or a Sunday) on which banks are open for presentation and payment of debt securities and for dealings in foreign currency in the relevant place of presentation in such jurisdiction as shall be specified as "Additional Financial Centre(s)" in the relevant Final Terms and (in the case of a payment in a currency other than euro), where payment is to be made by transfer to an account maintained with a bank in the relevant currency, on which dealings may be carried on in the relevant currency in the principal |
10. | Taxation |
(a) | Other connection: to, or to a third party on behalf of, a holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note or Coupon by reason of his having some connection with the United Kingdom other than the mere holding of the Note or Coupon; or |
(b) | Lawful avoidance of withholding: to, or to a third party on behalf of, a holder who could lawfully avoid (but has not so avoided) such deduction or withholding by complying or procuring that any third party complies with any statutory requirements or by making or procuring that any third party makes a declaration of non-residence or other similar claim for exemption to any tax authority in the place where the relevant Note (or the Certificate representing it) or Coupon is presented for payment; or |
(c) | Presentation more than 30 days after the Relevant Date: presented or surrendered (or in respect of which the Certificate representing it is presented or surrendered) for payment more than 30 days after the Relevant Date except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth day. |
11. | Prescription |
12. | Events of Default |
(i) | Non-Payment: if default is made in the payment of any principal or interest due in respect of the Notes or any of them and the default continues for a period of 14 days in the case of principal and 21 days in the case of interest or, where relevant, the Relevant Issuer, having become obliged to redeem, purchase or procure the purchase of (as the case may be) any Notes pursuant to Condition 6 (Redemption, Purchase and Options) fails to do so within a period of 14 days of having become so obliged; or |
(ii) | Breach of Other Obligations: the Relevant Issuer does not perform, observe or comply with any one or more of its other obligations, covenants, conditions or provisions under the Notes or the Trust Deed and (except where the Note Trustee shall have certified to the Issuer in writing that it considers such failure to be incapable of remedy in which case no such notice or continuation as is hereinafter mentioned will be required) the failure continues for the period of 30 days (or such longer period as the Note Trustee may in its absolute discretion permit) next following the service by the Note Trustee on the Issuer of notice requiring the same to be remedied; or |
(iii) | Cross-Acceleration: if (A) any other indebtedness for borrowed money (as defined in Condition 4 (Negative Pledge and Restriction on Distribution of Dividends) but, for the purposes of this paragraph (iii), excluding Non-recourse Indebtedness) of the Relevant Issuer or any Principal Subsidiary becomes due and repayable prior to its stated maturity by reason of a default or (B) any such |
(iv) | Enforcement Proceedings: a distress, attachment, execution or other legal process is levied, enforced or sued out on or against any substantial part of the property, assets or revenues of the Relevant Issuer and is not discharged or stayed within 90 days; or |
(v) | Insolvency: the Relevant Issuer is (or is, or could be, deemed by law or a court to be) insolvent or bankrupt or unable to pay its debts, stops, suspends or threatens to stop or suspend payment of its debts generally or a material part of a particular type of its debts, proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant creditors in respect of any of such debts or a moratorium is agreed or declared or comes into effect in respect of or affecting its debts generally or any part of a particular type of the debts of the Relevant Issuer; or |
(vi) | Winding-up: (A) an administrator or liquidator is appointed in relation to the Relevant Issuer (and, in each case, not discharged within 90 days) or (B) an order is made or an effective resolution passed for the winding-up or dissolution or administration of the Relevant Issuer, or (C) the Relevant Issuer shall apply or petition for a winding-up or administration order in respect of itself or (D) the Relevant Issuer ceases or threatens to cease to carry on all or substantially all of its business or operations, in each case ((A) to (D) inclusive) except for the purpose of and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation on terms approved by the Note Trustee or by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders; or |
(vii) | Nationalisation: any step is taken by any person with a view to the seizure, compulsory acquisition, expropriation or nationalisation of all or a material part of the assets of the Relevant Issuer; or |
(viii) | Illegality: it is or will become unlawful for the Relevant Issuer to perform or comply with any one or more of its obligations under any of the Notes or the Trust Deed, |
(ix) | Definitions: in this Condition: |
(A) | which is a single purpose company whose principal assets and business are constituted by the ownership, acquisition, development and/or operation of an asset; |
(B) | none of whose indebtedness for borrowed money in respect of the financing of such ownership, acquisition, development and/or operation of an asset is subject to any recourse whatsoever to any member of the Group (other than another Excluded Subsidiary) in respect of the repayment thereof, except as expressly referred to in subparagraph (B)(II). of the definition of Non-recourse Indebtedness below; and |
(C) | which has been designated as such by the Relevant Issuer by written notice to the Note Trustee, provided that the Relevant Issuer may give written notice to the Note Trustee at any time that any Excluded Subsidiary is no longer an Excluded Subsidiary, whereupon it shall cease to be an Excluded Subsidiary. |
(A) | which is incurred by an Excluded Subsidiary; or |
(B) | in respect of which the person or persons to whom any such indebtedness for borrowed money is or may be owed by the relevant borrower (whether or not a member of the Group) has or have no recourse whatsoever to any member of the Group (other than an Excluded Subsidiary) for the repayment thereof other than: |
I. | recourse to such borrower for amounts limited to the cash flow or net cash flow (other than historic cash flow or historic net cash flow) from any specific asset or assets over or in respect of which security has been granted in respect of such indebtedness for borrowed money; and/or |
II. | recourse to such borrower for the purpose only of enabling amounts to be claimed in respect of such indebtedness for borrowed money in an enforcement of any encumbrance given by such borrower over any such asset or assets or the income, cash flow or other proceeds deriving therefrom (or given by any shareholder or the like in the borrower over its shares or the like in the capital of the borrower) to secure such indebtedness for borrowed money, provided that (aa) the extent of such recourse to such borrower is limited solely to the amount of any recoveries made on any such enforcement, and (bb) such person or persons is/are not entitled, by virtue of any right or claim arising out of or in connection with such indebtedness for borrowed money, to commence proceedings for the winding up or dissolution of the borrower or to appoint or procure the appointment of any receiver, trustee or similar person or officer in respect of the borrower or any of its assets (save for the assets the subject of such encumbrance); and/or |
III. | recourse to such borrower generally, or directly or indirectly to a member of the Group, under any form of assurance, undertaking or support, which recourse is limited to a claim for damages (other than liquidated damages and damages required to be calculated in a specified way) for breach of an obligation (not being a payment obligation or an obligation to procure payment by another or an indemnity in respect thereof or any obligation to comply or to procure compliance by another with any financial ratios or other tests of financial condition) by the person against whom such recourse is available. |
(A) | whose (a) profits on ordinary activities before tax or (b) gross assets, in each case attributable to the Relevant Issuer represent 20 per cent. or more of the consolidated profits on ordinary activities before tax of the Group or, as the case may be, consolidated gross assets of the Group, in each case as calculated by reference to the then latest audited financial statements of such Subsidiary (consolidated in the case of a company which itself has Subsidiaries) and the then latest audited consolidated financial statements of the Group provided that in the case of a Subsidiary acquired after the end of the financial period to which the then latest audited consolidated financial statements of the Group relate, the reference to the then latest audited consolidated financial statements of the Group for the purposes of the calculation above shall, until consolidated financial statements for the financial period in which the acquisition is made have been prepared and audited as aforesaid, be deemed to be a reference to such first-mentioned financial statements as if such Subsidiary had been shown in such |
(B) | to which is transferred all or substantially all of the business, undertaking and assets of a Subsidiary of the Relevant Issuer which immediately prior to such transfer is a Principal Subsidiary, whereupon the transferor Subsidiary shall cease to be a Principal Subsidiary and the transferee Subsidiary shall cease to be a Principal Subsidiary under the provisions of this sub-paragraph (B), upon publication of its next audited financial statements (but without prejudice to the provisions of sub-paragraph (A) above) but so that such transferor Subsidiary or such transferee Subsidiary may be a Principal Subsidiary of the Relevant Issuer on or at any time after the date on which such audited financial statements have been published by virtue of the provisions of sub-paragraph (A) above or before, on or at any time after such date by virtue of the provisions of this sub-paragraph (B). |
13. | Meetings of Noteholders, Modification, Waiver and Substitution |
(a) | Meetings of Noteholders: The Trust Deed contains provisions for convening meetings of Noteholders of one or more Series of Notes to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution (as defined in the Trust Deed) of a modification of any of these Conditions or any provisions of the Trust Deed. Such a meeting may be convened by Noteholders holding not less than 10 per cent. in nominal amount of the affected Series of Notes for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution shall be two or more persons holding or representing one more than 50 per cent. in nominal amount of the affected Series of Notes for the time being outstanding, or at any adjourned meeting one or more persons being or representing Noteholders whatever the nominal amount of the affected Series of Notes held or represented, unless the business of such meeting includes consideration of proposals, inter alia: |
(i) | to amend the dates of maturity or redemption of the Notes or any date for payment of interest or Interest Amounts on the Notes; |
(ii) | to reduce or cancel the nominal amount of, or any premium payable on redemption of, the Notes; |
(iii) | to reduce the rate or rates of interest in respect of the Notes or to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes; |
(iv) | if a Minimum and/or a Maximum Rate of Interest or Redemption Amount is shown in the Final Terms, to reduce any such Minimum and/or Maximum; |
(v) | to vary any method of, or basis for, calculating the Final Redemption Amount, the Early Redemption Amount or the Optional Redemption Amount, including the method of calculating the Amortised Face Amount; |
(vi) | to vary the currency or currencies of payment or denomination of the Notes; |
(vii) | to sanction the exchange or substitution for the Notes of, or the conversion of the Notes into, shares, bonds or other obligations or securities of the Relevant Issuer, whether or not those rights arise under the Trust Deed; or |
(viii) | to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass the Extraordinary Resolution, |
(b) | Modification of the Trust Deed: The Note Trustee may agree, without the consent of the Noteholders or Couponholders, (i) to any modification of any of the provisions of the Trust Deed or the Notes, or Coupons or these Conditions that is of a formal, minor or technical nature or is made to correct a manifest error, and (ii) if in the opinion of the Note Trustee the interests of the Noteholders will not be materially prejudiced thereby, to any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach of any of the provisions of the Trust Deed or the Notes, or Coupons or these Conditions, or determine that any Event of Default shall not be treated as such. Any such modification, authorisation or waiver shall be binding on the Noteholders and the Couponholders and, if the Note Trustee so requires, such modification shall be notified to the Noteholders as soon as practicable. |
(c) | Substitution: The Note Trustee may agree, subject to the execution of a deed or undertaking supplemental to the Trust Deed in form and manner satisfactory to the Note Trustee and such other conditions as the Note Trustee may require, but without the consent of the Noteholders or the Couponholders, to the substitution of the Relevant Issuer's successor in business in place of the Relevant Issuer or of any previous substituted company, as principal debtor under the Trust Deed and the Notes. In the case of such a substitution the Note Trustee may agree, without the consent of the Noteholders or the Couponholders, to a change of the law governing the Notes, the Coupons, the Talons and/or the Trust Deed provided that such change would not in the opinion of the Note Trustee be materially prejudicial to the interests of the Noteholders. |
(d) | Entitlement of the Note Trustee: In connection with the exercise of its functions (including but not limited to those referred to in this Condition) the Note Trustee shall have regard to the interests of the Noteholders as a class and shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders and the Note Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Relevant Issuer any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders. |
(e) | Modifications: These Conditions may be amended, modified or varied in relation to any Series of Notes by the terms of the relevant Final Terms in relation to such Series. |
14. | Enforcement |
15. | Indemnification of the Note Trustee |
16. | Replacement of Notes, Certificates, Coupons and Talons |
17. | Further Issues |
18. | Notices |
19. | Contracts (Rights of Third Parties) Act 1999 |
20. | Governing Law and Jurisdiction |
(a) | Governing Law: The Trust Deed, the Notes, the Coupons and the Talons and any non-contractual obligations arising out of or in connection with them are governed by, and shall be construed in accordance with, English law. |
(b) | Jurisdiction: The Courts of England are to have jurisdiction to settle any disputes that may arise out of or in connection with any Notes, Coupons or Talons and accordingly any legal action or proceedings arising out of or in connection with any Notes, Coupons or Talons (Proceedings) may be brought in such courts. The Issuers have in the Trust Deed irrevocably submitted to the jurisdiction of such courts. |
[Cp. No.] | [Denomination] | [ISIN] | [Series] | [Certif. No.] |
[Talon No.] | [ISIN] | [Series] | [Certif. No.] |
1. | In this Schedule: |
(a) | references to a meeting are to a meeting of Noteholders of one or more Series of Notes issued by the Relevant Issuer and include, unless the context otherwise requires, any adjournment; |
(b) | references to Notes and Noteholders are only to the Notes of the one or more Series in respect of which a meeting has been, or is to be, called, and to the holders of these Notes, respectively; |
(c) | agent means a holder of a voting certificate or a proxy for, or representative of, a Noteholder; |
(d) | block voting instruction means an instruction issued in accordance with paragraphs 8 to 14; |
(e) | Extraordinary Resolution means a resolution passed at a meeting duly convened and held in accordance with this Trust Deed by a majority of at least 75 per cent. of the votes cast; |
(f) | proxy has the meaning given to it in paragraph 9(f) below; |
(g) | required proportion means the proportion of the Notes shown by the table in paragraph 19 below; |
(h) | voting certificate means a certificate issued in accordance with paragraphs 5, 6, 7 and 14; and |
(i) | references to persons representing a proportion of the Notes are to Noteholders or agents holding or representing in the aggregate at least that proportion in nominal amount of the Notes for the time being outstanding. |
2. | A meeting shall, subject to the Conditions and without prejudice to any powers conferred on other persons by this Trust Deed, have power by Extraordinary Resolution: |
(a) | to approve proposals relating to reserved matters listed in Condition 13 (Meetings of Noteholders, Modifications, Waiver and Substitution); |
(b) | to sanction any proposal by the Relevant Issuer or the Note Trustee for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Noteholders and/or the Couponholders against the Relevant Issuer, whether or not those rights arise under this Trust Deed; |
(c) | to assent to any modification of this Trust Deed, the Notes, the Talons or the Coupons proposed by the Relevant Issuer or the Note Trustee; |
(d) | to authorise anyone (including the Note Trustee) to concur in and do anything necessary to carry out and give effect to an Extraordinary Resolution; |
(e) | to give any authority, direction or sanction required to be given by Extraordinary Resolution; |
(f) | to appoint any persons (whether Noteholders or not) as a committee or committees to represent the Noteholders' interests and to confer on them any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution; |
(g) | to approve a proposed new Note Trustee and to remove a Note Trustee; |
(h) | (other than as permitted under Clause 15.2 of this Trust Deed) to approve the substitution of any entity for the Relevant Issuer (or any previous substitute) as principal debtor under this Trust Deed; and |
(i) | to discharge or exonerate the Note Trustee from any liability in respect of any act or omission for which it may become responsible under this Trust Deed, the Notes, the Talons or the Coupons, |
3. | The Relevant Issuer or the Note Trustee may at any time convene a meeting. If it receives a written request by Noteholders holding at least 10 per cent. in nominal amount of the Notes of any Series for the time being outstanding and is indemnified and/or secured and/or pre-funded to its satisfaction against all costs and expenses, the Note Trustee shall convene a meeting of the Noteholders of that Series. Every meeting shall be held on a date and at a time and place approved by the Note Trustee. |
4. | At least 21 days' notice (exclusive of the day on which the notice is given and of the day of the meeting) shall be given to the Noteholders and the Paying Agents in relation to the Bearer Notes and the Registrar in relation to the Registered Notes (with a copy to the Relevant Issuer). A copy of the notice shall be given by the party convening the meeting to the other parties. The notice shall specify the day, time and the place of meeting and, unless the Note Trustee otherwise agrees, the nature of the resolutions to be proposed and shall explain how Noteholders may appoint proxies or representatives, obtain voting certificates and use block voting instructions and the details of the time limits applicable. |
5. | If a holder of a Bearer Note wishes to obtain a voting certificate in respect of it for a meeting, he must deposit it for that purpose at least 48 hours before the time fixed for the meeting with a Paying Agent or to the order of a Paying Agent with a bank or other depositary nominated by the Paying Agent for the purpose. The Paying Agent shall then issue a voting certificate in respect of it. |
6. | A voting certificate shall: |
(a) | be a document in the English language |
(b) | be dated |
(c) | specify the meeting concerned and the serial numbers of the Notes deposited and |
(d) | entitle, and state that it entitles, its bearer to attend and vote at that meeting in respect of those Notes. |
7. | Once a Paying Agent has issued a voting certificate for a meeting in respect of a Note, it shall not release the Note until either: |
(a) | the meeting has been concluded or |
(b) | the voting certificate has been surrendered to the Paying Agent. |
8. | If a holder of a Bearer Note wishes the votes attributable to it to be included in a block voting instruction for a meeting, then, at least 48 hours before the time fixed for the meeting, (i) he must deposit the Note for that purpose with a Paying Agent or to the order of a Paying Agent with a bank or other depositary nominated by the Paying Agent for the purpose and (ii) he or a duly authorised person on his behalf must direct the Paying Agent how those votes are to be cast. The Paying Agent shall issue a block voting instruction in respect of the votes attributable to all Notes so deposited. |
9. | A block voting instruction shall: |
(a) | be a document in the English language |
(b) | be dated |
(c) | specify the meeting concerned |
(d) | list the total number and serial numbers of the Notes deposited, distinguishing with regard to each resolution between those voting for and those voting against it |
(e) | certify that such list is in accordance with Notes deposited and directions received as provided in paragraphs 8, 11 and 14 and |
(f) | appoint a named person (a "proxy") to vote at that meeting in respect of those Notes and in accordance with that list. |
10. | Once a Paying Agent has issued a block voting instruction for a meeting in respect of the votes attributable to any Notes: |
(a) | it shall not release the Notes, except as provided in paragraph 11, until the meeting has been concluded and |
(b) | the directions to which it gives effect may not be revoked or altered during the 48 hours before the time fixed for the meeting. |
11. | If the receipt for a Note deposited with a Paying Agent in accordance with paragraph 8 is surrendered to the Paying Agent at least 48 hours before the time fixed for the meeting, the Paying Agent shall release the Note and exclude the votes attributable to it from the block voting instruction. |
12. | Each block voting instruction shall be deposited at least 24 hours before the time fixed for the meeting at such place as the Note Trustee shall designate or approve, and in default it shall not be valid unless the chairman of the meeting decides otherwise before the meeting proceeds to business. If the Note Trustee requires, a notarially certified copy of each block voting instruction shall be produced by the proxy at the meeting but the Note Trustee need not investigate or be concerned with the validity of the proxy's appointment. |
13. | A vote cast in accordance with a block voting instruction shall be valid even if it or any of the Noteholders' instructions pursuant to which it was executed has previously been revoked or amended, unless written intimation of such revocation or amendment is received from the relevant Paying Agent by the Relevant Issuer or the Note Trustee at its registered office or by the chairman of the meeting in each case at least 24 hours before the time fixed for the meeting. |
14. | No Note may be deposited with or to the order of a Paying Agent at the same time for the purposes of both paragraph 5 and paragraph 8 for the same meeting. |
(a) | A holder of a Registered Note may, by an instrument in writing in the form available from the specified office of a Transfer Agent in the English language executed by or on behalf of the holder and delivered to the Transfer Agent at least 48 hours before the time fixed for a meeting, appoint any person (a proxy) to act on his behalf in connection with that meeting. A proxy need not be a Noteholder. |
(b) | A corporation which holds a Registered Note may by delivering to a Transfer Agent at least 24 hours before the time fixed for a meeting a certified copy of a resolution of its directors or other governing body (with, if it is not in English, a certified translation into English) authorise any person to act as its representative (a "representative") in connection with that meeting. |
16. | The chairman of a meeting shall be such person as the Note Trustee may nominate in writing, but if no such nomination is made or if the person nominated is not present within 15 minutes after the time fixed for the meeting the Noteholders or agents present shall choose one of their number to be chairman, failing which the Relevant Issuer may appoint a chairman. The chairman need not be a Noteholder or agent. The chairman of an adjourned meeting need not be the same person as the chairman of the original meeting. |
17. | The following may attend and speak at a meeting: |
(a) | Noteholders and agents; |
(b) | the chairman; |
(c) | the Relevant Issuer and the Note Trustee (through their respective representatives) and their respective financial and legal advisers; |
(d) | the Dealers and their advisers; |
(e) | any other person approved by the meeting or the Note Trustee; and |
(f) | in relation to Registered Notes, the Registrar, or in relation to Bearer Notes, the Issuing and Paying Agent. |
18. | No business (except choosing a chairman) shall be transacted at a meeting unless a quorum is present at the commencement of business. If a quorum is not present within 15 minutes from the time initially fixed for the meeting, it shall, if convened on the requisition of Noteholders or if the Relevant Issuer and the Note Trustee agree, be dissolved. In any other case it shall be adjourned until such date, not less than 14 nor more than 42 days later, and time and place as the chairman may decide. If a quorum is not present within 15 minutes from the time fixed for a meeting so adjourned, the meeting shall be dissolved. |
19. | Two (or in the case of an adjourned meeting one) or more Noteholders or agents present in person shall be a quorum provided, however, that, so long as at least the required proportion of the aggregate principal amount of the outstanding Notes is represented by, in the case of Bearer Notes, the Global Notes or, in the case of Registered Notes, the Global Certificates or a single Certificate, in the context of Registered Notes, an agent appointed in relation thereto or a Noteholder of the Notes represented thereby shall be deemed to be two voters (or in the case of an adjourned meeting, one voter) for the purpose of forming a quorum: |
(a) | in the cases marked "No minimum proportion" in the table below, whatever the proportion of the Notes which they represent; and |
(b) | in any other case, only if they represent, in nominal amount of the affected Series of Notes for the time being outstanding, the proportion of the Notes shown by the table below. |
COLUMN 1 | COLUMN 2 | COLUMN 3 |
Purpose of meeting | Any meeting except one referred to in column 3 Required proportion | Meeting previously adjourned through want of a quorum Required proportion |
To pass a special quorum resolution | 75 per cent. | 25 per cent. |
To pass any other Extraordinary Resolution | One more than 50 per cent. | No minimum proportion |
Any other purpose | One more than 10 per cent. | No minimum proportion |
20. | The chairman may with the consent of (and shall if directed by) a meeting adjourn the meeting from time to time and from place to place. Only business which could have been transacted at the original meeting may be transacted at a meeting adjourned in accordance with this paragraph or paragraph 18. |
21. | At least ten days' notice of a meeting adjourned through want of a quorum shall be given in the same manner as for an original meeting and that notice shall state the quorum required at the adjourned meeting. No notice need, however, otherwise be given of an adjourned meeting. |
22. | Each question submitted to a meeting shall be decided by a show of hands unless a poll is (before, or on the declaration of the result of, the show of hands) demanded by the chairman, the Relevant Issuer, the Note Trustee or one or more persons holding one or more Notes or voting certificates representing 2 per cent. of the Notes. |
23. | Unless a poll is demanded a declaration by the chairman that a resolution has or has not been passed shall be conclusive evidence of the fact without proof of the number or proportion of the votes cast in favour of or against it. |
24. | If a poll is demanded, it shall be taken in such manner and (subject as provided below) either at once or after such adjournment as the chairman directs. The result of the poll shall be deemed to be the resolution of the meeting at which it was demanded as at the date it was taken. A demand for a poll shall not prevent the meeting continuing for the transaction of business other than the question on which it has been demanded. |
25. | A poll demanded on the election of a chairman or on a question of adjournment shall be taken at once. |
26. | On a show of hands every person who is present in person and who produces a Bearer Note, a Certificate of which he is the registered holder or a voting certificate or is a proxy or representative has one vote. On a poll every such person has one vote in respect of each integral currency unit of the Specified Currency of such Series of Notes so produced |
27. | In case of equality of votes the chairman shall both on a show of hands and on a poll have a casting vote in addition to any other votes which he may have. |
28. | An Extraordinary Resolution shall be binding on all the Noteholders, whether or not present at the meeting, and on all the Couponholders and each of them shall be bound to give effect to it accordingly. The passing of such a resolution shall be conclusive evidence that the circumstances justify its being passed. The Relevant Issuer shall give notice of the passing of an Extraordinary Resolution to Noteholders and, in relation to Bearer Notes, to the Paying Agents, and in relation to Registered Notes, to the Registrar within 14 days but failure to do so shall not invalidate the resolution. |
29. | Minutes shall be made of all resolutions and proceedings at every meeting and, if purporting to be signed by the chairman of that meeting or of the next succeeding meeting, shall be conclusive evidence of the matters in them. Unless and until the contrary is proved, every meeting for which minutes have been so made and signed shall be deemed to have been duly convened and held and all resolutions passed or proceedings transacted at it to have been duly passed and transacted. |
30. | A written resolution signed by the holders of not less than 75 per cent., in nominal amount of the Notes outstanding shall take effect as if it were an Extraordinary Resolution. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders. |
31. | Subject to all other provisions in this Trust Deed the Note Trustee may without the consent of the Noteholders prescribe such further regulations regarding the holding of meetings and attendance and voting at them as it in its sole discretion determines including (without limitation) such requirements as the Note Trustee thinks reasonable to satisfy itself that the persons who purport to make any requisition in accordance with this Trust Deed are entitled to do so and as to the form of voting certificates or block voting instructions so as to satisfy itself that persons who purport to attend or vote at a meeting are entitled to do so. |
32. | The foregoing provisions of this Schedule shall have effect subject to the following provisions: |
(a) | Meetings of Noteholders of separate Series will normally be held separately. However, the Note Trustee may from time to time determine that meetings of Noteholders of separate Series shall be held together |
(b) | A resolution that in the opinion of the Note Trustee affects one Series alone shall be deemed to have been duly passed if passed at a separate meeting of the Noteholders of the Series concerned |
(c) | A resolution that in the opinion of the Note Trustee affects the Noteholders of more than one Series but does not give rise to a conflict of interest between the Noteholders of the different Series concerned shall be deemed to have been duly passed if passed at a single meeting of the Noteholders of the relevant Series provided that for the purposes of determining the votes a Noteholder is entitled to cast pursuant to paragraph 26, each Noteholder shall have one vote in respect of each £1,000 nominal amount of Notes held, converted, if such Notes are not denominated in sterling, in accordance with Subclause 11.16 (Currency Conversion) |
(d) | A resolution that in the opinion of the Note Trustee affects the Noteholders of more than one Series and gives or may give rise to a conflict of interest between the Noteholders of the different Series concerned shall be deemed to have been duly passed only if it shall be duly passed at separate meetings of the Noteholders of the relevant Series |
(e) | To all such meetings as aforesaid all the preceding provisions of this Schedule shall mutatis mutandis apply as though references therein to Notes and to Noteholders were references to the Notes and Noteholders of the Series concerned. |
EXECUTED as a deed by WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC | ) ) | |
acting by | ) | |
and | ) | Director |
Director/Secretary |
EXECUTED as a deed by WESTERN POWER DISTRIBUTION (SOUTH WALES) PLC | ) ) | |
acting by | ) | |
and | ) | Director |
Director/Secretary |
EXECUTED as a deed by WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC | ) ) | |
acting by | ) | |
and | ) | Director |
Director/Secretary |
EXECUTED as a deed by WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC | ) ) | |
acting by | ) | |
and | ) | Director |
Director/Secretary |
Signature of witness | ||
Name of witness | ||
Address of witness | ||
Occupation of witness |
IFA = RPI m3+ | (Day of Calculation Date 1) (Days in month of Calculation Date) | (RPI m2 RPI m3) |
IFA = RPI m-3+ | (Day of Calculation Date 1) (Days in month of Calculation Date) | (RPI m-2 - RPI m-3) |
Conformed Copy | |||
Dated 4 April 2011 (as amended and restated on 29 July 2014 and as amended on 13 March 2018) | |||
WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC as the Company HSBC BANK PLC AND MIZUHO BANK, LTD. as Joint Coordinators ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED BARCLAYS BANK PLC HSBC BANK PLC LLOYDS BANK PLC MIZUHO BANK, LTD. ROYAL BANK OF CANADA THE ROYAL BANK OF SCOTLAND PLC as Bookrunners and Mandated Lead Arrangers and BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED as Facility Agent | |||
£300,000,000 MULTICURRENCY REVOLVING FACILITY AGREEMENT |
CONTENTS | |
Clause | Page |
1. | Interpretation | 3 |
2 | The Facility | 25 |
3. | Purpose | 28 |
4. | Conditions Precedent | 28 |
5. | Utilisation | 29 |
6. | Extension option | 30 |
7. | Optional Currencies | 31 |
8. | Ancillary Facilities | 32 |
9. | Repayment | 36 |
10. | Prepayment and Cancellation | 37 |
11. | Interest | 40 |
12. | Terms | 41 |
13. | Market Disruption | 42 |
14. | Tax gross-up and indemnities | 43 |
15. | Increased Costs | 51 |
16. | Mitigation | 52 |
17. | Payments | 54 |
18. | Representations | 57 |
19. | Information Covenants | 61 |
20. | Financial Covenants | 64 |
21. | General Covenants | 67 |
22. | Default | 74 |
23. | The Administrative Parties | 78 |
24. | Evidence and Calculations | 84 |
25. | Fees | 84 |
26. | Indemnities and Break Costs | 86 |
27. | Expenses | 87 |
28. | Amendments and Waivers | 87 |
29. | Changes to the Parties | 90 |
30. | Confidentiality and Disclosure of Information | 94 |
31. | Confidentiality of Funding Rates and Reference Bank Quotations | 97 |
32. | Set-off | 99 |
33. | Pro rata sharing | 99 |
34. | Severability | 101 |
35. | Counterparts | 101 |
36. | Notices | 101 |
37. | Language | 103 |
38. | Governing law | 103 |
39. | Enforcement | 103 |
Schedule 1 Original Parties | 104 | |
Schedule 2 Conditions Precedent Documents | 105 | |
Schedule 3 Requests | 106 | |
Schedule 4 Form of Transfer Certificate | 107 | |
Schedule 5 Form of Compliance Certificate | 110 |
Schedule 6 Form of Increase Confirmation | 111 | |
Schedule 7 Timetables | 114 | |
Schedule 8 Form of Subordination Deed | 115 |
(1) | WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC (registered number 03600574) (the "Company"); |
(2) | HSBC BANK PLC and MIZUHO BANK, LTD. as joint coordinators (the "Joint Coordinators"); |
(3) | ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS), BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED, BARCLAYS BANK PLC, HSBC BANK PLC, LLOYDS BANK PLC, MIZUHO BANK, LTD., ROYAL BANK OF CANADA and THE ROYAL BANK OF SCOTLAND PLC as bookrunners and mandated lead arrangers (the "Arrangers"); |
(4) | THE FINANCIAL INSTITUTIONS listed in Schedule 1 (Original Parties) as original lenders (the "Original Lenders"); and |
(5) | BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED as facility agent (the "Facility Agent"). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | an Effective Date Lender (as defined in the Amendment Agreement); |
(b) | a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor’s Rating Services or A- or higher by Fitch Ratings Ltd or A3 or higher by Moody’s Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or |
(c) | any other bank or financial institution approved by the Facility Agent (acting reasonably). |
(a) | the United States of America; |
(b) | the United Kingdom; or |
(c) | any other member state of the European Union or any Participating Member State where such country has long term sovereign credit rating of A- or higher by Standard & Poor's Rating Services or A3 or higher from Moody's Investor Services Limited or A- or higher from Fitch Ratings Ltd. |
(a) | the principal amount under each overdraft facility and on-demand short term loan facility (net of any Available Credit Balance); |
(b) | the face amount of each guarantee, bond and letter of credit under that Ancillary Facility; and |
(c) | the amount fairly representing the aggregate exposure (excluding interest and similar charges) of that Ancillary Lender under each other type of accommodation provided under that Ancillary Facility, |
(a) | the Base Currency Amount of its participation in any outstanding Loans and the Base Currency Amount of the aggregate of its (and its Affiliate's) Ancillary Commitments; and |
(b) | in relation to any proposed Loans, the Base Currency Amount of its participation in any Loans that are due to be made on or before the proposed Drawdown Date and the Base Currency Amount of its (and its Affiliate's) Ancillary Commitment in relation to any new Ancillary Facility that is due to be made available on or before the proposed Drawdown Date, |
(a) | in relation to a Loan, the amount specified in the Request delivered by the Company for that Loan (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before the Drawdown Date or, if later, on the date the Facility Agent receives the Request adjusted to reflect any repayment, prepayment, consolidation or division of the Loan, or as the case may be, cancellation or reduction of an Ancillary Facility; and |
(b) | in relation to an Ancillary Commitment, the amount specified as such in the notice delivered to the Facility Agent by the Company pursuant to Clause 8.2 (Availability) (or, if the amount specified is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before the Ancillary Commencement Date for that Ancillary Facility or, if later, the date the Facility Agent receives the notice of the Ancillary Commitment in accordance with the terms of this Agreement). |
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
(b) | the rules for global systematically important banks contained in "Global systematically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III". |
(a) | if on that day a payment in or a purchase of a currency (other than euro) is to be made, the principal financial centre of the country of that currency; or |
(b) | if on that day a payment in or purchase of euro is to be made, which is also a TARGET Day. |
(a) | in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading "Commitment" in Schedule 1 (Original Parties) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and |
(b) | in relation to any other Lender, the amount in the Base Currency of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase), |
(a) | any member of the Group or any of its advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers, |
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 30 (Confidentiality and disclosure of information); or |
(ii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
(iii) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that |
(a) | Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and |
(b) | Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC. |
(a) | purchases by way of assignment or transfer; |
(b) | enters into any sub-participation in respect of; or |
(c) | enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of, |
(a) | an Event of Default; or |
(b) | an event which would be (with the lapse of time, the expiry of a grace period, the giving of notice or the making of any determination under the Finance Documents or any combination of them) an Event of Default. |
(a) | which has failed to make its participation in a Loan available or has notified the Facility Agent that it will not make its participation in a Loan available by the Drawdown Date of that Loan in accordance with Clause 5.4 (Advance of Loan); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Finance Documents (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(a) | air (including, without limitation, air within natural or man-made structures, whether above or below ground); |
(b) | water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and |
(c) | land (including, without limitation, land under water). |
(a) | the pollution or protection of the Environment; |
(b) | the conditions of the workplace; or |
(c) | the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste. |
(a) | the applicable Screen Rate; |
(b) | (if no Screen Rate is available for the Term of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | if: |
(i) | no Screen Rate is available for the Term of that Loan; and |
(ii) | it is not possible to calculate an Interpolated Screen Rate for that Loan, |
(a) | on or before the date it becomes a Lender; or |
(b) | by not less than five Business Days' notice, |
(a) | sections 1471 to 1474 of the Code or any associated regulations or other official guidance; |
(b) | any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or |
(c) | any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction. |
(a) | in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; |
(b) | in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or |
(c) | in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, |
(a) | any letter entered into by reference to the Facility between one or more Administrative Parties and the Company setting out the amount of certain fees referred to in the Agreement; and |
(b) | any agreement setting out fees payable to a Finance Party referred to in Clause 25 (Fees) of this Agreement or under any other Finance Document. |
(a) | this Agreement; |
(b) | any Ancillary Document; |
(c) | a Fee Letter; |
(d) | a Transfer Certificate; or |
(e) | any other document designated as such by the Facility Agent and the Company. |
(a) | moneys borrowed; |
(b) | any acceptance credit; |
(c) | any bond, note, debenture, loan stock or other similar instrument; |
(d) | any redeemable preference share; |
(e) | any finance or capital lease; |
(f) | receivables sold or discounted (otherwise than on a non-recourse basis); |
(g) | the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset; |
(h) | any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, except for non-payment of an amount, the then mark to market value of the derivative transaction will be used to calculate its amount); |
(i) | any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing; |
(j) | any counter-indemnity obligation in respect of any guarantee, indemnity, bond, letter of credit or any other instrument issued by a bank or financial institution; or |
(k) | any guarantee, indemnity or similar assurance against financial loss of any person in respect of any item referred to in paragraphs (a) to (j) above. |
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; |
(b) | the Facility Agent otherwise rescinds or repudiates a Finance Document; |
(c) | (if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of "Defaulting Lender"; or |
(d) | an Insolvency Event has occurred and is continuing with respect to the Facility Agent; |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | an additional or increased cost; |
(b) | a reduction in the rate of return under a Finance Document or on a Finance Party's (or its Affiliate's) overall capital; or |
(c) | a reduction of an amount due and payable under any Finance Document, |
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation by it or such regulator, supervisor or similar official; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has a resolution passed for its winding up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(g) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; |
(h) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; |
(i) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or |
(j) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Term of that Loan; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Term of that Loan, |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; |
(c) | similar principles, rights and defences under the laws of any jurisdiction in which a member of the Group or a Holding Company of the Company is incorporated; and |
(d) | any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinion provided under Schedule 2 (Conditions Precedent Documents). |
(a) | an Original Lender; or |
(b) | any person which becomes a Lender after the date of this Agreement in accordance with Clause 2.2 (Increase) or Clause 29 (Changes to the Parties), |
(a) | the applicable Screen Rate; |
(b) | (if no Screen Rate is available for the Term of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | if: |
(i) | no Screen Rate is available for the currency of that Loan; or |
(ii) | no Screen Rate is available for the Term of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan, |
(a) | the electricity distribution licence made and treated as granted to the Company under Section 6(1)(c) of the Act pursuant to a licensing scheme made by the Secretary of State under Part II of Schedule 7 to the Utilities Act 2000 on 28 September, 2001; or |
(b) | any statutory amendment or replacement licence or licences granted pursuant to the Utilities Act 2000 which permit the Company to distribute electricity in the area it is certified to operate in. |
(a) | whose share in the outstanding Loans and whose undrawn Commitments then aggregate 662/3 per cent. or more of the aggregate of all the outstanding Loans and the undrawn Commitments of all the Lenders; |
(b) | if there are no Loans then outstanding, whose undrawn Commitments then aggregate 662/3 per cent. or more of the Total Commitments; or |
(c) | if there are no Loans then outstanding and the Total Commitments have been reduced to zero, whose Commitments aggregated 662/3 per cent. or more of the Total Commitments immediately before the reduction. |
(a) | at least one of Moody's Investor Services Limited ("Moody's") and Standard & Poor's Ratings Services ("Standard & Poor's") has provided a current rating in respect of the long-term, unsecured and non credit-enhanced debt obligations of the Company; and |
(b) | no Event of Default is outstanding, |
Rating (Moody's) | Rating (Standard & Poor's) | Margin (per annum) |
Less than Baa3 | Less than BBB- | 1.15% |
Baa3 | BBB- | 0.95% |
Baa2 | BBB | 0.85% |
Baa1 | BBB+ | 0.75% |
A3 or higher | A- or higher | 0.65% |
Rating (Moody's) | Rating (Standard & Poor's) | Margin (per annum) |
Less than Baa3 | Less than BBB- | 0.90% |
Baa3 | BBB- | 0.70% |
Baa2 | BBB | 0.55% |
Baa1 | BBB+ | 0.45% |
A3 or higher | A- or higher | 0.35% |
(a) | the business, assets or financial condition of the Group taken as a whole; |
(b) | the ability of the Company to perform its payment obligations under the Finance Documents or its obligations under Clauses 20.3 (Interest Cover) or 20.4 (Asset Cover) of this Agreement; or |
(c) | the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
(a) | the gross assets or gross revenues of a Subsidiary of the Company will be determined from its financial statements (consolidated if it has Subsidiaries) upon which the latest audited financial statements of the Group have been based; |
(b) | if a Subsidiary of the Company becomes a member of the Group after the date on which the latest audited financial statements of the Group have been prepared, the gross assets or gross revenues of that Subsidiary will be determined from its latest financial statements; |
(c) | the gross assets or gross revenues of the Group will be determined from the Company’s latest audited financial statements, adjusted (where appropriate) to reflect the gross assets or gross revenues of any company or business subsequently acquired or disposed of; and |
(d) | if a Material Subsidiary disposes of all or substantially all of its assets to another Subsidiary of the Company, it will immediately cease to be a Material Subsidiary and the other Subsidiary (if it is not already) will immediately become a Material Subsidiary; the subsequent financial statements of those Subsidiaries and the Group will be used to determine whether those Subsidiaries are Material Subsidiaries or not. |
(a) | in the case the consent, waiver or amendment in question requires the approval of all the Lenders, Lenders whose Commitments aggregate more than 85% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 85% of the Total Commitments prior to that reduction); or |
(b) | in the case the consent, waiver or amendment in question requires the approval of the Majority Lenders, Lenders whose Commitments aggregate more than 60% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 60% of the Total Commitments prior to that reduction), |
(a) | for the purpose of determining a Lender's share in a Loan, the proportion which its Available Commitment bears to the Available Facility immediately prior to making the Loan; and |
(b) | for any other purpose on a particular date: |
(i) | the proportion which its Commitment bears to the Total Commitments on that date; or |
(ii) | if the Total Commitments have been cancelled, the proportion which its Commitments bore to the Total Commitments immediately before being cancelled. |
(a) | (if the currency is Sterling) the first day of that period; |
(b) | (if the currency is euro) two TARGET Days before the first day of that period; or |
(c) | (for any other currency) two Business Days before the first day of that period, |
(a) | in relation to LIBOR, as the rate at which the relevant Reference Bank could borrow funds in the London interbank market; or |
(b) | in relation to EURIBOR, as the rate at which the relevant Reference Bank could borrow funds in the European interbank market, |
(a) | made or to be made on the same day that a maturing Loan is due to be repaid; |
(b) | the aggregate amount of which is equal to or less than the amount of the maturing Loan; |
(c) | in the same currency as the maturing Loan (unless it arose as a result of the operation of Clause 7.2 (Revocation of a currency); and |
(d) | made or to be made to the Company for the purpose of refinancing that maturing Loan. |
(a) | in relation to LIBOR, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate); and |
(b) | in relation to EURIBOR, the euro interbank offered rate administered by the Banking Federation of the European Union (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Reuters screen (or any replacement Reuters page which displays that rate), |
(a) | a subsidiary within the meaning of section 1159 of the Companies Act 2006; and |
(b) | unless the context otherwise requires, a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006. |
(a) | the proposed Transfer Date specified in the relevant Transfer Certificate; and |
(b) | the date on which the Facility Agent executes the relevant Transfer Certificate. |
(a) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112; and |
(b) | any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere. |
1.2 | Construction |
1.2.1 | The following definitions have the meanings given to them in Clause 20 (Financial Covenants): |
(a) | Cash; |
(b) | Cash Equivalent Investments; |
(c) | Consolidated EBITDA; |
(d) | Interest Payable; |
(e) | Measurement Period; |
(f) | Regulatory Asset Base; and |
(g) | Total Net Debt. |
1.2.2 | In this Agreement, unless the contrary intention appears, a reference to: |
(a) | an amendment includes a supplement, novation, restatement or re-enactment and amended will be construed accordingly; |
(b) | assets includes present and future properties, revenues and rights of every description; |
(c) | an authorisation includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation; |
(d) | disposal means a sale, transfer, grant, lease or other disposal, whether voluntary or involuntary, and dispose will be construed accordingly; |
(e) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money; |
(f) | know your customer requirements are the identification checks that a Finance Party requests in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer; |
(g) | a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, joint venture or consortium), government, state, agency, organisation or other entity whether or not having separate legal personality; |
(h) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; |
(i) | the winding-up of a person includes the administration, dissolution or liquidation or other like process of that person, any composition or arrangement with the creditors, amalgamation, reconstruction, reorganisation or consolidation pursuant to Part XXVI of the Companies Act 2006 proposed or carried out in respect of that person or a company voluntary arrangement pursuant to the Insolvency Act 1986 carried out or proposed in respect of that person; |
(j) | a currency is a reference to the lawful currency for the time being of the relevant country; |
(k) | save as set out in the definition of Margin in Clause 1.1 (Definitions), a Default (other than an Event of Default) being outstanding means that it has not been remedied or waived and an Event of Default being outstanding means that it has not been waived; |
(l) | a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation; |
(m) | a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Agreement; |
(n) | a person includes its successors in title, permitted assigns and permitted transferees; |
(o) | a Finance Document or another document is a reference to that Finance Document or other document as amended; and |
(p) | a time of day is a reference to London time. |
1.2.3 | Unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: |
(a) | if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is not); |
(b) | if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and |
(c) | notwithstanding sub-clause 1.2.3(a) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month in which it is to end, as appropriate. |
1.2.4 | Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999 and notwithstanding any term of any Finance Document, the consent of any third party is not required for any variation (including any release or compromise of any liability) or termination of that Finance Document. |
1.2.5 | Unless the contrary intention appears: |
(a) | a reference to a Party will not include that Party if it has ceased to be a Party under this Agreement; |
(b) | a word or expression used in any other Finance Document or in any notice given in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement; and |
(c) | any obligation of the Company under the Finance Documents which is not a payment obligation remains in force for so long as any payment obligation of the Company is or may be outstanding under the Finance Documents. |
1.2.6 | The headings in this Agreement do not affect its interpretation. |
1.2.7 | The Company providing cash cover for an Ancillary Facility means the Company paying an amount in the currency of the Ancillary Facility to an interest-bearing account in the name of the Company and the following conditions being met: |
(a) | the account is with the Ancillary Lender for which that cash cover is to be provided; |
(b) | until no amount is or may be outstanding under that Ancillary Facility, withdrawals from the account may only be made to pay the relevant Finance Party amounts due and payable to it under this Agreement in respect of that Ancillary Facility; and |
(c) | the Company has executed a security document over that account, in form and substance satisfactory to the Ancillary Lender with which that account is held, creating a first ranking security interest over that account. |
1.2.8 | The Company repaying or prepaying any Ancillary Outstandings means: |
(a) | the Company providing cash cover in respect of the Ancillary Outstandings; |
(b) | the maximum amount payable under the Ancillary Facility being reduced or cancelled in accordance with its terms; or |
(c) | the Ancillary Lender being satisfied (acting reasonably) that it has no further liability under that Ancillary Facility, |
1.2.9 | An amount borrowed includes any amount utilised under an Ancillary Facility. |
2. | THE FACILITY |
2.1 | The Facility |
2.1.1 | Subject to the terms of this Agreement, the Lenders make available to the Company a multicurrency revolving credit facility in an aggregate amount the Base Currency Amount of which is equal to the Total Commitments. |
2.1.2 | Subject to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make all or part of its Commitment available to the Company as an Ancillary Facility. |
2.2 | Increase |
2.2.1 | The Company may by giving prior notice to the Facility Agent by no later than the date falling 10 Business Days after the effective date of a cancellation of: |
(a) | the Available Commitments of a Defaulting Lender in accordance with sub-clause 10.6.4 of Clause 10.6 (Involuntary prepayment and cancellation); or |
(b) | the Commitments of a Lender in accordance with: |
(i) | Clause 10.1 (Mandatory prepayment – illegality); or |
(ii) | sub-clause 10.6.2 of Clause 10.6 (Involuntary prepayment and cancellation), |
(c) | the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an "Increase Lender") selected by the Company (each of which shall not be a member of the Group and which is further acceptable to the Facility Agent (acting reasonably)) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender; |
(d) | the Company and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Company and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(e) | each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(f) | the Commitments of the other Lenders shall continue in full force and effect; and |
(g) | any increase in the Total Commitments shall take effect on the date specified by the Company in the notice referred to above or any later date on which the conditions set out in sub-clause 2.2.2 below are satisfied. |
2.2.2 | An increase in the Total Commitments will only be effective on: |
(a) | the execution by the Facility Agent of an Increase Confirmation from the relevant Increase Lender; and |
(b) | in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase the performance by the Facility Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Facility Agent shall promptly notify to the Company and the Increase Lender. |
2.2.3 | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender |
2.2.4 | Unless the Facility Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Company shall, on the date upon which the increase takes effect, pay to the Facility Agent (for its own account) a fee of £1,750 and the Company shall promptly on demand pay the Facility Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.2. |
2.2.5 | The Company may pay to the Increase Lender a fee in the amount and at the times agreed between the Company and the Increase Lender in a letter between the Company and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph. |
2.2.6 | Clause 29.4 (Limitation of responsibility of Existing Lender) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: |
(a) | an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase; |
(b) | the "New Lender" were references to that "Increase Lender"; and |
(c) | a "re‑transfer" and "re-assignment" were references to respectively a "transfer" and "assignment"." |
2.2.7 | Each Party (other than the Increase Lender) irrevocably authorises the Facility Agent to execute any duly completed Increase Confirmation on its behalf. |
2.3 | Nature of a Finance Party's rights and obligations |
2.3.1 | the obligations of a Finance Party under the Finance Documents are several; |
2.3.2 | failure by a Finance Party to perform its obligations does not affect the obligations of any other Party under the Finance Documents; |
2.3.3 | no Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents; |
2.3.4 | the rights of a Finance Party under the Finance Documents are separate and independent rights; |
2.3.5 | a debt arising under the Finance Documents to a Finance Party is a separate and independent debt; and |
2.3.6 | a Finance Party may, except as otherwise stated in the Finance Documents, separately enforce those rights. |
3. | PURPOSE |
3.1 | Purpose |
3.2 | No obligation to monitor |
4. | CONDITIONS PRECEDENT |
4.1 | Conditions precedent documents |
4.2 | Further conditions precedent |
4.2.1 | the Repeating Representations are correct in all material respects; and |
4.2.2 | no Default or, in the case of a Rollover Loan, no Event of Default is outstanding or would result from the Loan. |
4.3 | Conditions relating to Optional Currencies |
4.3.1 | A currency will constitute an Optional Currency in relation to a Loan if: |
(a) | it is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market on the Quotation Day and the Drawdown Date for that Loan; and |
(b) | it is euros or U.S. Dollars or has been approved by the Facility Agent (acting on the instructions of all the Lenders) on or prior to receipt by the Facility Agent of the relevant Request for that Loan. |
4.3.2 | If the Facility Agent has received a written request from the Company for a currency to be approved under paragraph (b) of sub-clause 4.3.1 above, the Facility Agent will confirm to the Company by the Specified Time: |
(a) | whether or not the Lenders have granted their approval; and |
(b) | if approval has been granted, the minimum amount (and, if required, integral multiples) for any subsequent Loan in that currency. |
4.4 | Maximum number |
5. | UTILISATION |
5.1 | Giving of Requests |
5.1.1 | The Company may borrow a Loan by giving to the Facility Agent a duly completed Request not later than the Specified Time. |
5.1.2 | Each Request is irrevocable. |
5.2 | Completion of Requests |
5.2.1 | A Request for a Loan will not be regarded as having been duly completed unless: |
(a) | the Drawdown Date is a Business Day falling within the Availability Period; |
(b) | the currency and amount of the Loan comply with Clause 5.3 (Currency and amount); and |
(c) | the proposed Term complies with this Agreement. |
5.2.2 | Only one Loan may be requested in a Request. |
5.3 | Currency and amount |
5.3.1 | The currency specified in a Request must be either the Base Currency or an Optional Currency. |
5.3.2 | The amount of the proposed Loan must be: |
(a) | if the currency selected is the Base Currency, a minimum of £5,000,000 and an integral multiple of £1,000,000 or, if less, the Available Facility (or such other amount as the Facility Agent may agree); or |
(b) | if the currency selected is an Optional Currency, the minimum amount (and if required, integral multiple) specified by the Facility Agent pursuant to paragraph (b) of sub-clause 4.3.2 of Clause 4.3 (Conditions relating to Optional Currencies) or, if less, the Available Facility. |
5.4 | Advance of Loan |
5.4.1 | The Facility Agent must promptly notify each Lender of the details of the requested Loan and the amount of its share in that Loan. |
5.4.2 | If the conditions set out in this Agreement have been met, and subject to Clause 9.2 (Cashless Rollover), each Lender shall make its participation in each Loan available by no later than 2.00pm on the Drawdown Date through its Facility Office. |
5.4.3 | Save as set out in sub-clause 5.4.4 below, the amount of each Lender's share of the Loan will be its Pro Rata Share on the proposed Drawdown Date. |
5.4.4 | If a Loan is made to repay Ancillary Outstandings, each Lender's participation in that Loan will be in an amount (as determined by the Facility Agent) which will result as nearly as possible in the aggregate amount of its participation in the Loans then outstanding bearing the same proportion to the aggregate amount of the Loans then outstanding as its Commitment bears to the Total Commitments. |
5.4.5 | No Lender is obliged to participate in a Loan if as a result: |
(a) | the Base Currency Amount of its share in the aggregate amount of the Loans would exceed its Commitment; or |
(b) | the Base Currency Amount of the Loans would exceed the Total Commitments. |
5.4.6 | The Facility Agent shall determine the Base Currency Amount of each Loan which is to be made in an Optional Currency and shall notify each Lender of the amount, currency and the Base Currency Amount of each Loan, the amount of its participation in that Loan and, if different, the amount of that participation to be made available in accordance with Clause 17 (Payments), in each case by the Specified Time. |
6. | EXTENSION OPTION |
6.1 | The Company may by notice to the Facility Agent (the Initial Extension Request) not more than 60 days and not less than 30 days before the first anniversary of the date of the Amendment Agreement (the First Anniversary), request that the Final Maturity Date be extended for a further period of one year. |
6.2 | The Company may by notice to the Facility Agent (the Second Extension Request) no more than 60 days and not less than 30 days before the second anniversary of the date of the Amendment Agreement (the Second Anniversary), request that the Final Maturity Date: |
(a) | with respect to Lenders who have agreed to the Initial Extension Request, be extended for a further period of one year; and/or |
(b) | if no Initial Extension Request has been made, or with respect to Lenders who refused the Initial Extension Request: |
(i) | be extended for a period of one year; or |
(ii) | be extended for a period of two years, |
6.3 | The Facility Agent must promptly notify the Lenders of any Initial Extension Request or Second Extension Request (an Extension Request). |
6.4 | Each Lender may, in its sole discretion, agree to any Extension Request. Each Lender that agrees to an Extension Request by the date falling 15 days before, the relevant anniversary of the date of this Agreement, will extend its Commitment for a further period of one year or two |
6.5 | If any Lender fails to reply to an Extension Request on or before the date falling 15 days before the relevant anniversary of the date of this Agreement, it will be deemed to have refused that Extension Request and its Commitment will not be extended. |
6.6 | Subject to Clause 6.8 below, each Extension Request is irrevocable. |
6.7 | If one or more (but not all) of the Lenders agree to an Extension Request, then the Facility Agent must notify the Company and the Lenders which have agreed to the extension, identifying in that notification which Lenders have not agreed to the Extension Request. |
6.8 | The Company may, on the basis that one or more of the Lenders have not agreed to the Extension Request and no later than the date falling 5 days before the relevant anniversary of the date of this Agreement, withdraw the request by notice to the Facility Agent which will promptly notify the Lenders. |
7. | OPTIONAL CURRENCIES |
7.1 | Selection |
7.1.1 | The Company must select the currency of a Loan in its Request. The Company may select the Base Currency or an Optional Currency for a Loan. |
7.1.2 | Unless the Facility Agent otherwise agrees, the Loans may not be denominated at any one time in more than three currencies. |
7.2 | Revocation of currency |
7.2.1 | Notwithstanding any other term of this Agreement, if before the Specified Time on any Quotation Day the Facility Agent receives notice from a Lender that: |
(a) | the Optional Currency requested is not readily available to it in the relevant interbank market in the amount and for the period required; or |
(b) | participating in a Loan in the proposed Optional Currency might contravene any law or regulation applicable to it, |
7.2.2 | In this event: |
(a) | that Lender must participate in the Loan in the Base Currency (in an amount equal to that Lender's proportion of the Base Currency Amount or, in respect of a Rollover Loan, an amount equal to that Lender's proportion of the Base Currency Amount of the Rollover Loan that is due to be made); and |
(b) | the share of that Lender in the Loan and any other similarly affected Lender(s) will be treated as a separate Loan denominated in the Base Currency during that Term. |
7.2.3 | Any part of a Loan treated as a separate Loan under this sub-clause will not be taken into account for the purposes of any limit on the number of Loans or currencies outstanding at any one time. |
7.2.4 | A Loan will still be treated as a Rollover Loan if it is not denominated in the same currency as the maturing Loan by reason only of the operation of this sub-clause. |
7.3 | Optional Currency equivalents |
7.3.1 | whether any limit under this Agreement has been exceeded; |
7.3.2 | the amount of a Loan; |
7.3.3 | the share of a Lender in a Loan; |
7.3.4 | the amount of any repayment of a Loan; or |
7.3.5 | the undrawn amount of a Lender's Commitment, |
8. | ANCILLARY FACILITIES |
8.1 | Type of Facility |
8.1.1 | a multicurrency overdraft facility; |
8.1.2 | a multicurrency guarantee, bonding, documentary or stand-by letter of credit facility; |
8.1.3 | a short term multicurrency loan facility; |
8.1.4 | a derivatives facility; |
8.1.5 | a foreign exchange facility; or |
8.1.6 | any other multicurrency facility or accommodation required in connection with the business of the Group and which is agreed by the Company with an Ancillary Lender. |
8.2 | Availability |
8.2.1 | If the Company and a Lender agree and except as otherwise provided in this Agreement, the Lender may provide all or part of its Commitment as an Ancillary Facility. |
8.2.2 | An Ancillary Facility shall not be made available unless, not later than three Business Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Facility Agent has received from the Company: |
(a) | a notice in writing of the establishment of an Ancillary Facility and specifying: |
(i) | the proposed Ancillary Commencement Date and expiry date of the Ancillary Facility; |
(ii) | the proposed type of Ancillary Facility to be provided; |
(iii) | the proposed Ancillary Lender; |
(iv) | the proposed Ancillary Commitment, the maximum amount of the Ancillary Facility and, in the case of a Multi‑account Overdraft, its Designated Gross Amount and its Designated Net Amount; |
(v) | the proposed currency of the Ancillary Facility (if not denominated in the Base Currency); and |
(b) | any other information which the Facility Agent may reasonably request in connection with the Ancillary Facility. |
8.2.3 | The Facility Agent shall promptly notify the Ancillary Lender and the other Lenders of the establishment of an Ancillary Facility. |
8.2.4 | Subject to compliance with sub-clause 8.2.2 above: |
(a) | the Lender concerned will become an Ancillary Lender; and |
(b) | the Ancillary Facility will be available, |
8.3 | Terms of Ancillary Facilities |
8.3.1 | Except as provided below, the terms of any Ancillary Facility will be those agreed by the Ancillary Lender and the Company. |
8.3.2 | Those terms: |
(a) | must be based upon normal commercial terms at that time (except as varied by this Agreement); |
(b) | may only allow the Company to use the Ancillary Facility; |
(c) | may not allow the Ancillary Outstandings to exceed the Ancillary Commitment; |
(d) | may not allow the Ancillary Commitment of a Lender to exceed the Available Commitment of that Lender (before taking into account the effect of the Ancillary Facility on that Available Commitment); and |
(e) | must require that the Ancillary Commitment is reduced to nil, and that all Ancillary Outstandings are repaid not later than the Final Maturity Date (or such earlier date as the Commitment of the relevant Ancillary Lender (or its Affiliate) is reduced to zero). |
8.3.3 | If there is any inconsistency between any term of an Ancillary Facility and any term of this Agreement, this Agreement shall prevail except for (i) Clause 24.3 (Calculations) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Ancillary Facility; (ii) an Ancillary Facility comprising more than one account where the terms of the Ancillary Documents shall prevail to the extent required to permit the netting of balances on those accounts; and (iii) where the relevant term of this Agreement would be contrary to, or inconsistent with, the law governing the relevant Ancillary Document, in which case that term of this Agreement shall not prevail. |
8.3.4 | Interest, commission and fees on Ancillary Facilities are dealt with in Clause 25.6 (Interest, commission and fees on Ancillary Facilities). |
8.4 | Repayment of Ancillary Facility |
8.4.1 | An Ancillary Facility shall cease to be available on the Final Maturity Date or such earlier date on which its expiry date occurs or on which it is cancelled in accordance with the terms of this Agreement. |
8.4.2 | If an Ancillary Facility expires or is cancelled in accordance with its terms the Ancillary Commitment of the Ancillary Lender shall be reduced to zero. |
8.4.3 | No Ancillary Lender may demand repayment or prepayment of any Ancillary Outstandings prior to the expiry date of the relevant Ancillary Facility unless: |
(a) | required to reduce the Permitted Gross Outstandings of a Multi-account Overdraft to or towards an amount equal to its Designated Net Amount; |
(b) | the Total Commitments have been cancelled in full, or all outstanding Loans have become due and payable in accordance with the terms of this Agreement; |
(c) | it becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in its Ancillary Facility (or it becomes unlawful for any Affiliate of the Ancillary Lender for the Ancillary Lender to do so); or |
(d) | both: |
(i) | the Available Commitments; and |
(ii) | the notice of the demand given by the Ancillary Lender, |
8.4.4 | If a Loan is made to repay Ancillary Outstandings in full, the relevant Ancillary Commitment shall be reduced to zero. |
8.5 | Limitations on Ancillary Outstandings |
8.5.1 | the Ancillary Outstandings under any Ancillary Facility shall not exceed the Ancillary Commitment applicable to that Ancillary Facility; and |
8.5.2 | in relation to a Multi-account Overdraft: |
(a) | the Ancillary Outstandings shall not exceed the Designated Net Amount applicable to that Multi-account Overdraft; and |
(b) | the Gross Outstandings shall not exceed the Designated Gross Amount applicable to that Multi-account Overdraft. |
8.6 | Information |
8.7 | Affiliates of Lenders as Ancillary Lenders |
8.7.1 | Subject to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender. In such case, the Lender and its Affiliate shall be treated as a single Lender whose Commitment is the amount set out opposite the relevant Lender's name in Schedule 1 (Original Parties) and/or the amount of any Commitment transferred to or assumed by that Lender under this Agreement, to the extent (in each case) not cancelled, reduced or transferred by it under this Agreement. |
8.7.2 | The Company shall specify any relevant Affiliate of a Lender in any notice delivered by the Company to the Facility Agent pursuant to paragraph 8.2.2(a) of Clause 8.2 (Availability). |
8.7.3 | If a Lender assigns all of its rights and benefits or transfers all of its rights and obligations to a New Lender, its Affiliate shall cease to have any obligations under this Agreement or any Ancillary Document. |
8.7.4 | Where this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that document, the relevant Lender shall ensure that the obligation is performed by its Affiliate. |
8.8 | Commitment amounts |
8.9 | Amendments and Waivers – Ancillary Facilities |
9. | REPAYMENT |
9.1 | Repayment of Loans |
9.1.1 | The Company must repay each Loan in full on its Maturity Date. No Loan may be outstanding after the Final Maturity Date. |
9.1.2 | Subject to the other terms of this Agreement, any amounts repaid under sub-clause 9.1.1 above may be re-borrowed. |
9.2 | Cashless Rollover |
9.2.1 | Without prejudice to the Company's obligation under Clause 9.1 above, if one or more Loans are to be made available to the Company: |
(a) | on the same day that a maturing Loan is due to be repaid by the Company; |
(b) | in the same currency as the maturing Loan (unless it arose as a result of the operation of Clause 7.2 (Revocation of currency); and |
(c) | in whole or in part for the purpose of refinancing the maturing Loan, |
(i) | if the amount of the maturing Loan exceeds the aggregate amount of the new Loans: |
(A) | the Company will only be required to pay an amount in cash in the relevant currency equal to that excess; and |
(B) | each Lender's participation (if any) in the new Loans shall be treated as having been made available and applied by the Company in or towards repayment of that Lender's participation (if any) in the maturing Loan and that Lender will not be required to make its participation in the new Loans available in cash; and |
(ii) | if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans: |
(A) | the Company will not be required to make any payment in cash; and |
(B) | each Lender will be required to make its participation in the new Loans available in cash only to the extent that its participation (if any) in the new Loans exceeds that Lender's participation (if any) in the maturing Loan and the remainder of that Lender's participation in the new Loans shall be treated as having been |
10. | PREPAYMENT AND CANCELLATION |
10.1 | Mandatory prepayment - illegality |
10.1.1 | A Lender must notify the Company promptly if it becomes aware that it is unlawful in any jurisdiction for that Lender to perform any of its obligations under a Finance Document or to fund or maintain its share in any Loan. |
10.1.2 | After notification under clause 10.1.1 above: |
(a) | the Company must repay or prepay the share of that Lender in each Loan made to it on the date specified in clause 10.1.3 below; and |
(b) | the Commitments of that Lender will be immediately cancelled. |
10.1.3 | The date for repayment or prepayment of a Lender's share in a Loan will be: |
(a) | the Business Day following receipt by the Company of notice from the Lender under sub-clause 10.1.1 above; or |
(b) | if later, the latest date allowed by the relevant law. |
10.2 | Mandatory prepayment - change of control |
10.2.1 | within five days of such date, the Company shall give notice of such change of control to the Facility Agent; |
10.2.2 | the Lenders and the Company shall immediately enter into negotiations for a period of not more than 45 days from the date of the change of control with a view to agreeing whether the Facility shall continue to be made available and on what terms; |
10.2.3 | if no such agreement is reached within the said period of 45 days then: |
(a) | any Lender may on 10 days' notice to the Facility Agent and to the Company require the repayment of its share in each Loan and the repayment of its Ancillary Outstandings and cancel its Commitment; and |
(b) | the Majority Lenders may on 10 days' notice to the Company require repayment in full of all outstanding Loans and Ancillary Outstandings and cancel the Total Commitments; and |
10.2.4 | a Lender shall not be obliged to fund any further loans under the Facility (except for a Rollover Loan) during the negotiation period set out in sub-clause 10.2.2, and if no agreement is reached within such negotiation period, during the 10 day notice period set out in sub-clause 10.2.3. |
10.3 | Voluntary prepayment |
10.3.1 | The Company may, by giving not less than five Business Days' prior written notice to the Facility Agent, prepay any Loan at any time in whole or in part. |
10.3.2 | A prepayment of part of a Loan drawn in US Dollars must be in a minimum amount of $5,000,000 and an integral multiple of U.S. $1,000,000. |
10.3.3 | A prepayment of part of a Loan drawn in Sterling must be in a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
10.3.4 | A prepayment of part of a Loan drawn in euros must be in a minimum amount of €5,000,000 and an integral multiple of €1,000,000. |
10.4 | Automatic cancellation |
10.5 | Voluntary cancellation |
10.5.1 | The Company may, by giving not less than three Business Days' prior written notice to the Facility Agent, cancel the unutilised amount of the Total Commitments in whole or in part. |
10.5.2 | Partial cancellation of the Total Commitments must be in a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
10.5.3 | Any cancellation in part shall be applied against the Commitment of each Lender pro rata. |
10.6 | Involuntary prepayment and cancellation |
10.6.1 | If the Company is, or will be, required to pay to a Lender a Tax Payment or an Increased Cost, the Company may, while the requirement continues, give notice to the Facility Agent requesting prepayment and cancellation in respect of that Lender. |
10.6.2 | After notification under sub-clause 10.6.1 above: |
(a) | the Company must repay or prepay that Lender's share in each Loan made to it on the date specified in sub-clause 10.6.3 below; and |
(b) | the Commitments of that Lender will be immediately cancelled. |
10.6.3 | The date for repayment or prepayment of a Lender's share in a Loan will be the last day of the current Term for that Loan or, if earlier, the date specified by the Company in its notification. |
10.6.4 |
(a) | If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent 5 Business Days' notice of cancellation of the Available Commitment of that Lender. |
(b) | On the notice referred to in paragraph (a) above becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero. |
(c) | The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders. |
10.7 | Re-borrowing of Loans |
10.8 | Miscellaneous provisions |
10.8.1 | Any notice of prepayment and/or cancellation under this Agreement is irrevocable and must specify the relevant date(s) and the affected Loans and Commitments. The Facility Agent must notify the Lenders promptly of receipt of any such notice. |
10.8.2 | All prepayments made under Clause 10.2 (Mandatory prepayment - change of control) shall be applied pro rata to each Lender's participation in such Loan. |
10.8.3 | All prepayments under this Agreement must be made with accrued interest on the amount prepaid. No premium or penalty is payable in respect of any prepayment except for Break Costs. |
10.8.4 | The Majority Lenders may agree a shorter notice period for a voluntary prepayment or a voluntary cancellation. |
10.8.5 | No prepayment or cancellation is allowed except in accordance with the express terms of this Agreement. |
10.8.6 | Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may subsequently be reinstated. |
11. | INTEREST |
11.1 | Calculation of interest |
11.1.1 | Margin; and |
11.1.2 | LIBOR or, in relation to any Loan in euro, EURIBOR. |
11.2 | Payment of interest |
11.3 | Interest on overdue amounts |
11.3.1 | If the Company fails to pay any amount payable by it under the Finance Documents, it must immediately on demand by the Facility Agent pay interest on the overdue amount from its due date up to the date of actual payment, both before, on and after judgment. |
11.3.2 | Interest on an overdue amount is payable at a rate determined by the Facility Agent to be one per cent. per annum above the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount. For this purpose, the Facility Agent may (acting reasonably): |
(a) | select successive Terms of any duration of up to three months; and |
(b) | determine the appropriate Quotation Day for that Term. |
11.3.3 | Notwithstanding sub-clause 11.3.2 above, if the overdue amount is a principal amount of a Loan and becomes due and payable prior to the last day of its current Term, then: |
(a) | the first Term for that overdue amount will be the unexpired portion of that Term; and |
(b) | the rate of interest on the overdue amount for that first Term will be one per cent. per annum above the rate then payable on that Loan. |
11.3.4 | Interest (if unpaid) on an overdue amount will be compounded with that overdue amount at the end of each of its Terms but will remain immediately due and payable. |
11.4 | Notification of rates of interest |
12. | TERMS |
12.1 | Selection |
12.1.1 | Each Loan has one Term only. |
12.1.2 | The Company must select the Term for a Loan in the relevant Request. |
12.1.3 | Subject to the following provisions of this Clause, each Term for a Loan will be one, two, three or six months or for a period of one to thirty days or any other period agreed between the Company and the Lenders. |
12.1.4 | The Company shall not use its right under paragraph 12.1.3 above to select for a Loan a Term of less than one month's duration more than six times in any calendar year. |
12.1.5 | A Term for a Loan shall start on the Drawdown Date for that Loan. |
12.2 | No overrunning the Final Maturity Date |
12.3 | Other adjustments |
12.3.1 | The Facility Agent and the Company may enter into such other arrangements as they may agree for the adjustment of Terms and the consolidation and/or splitting of Loans. |
12.3.2 | Subject to Clause 12.3.3 below, if two or more Terms end on the same date, those Loans will, unless the Company specifies to the contrary in the Request for the next Term, be consolidated into, and treated as, a single Loan on the last day of the Term. |
12.3.3 | Subject to Clause 4.4 (Maximum Number) and Clause 5.2 (Completion of Requests) if the Company requests in a Request that a Loan be divided into two or more Loans, that Loan will, on the last day of its Term, be so divided into the Base Currency Amounts specified in that Request, having an aggregate Base Currency Amount equal to the Base Currency Amount of the Loan immediately before its division. |
12.4 | Notification |
13. | MARKET DISRUPTION |
13.1 | Failure of a Reference Bank to supply a rate |
13.2 | Market disruption |
13.2.1 | In this Clause, each of the following events is a market disruption event: |
(a) | at or about noon on the Quotation Day for the relevant Term, LIBOR or if applicable EURIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR or, if applicable, EURIBOR for the relevant currency and Term; or |
(b) | before close of business in London on the Quotation Day for the relevant Term, the Facility Agent receives notification from a Lender or Lenders whose participations in the relevant Loan exceed 50% of that Loan that the cost to it |
13.2.2 | The Facility Agent must promptly notify the Company and the Lenders of a market disruption event. |
13.2.3 | After notification under sub-clause 13.2.1(a) above, the rate of interest on each Lender's share in the affected Loan for the relevant Term will be the aggregate of the applicable: |
(a) | Margin; and |
(b) | rate notified to the Facility Agent by that Lender as soon as practicable, and in any event before interest is due to be paid in respect of that Term, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its share in that Loan from whatever source it may reasonably select. |
13.3 | Alternative basis of interest or funding |
13.3.1 | If a market disruption event occurs and the Facility Agent or the Company so requires, the Company and the Facility Agent must enter into negotiations for a period of not more than 30 days with a view to agreeing an alternative basis for determining the rate of interest and/or funding for the affected Loan and any future Loan. |
13.3.2 | Any alternative basis agreed will be, with the prior consent of all the Lenders, binding on all the Parties. |
14. | TAX GROSS-UP AND INDEMNITIES |
14.1 | Definitions |
14.1.1 | In this Agreement: |
(a) | a Lender (other than a Lender within paragraph (b) below) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is: |
(i) | a Lender: |
(A) | which is a bank (as defined for the purpose of section 879 of ITA) making an advance under a Finance Document; or |
(B) | in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of ITA) at the time that that advance was made, |
(ii) | a Lender which is: |
(A) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(B) | a partnership each member of which is: |
(1) | a company so resident in the United Kingdom; or |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(C) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or |
(iii) | a Treaty Lender; or |
(b) | a Lender which is a building society (as defined for the purpose of section 880 of ITA) making an advance under a Finance Document. |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company. |
(a) | is treated as a resident of a Treaty State for the purposes of the Treaty; |
(b) | does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively connected; and |
(c) | meets all other conditions which must be met under the Treaty for residents of such Treaty State to obtain full exemption from tax on interest imposed by the United Kingdom, except that for this purpose it shall be assumed that the following are satisfied: |
(i) | any condition which relates (expressly or by implication) to the amounts or terms of any Loan or the Finance Documents or any condition which relates (expressly or by implication) to there not being a special relationship between the Company and the Finance Party or between them both and another person; and |
(ii) | any necessary procedural formality. |
14.1.2 | Unless a contrary indication appears, in this Clause 14 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination. |
14.2 | Tax gross-up |
14.2.1 | The Company shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
14.2.2 | The Company shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Company. |
14.2.3 | If a Tax Deduction is required by law to be made by the Company, the amount of the payment due from the Company shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
14.2.4 | A payment shall not be increased under sub-clause 14.2.3 above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due: |
(a) | the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or |
(b) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | an officer of HM Revenue & Customs has given (and not revoked) a direction (a "Direction") under section 931 of the ITA which relates to the payment and that Lender has received from the Company a certified copy of that Direction; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or |
(c) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | the relevant Lender has not given a Tax Confirmation to the Company; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Company on the basis that the Tax Confirmation would have enabled the Company to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of section 930 of the ITA; or |
(d) | the relevant Lender is a Treaty Lender and the Company making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under sub-clause 14.2.7 below. |
14.2.5 | If the Company is required to make a Tax Deduction, the Company shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
14.2.6 | Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Company making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment a statement under Section 975 of the ITA, or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. |
(a) | Subject to paragraph (b) below, a Treaty Lender and the Company which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Company to obtain authorisation to make that payment without a Tax Deduction. |
(b) | Nothing in paragraph (a) above shall require a Treaty Lender to: |
(i) | register under the HMRC DT Treaty Passport scheme; |
(ii) | apply the HMRC DT Treaty Passport scheme to any Loan if it has so registered; or |
(iii) | file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph 14.2.10 below or paragraph 14.6.1 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation) and the Company making that payment has not complied with its obligations under paragraph 14.2.11 below or paragraph 14.6.2 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation). |
14.2.8 | A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is entered into gives a Tax Confirmation to the Company by entering into this Agreement. |
14.2.9 | A UK Non-Bank Lender shall promptly notify the Company and the Facility Agent if there is any change in the position from that set out in the Tax Confirmation. |
14.2.10 | A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Company) by including its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1 (Original Parties). |
14.2.11 | Where a Lender includes the indication described in paragraph 14.2.10 above in Schedule 1 (Original Parties), the Company shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing provided that the Company shall not be liable in respect of any non-compliance with its obligations under this Clause 14.2.11 where such non-compliance is due to circumstances beyond the control of the Company (including, without limitation, any delay, failure or omission on the part of the relevant Lender or the Facility Agent to comply with any obligation owed to the Company, or to any inaccuracy in any information provided by the relevant Lender or the Facility Agent in connection with the DT Treaty Passport scheme). |
14.2.12 | Any Lender which has confirmed that it is entitled to use its DT Treaty Passport in accordance with Clause 14.2.10 or Clause 14.6.1 will reasonably promptly notify the Facility Agent and the Company if at any time it ceases to holds a passport under the HMRC DT Treaty Passport scheme or if it ceases to be able to use such passport as a Lender. |
14.2.13 | If a Lender has not included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with sub-clause 14.2.10 above or sub-clause 14.6.1 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation), the Company shall not file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment or its participation in any Loan. |
14.3 | Tax indemnity |
14.3.1 | Except as provided below, the Company must, within three Business Days of demand, indemnify a Finance Party against any loss or liability which that Finance Party (in its absolute discretion) determines will be or has been suffered (directly or indirectly) by that Finance Party for or on account of Tax in relation to a payment received or receivable (or any payment deemed to be received or receivable) under a Finance Document. |
14.3.2 | Sub-clause 14.3.1 above does not apply to any Tax assessed on a Finance Party under the laws of the jurisdiction in which: |
(a) | that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(b) | that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
14.3.3 | Sub-clause 14.3.1 above does not apply to any Tax assessed on a Finance Party to the extent the loss or liability: |
(a) | is compensated for by an increased payment under Clause 14.2 (Tax gross-up); |
(b) | would have been compensated for by an increased payment under Clause 14.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in Clause 14.2 (Tax gross-up) applied; or |
(c) | relates to a FATCA Deduction required to be made by a Party. |
14.3.4 | A Finance Party making, or intending to make, a claim under sub-clause 14.3.1 above must promptly notify the Company of the event which will give, or has given, rise to the claim. |
14.4 | Tax Credit |
14.5 | Lender Status Confirmation |
14.5.1 | not a Qualifying Lender; |
14.5.2 | a Qualifying Lender (other than a Treaty Lender); or |
14.5.3 | a Treaty Lender. |
14.6 | HMRC DT Treaty Passport scheme confirmation |
14.6.1 | A New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Company) in the Transfer Certificate or Increase Confirmation which it executes by including its scheme reference number and its jurisdiction of tax residence in that Transfer Certificate or Increase Confirmation. |
14.6.2 | Where a New Lender includes the indication described in sub-clause 14.6.1 above in the relevant Transfer Certificate or Increase Confirmation the Company shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the relevant Transfer Date and shall promptly provide the Lender with a copy of that filing. |
14.7 | Stamp taxes |
14.8 | VAT |
14.8.1 | All amounts set out, or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to sub-clause 14.8.2 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party). |
14.8.2 | If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Subject Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT. |
14.8.3 | Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. |
14.8.4 | Any reference in this Clause 14.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994). |
14.9 | FATCA Information |
14.9.1 | Subject to sub-clause 14.9.3 below, each Party shall, within ten Business Days of a reasonable request by another Party: |
(a) | confirm to that other Party whether it is: |
(i) | a FATCA Exempt Party; or |
(ii) | not a FATCA Exempt Party; and |
(b) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; |
(c) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of |
14.9.2 | If a Party confirms to another Party pursuant to paragraph (a) of sub-clause 14.9.1 above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
14.9.3 | Sub-clause 14.9.1 above shall not oblige any Finance Party to do anything, and paragraph (c) of sub-clause 14.91. above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(a) | any law or regulation; |
(b) | any fiduciary duty; or |
(c) | any duty of confidentiality. |
14.9.4 | If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a) or (b) of sub-clause 14.9.1 above (including, for the avoidance of doubt, where sub-clause 14.9.3 above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
14.10 | FATCA Deduction |
14.10.1 | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction, or otherwise compensate the recipient of the payment for that FATCA Deduction. |
14.10.2 | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Company, the Facility Agent and the other Finance Parties. |
15. | INCREASED COSTS |
15.1 | Increased Costs |
15.1.1 | the introduction of, or any change in, or any change in the interpretation or application of, any law or regulation; |
15.1.2 | compliance with any law or regulation made after the date of this Agreement provided that for the purposes of this Agreement and any other Finance Document, Dodd-Frank shall be deemed to be a law or regulation made after the date of this Agreement; or |
15.1.3 | the implementation or application of, or compliance with, Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV. |
15.2 | Exceptions |
15.2.1 | compensated for under another Clause or would have been but for an exception to that Clause; |
15.2.2 | a Tax on the overall net income of a Finance Party or any of its Affiliates; |
15.2.3 | attributable to a FATCA Deduction required to be made by a Party; |
15.2.4 | attributable to a Finance Party or its Affiliate wilfully failing to comply with any law or regulation; |
15.2.5 | attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates); or |
15.2.6 | not notified by the relevant Finance Party to the Facility Agent and the Company within three Months of that Finance Party becoming aware of such Increased Cost. |
15.3 | Claims |
16. | MITIGATION |
16.1 | Mitigation |
16.1.1 | Each Finance Party must, in consultation with the Company (other than upon the occurrence of an event referred to at paragraph (d) below where no such consultation is required), take all reasonable steps to mitigate any circumstances which arise and which result or would result in the Facility ceasing to be available or: |
(a) | any Tax Payment or Increased Cost being payable to that Finance Party; |
(b) | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
(c) | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; or |
(d) | the occurrence of any market disruption event, |
16.1.2 | A Finance Party is not obliged to take any step under this Clause 16 if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
16.1.3 | Each Finance Party must promptly notify the Company of any circumstances as described in paragraphs (a) to (d) of sub-clause 16.1.1 of this Clause 16.1. |
16.1.4 | The Company must indemnify each Finance Party for all costs and expenses reasonably incurred by it as a result of any step taken under this Clause 16.1. |
16.1.5 | This Clause does not in any way limit the obligations of the Company under the Finance Documents. |
16.2 | Substitution |
16.2.1 | any Tax Payment or Increased Cost being payable to that Finance Party; |
16.2.2 | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
16.2.3 | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; |
16.2.4 | the occurrence of any market disruption event; or |
16.2.5 | any Lender becoming a Non-Consenting Lender, |
16.2.6 | the Company shall have no right to replace the Facility Agent; |
16.2.7 | neither the Facility Agent nor such Finance Party shall have any obligation to the Company to find a Replacement Finance Party; |
16.2.8 | the transfer must take place no later than 14 days after the notice referred to above; |
16.2.9 | in no event shall such Finance Party be required to pay or surrender to the Replacement Finance Party any of the fees received by such Finance Party pursuant to the Finance Documents; and |
16.2.10 | the Finance Party shall only be obliged to transfer its rights and obligations pursuant to this Clause 16.2 once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Finance Party. |
16.3 | Conduct of business by a Finance Party |
16.3.1 | interfere with the right of any Finance Party to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit or oblige any Finance Party to investigate or claim any Tax Credit; or |
16.3.2 | oblige any Finance Party to disclose any information relating to its affairs (Tax or otherwise) or any computation in respect of Tax. |
17. | PAYMENTS |
17.1 | Place |
17.1.1 | in the principal financial centre of the country of the relevant currency; or |
17.1.2 | in the case of euro, in the principal financial centre of a Participating Member State or London, |
17.2 | Funds |
17.3 | Distribution |
17.3.1 | Each payment received by the Facility Agent under the Finance Documents for another Party must, except as provided below, be made available by the Facility Agent to that Party by payment (as soon as practicable after receipt) to its account with such office or bank: |
(a) | in the principal financial centre of the country of the relevant currency; or |
(b) | in the case of euro, in the principal financial centre of a Participating Member State or London, |
17.3.2 | The Facility Agent may apply any amount received by it for the Company in or towards payment (as soon as practicable after receipt) of any amount due from the Company under the Finance Documents or in or towards the purchase of any amount of any currency to be so applied. |
17.3.3 | Where a sum is paid to the Facility Agent under this Agreement for another Party, the Facility Agent is not obliged to pay that sum to that Party until it has established that it has actually received it. However, the Facility Agent may assume that the sum has been paid to it, and, in reliance on that assumption, make available to that Party a corresponding amount. If it transpires that the sum has not been received by the Facility Agent, that Party must immediately on demand by the Facility Agent refund any corresponding amount made available to it together with interest on that amount from the date of payment to the date of receipt by the Facility Agent at a rate calculated by the Facility Agent to reflect its cost of funds. |
17.4 | Currency of account |
17.4.1 | Unless a Finance Document specifies that payments under it are to be made in a different manner, the currency of each amount payable under the Finance Documents is determined under this Clause. |
17.4.2 | Interest is payable in the currency in which the relevant amount in respect of which it is payable is denominated. |
17.4.3 | A repayment or prepayment of any principal amount (or overdue amount) is payable in the currency in which that principal amount (or overdue amount) is denominated on its due date. |
17.4.4 | Amounts payable in respect of costs and expenses and Taxes are payable in the currency in which they are incurred. |
17.4.5 | Each other amount payable under the Finance Documents is payable in Sterling. |
17.4.6 | Any amount expressed to be payable in a currency other than Sterling shall be paid in that other currency. |
17.5 | No set-off or counterclaim |
17.6 | Business Days |
17.6.1 | If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment will instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not) or whatever day the Facility Agent determines is market practice. |
17.6.2 | During any extension of the due date for payment of any principal (or overdue amount) under this Agreement interest is payable on that principal (or overdue amount) at the rate payable on the original due date. |
17.7 | Impaired Agent |
17.7.1 | If, at any time, the Facility Agent becomes an Impaired Agent, the Company or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with Clause 17.1 (Place) may instead either pay that amount direct to the required recipient or pay that amount to an interest bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Company or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents. |
17.7.2 | All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements. |
17.7.3 | A Party which has made a payment in accordance with this Clause 17.7 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account. |
17.7.4 | Promptly upon the appointment of a successor Facility Agent in accordance with Clause 23.14 (Replacement of the Facility Agent), each Party which has made a payment to a trust account in accordance with this Clause 17.7 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Facility Agent for distribution in accordance with Clause 17.3 (Distribution). |
17.7.5 | For the purposes of this Clause 17.7 only, an Acceptable Bank shall include any bank or financial institution approved by the Facility Agent or, if the Facility Agent is an Impaired Agent, the Majority Lenders. |
17.8 | Partial payments |
17.8.1 | If any Administrative Party receives a payment insufficient to discharge all the amounts then due and payable by the Company under the Finance Documents, the Administrative Party must apply that payment towards the obligations of the Company under the Finance Documents in the following order: |
(a) | first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Administrative Parties under the Finance Documents; |
(b) | secondly, in or towards payment pro rata of any accrued interest or fee due but unpaid under this Agreement; |
(c) | thirdly, in or towards payment pro rata of any principal amount due but unpaid under this Agreement; and |
(d) | fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
17.8.2 | The Facility Agent must, if so directed by all the Lenders, vary the order set out in paragraphs (a) to (d) of sub-clause 17.8.1 of this Clause 17.8. |
17.8.3 | This Clause will override any appropriation made by the Company. |
17.9 | Timing of payments |
18. | REPRESENTATIONS |
18.1 | Representations |
18.2 | Status |
18.3 | Powers and authority |
18.4 | Legal validity |
18.5 | Non-conflict |
18.5.1 | any law or regulation applicable to it and violation of which has or is likely to have a Material Adverse Effect; or |
18.5.2 | its constitutional documents. |
18.6 | No default |
18.6.1 | No Event of Default is outstanding or might reasonably be expected to result from the making of any Loan. |
18.6.2 | No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which might have a Material Adverse Effect. |
18.7 | Authorisations |
18.7.1 | in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents; and |
18.7.2 | to make the Finance Documents admissible in evidence in England and Wales, |
18.8 | Financial statements |
18.8.1 | have been prepared in accordance with accounting principles and practices generally accepted in its jurisdiction of incorporation, consistently applied; and |
18.8.2 | fairly represent its consolidated financial condition as at the date to which they were drawn up, |
18.9 | No material adverse change |
18.10 | Litigation |
18.11 | Winding Up |
18.12 | Non-Violation of other Agreements: |
18.13 | Governing Law and Enforcement |
18.13.1 | The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation. |
18.13.2 | Any judgement obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation. |
18.14 | Deduction of Tax |
18.14.1 | a Qualifying Lender: |
(a) | falling within paragraph (a)(i) of the definition of Qualifying Lender; or |
(b) | except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (a)(ii) of the definition of Qualifying Lender; or |
(c) | falling within paragraph (b) of the definition of Qualifying Lender or; |
18.14.2 | a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488). |
18.15 | No filing or stamp taxes |
18.16 | No misleading information |
18.16.1 | any written factual information provided by any member of the Group or on its behalf was true and accurate in all material respects as at the date of the relevant report or document or as at the date (if any) at which it is stated to be given; |
18.16.2 | the financial projections provided have been prepared on the basis of recent historical information and on the basis of reasonable assumptions as at the date provided; and |
18.16.3 | no event or circumstance has occurred or arisen and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in such written information being untrue or misleading in any material respect. |
18.17 | Pari Passu ranking |
18.18 | Licence |
18.19 | Sanctions |
18.20 | Anti- Corruption |
18.21 | Times for making representations |
18.21.1 | The representations set out in this Clause are made by the Company on the date of this Agreement. |
18.21.2 | The Repeating Representations are deemed to be repeated by the Company on the date of each Request and the first day of each Term. |
18.21.3 | When a representation is repeated, it is applied to the circumstances existing at the time of repetition. |
19. | INFORMATION COVENANTS |
19.1 | Financial statements |
19.1.1 | The Company must supply to the Facility Agent (in sufficient copies for all the Lenders if the Facility Agent so requests): |
(a) | its audited consolidated financial statements for each of its financial years; and |
(b) | its interim consolidated financial statements for the first half-year of each of its financial years. |
19.1.2 | All financial statements must be supplied as soon as they are available and: |
(a) | in the case of the Company's audited consolidated financial statements, within 180 days; and |
(b) | in the case of the Company's interim financial statements, within 90 days, |
19.2 | Form of Financial Statement |
19.2.1 | the Company and the Facility Agent (on behalf of and after consultation with all the Lenders) shall, on the request of the Facility Agent or the Company, negotiate in good faith with a view to agreeing such amendments to the financial ratios and/or the definitions of the terms used in Clause 20 (Financial covenants) as are necessary to give the Lenders comparable protection to that contemplated at the date of this Agreement; |
19.2.2 | if amendments are agreed by the Company and the Majority Lenders within 25 days, those amendments shall take effect in accordance with the terms of that agreement; and |
19.2.3 | if such amendments are not so agreed within 25 days, the Company shall: |
(a) | within 30 days after the end of that 25 day period; and |
(b) | with all subsequent financial statements to be delivered to the Facility Agent under Clause 19.1, |
19.3 | Compliance Certificate |
19.3.1 | The Company must supply to the Facility Agent a Compliance Certificate with each set of its financial statements sent to the Facility Agent under this Agreement. |
19.3.2 | Each Compliance Certificate must be signed by two directors of the Company. |
19.4 | Information - miscellaneous |
19.4.1 | copies of all documents despatched by the Company to its creditors generally (or any class of them) in each case at the same time as they are despatched; |
19.4.2 | promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group and which might, if adversely determined, have a Material Adverse Effect; |
19.4.3 | promptly, details of the loss of the Licence or any communication from OFGEM or other government agency regarding any potential or threatened loss of the Licence; |
19.4.4 | promptly on receiving them, details of any modification of an Authorisation or other material regulatory notices from OFGEM or other government agency; |
19.4.5 | a copy of all material information relating to any matter which is reasonably likely to have a Material Adverse Effect which the Company supplies to, or receives from, any applicable regulatory body (including OFGEM) (at the same time as it is supplied to, or promptly following its receipt from, the applicable regulatory body); |
19.4.6 | written notice of the details of any proposed changes to the Licence as soon as reasonably practicable after becoming aware of the same (other than changes of a formal, minor or technical nature); |
19.4.7 | within 5 Business Days of receiving them, details of any change to the rating by Moody's or Standard & Poor's of the long-term, unsecured and non credit-enhanced debt obligations of the Company; |
19.4.8 | the Company shall deliver to the Facility Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the Company), actuarial reports in relation to all pension schemes mentioned in sub-clause 21.15.1 of Clause 21.15 (Pensions). This obligation shall apply to only those pension schemes (or groups of the Electricity Supply Pension Scheme) of which the Company is at that time a participating employer and to those reports which have been provided to the Company; |
19.4.9 | promptly on request, a list of the then current Material Subsidiaries; and |
19.4.10 | promptly on request, such further information regarding the financial condition, business and operations of the Group as any Finance Party through the Facility Agent may reasonably request. |
19.5 | Notification of Default |
19.5.1 | The Company must notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. |
19.5.2 | Promptly on request by the Facility Agent, the Company must supply to the Facility Agent a certificate signed by two of its directors on its behalf, certifying that no Default is outstanding or, if a Default is outstanding, specifying the Default and the steps, if any, being taken to remedy it. |
19.6 | Use of websites |
19.6.1 | Except as provided below, the Company may deliver any information under this Agreement to a Lender by posting it on to an electronic website if: |
(a) | the Facility Agent and the Lender agree; |
(b) | the Company and the Facility Agent designate an electronic website for this purpose; |
(c) | the Company notifies the Facility Agent of the address of and password for the website; and |
(d) | the information posted is in a format agreed between the Company and the Facility Agent. |
19.6.2 | Notwithstanding the above, the Company must supply to the Facility Agent in paper form a copy of any information posted on the website together with sufficient copies for: |
(a) | any Lender not agreeing to receive information via the website; and |
(b) | any other Lender within ten Business Days of request by that Lender. |
19.6.3 | The Company must promptly upon becoming aware of its occurrence, notify the Facility Agent if: |
(a) | the website cannot be accessed; |
(b) | the website or any information on the website is infected by any electronic virus or similar software; |
(c) | the password for the website is changed; or |
(d) | any information to be supplied under this Agreement is posted on the website or amended after being posted. |
19.7 | Know your customer requirements |
19.7.1 | If: |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(b) | any change in the status of the Company after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
20. | FINANCIAL COVENANTS |
20.1 | Definitions |
(a) | that cash is repayable: |
(i) | if that cash is deposited with a Lender, within 180 days after the relevant date of calculation; or |
(ii) | if that cash is deposited with any other lender or financial institution, within 45 days after the relevant date of calculation; |
(b) | repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition; |
(c) | there is no Security Interest over that cash other than Security Interests permitted under sub-clause 21.5.3(k) of Clause 21.5 (Negative pledge); and |
(d) | the cash is freely and (except as mentioned in paragraph (a) above) immediately available to be applied in repayment or prepayment of the Facility. |
(a) | certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank; |
(b) | any investment in marketable debt obligations issued or guaranteed by the government of an Acceptable Jurisdiction or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; |
(c) | commercial paper not convertible or exchangeable to any other security: |
(i) | for which a recognised trading market exists; |
(ii) | issued by an issuer incorporated in an Acceptable Jurisdiction; |
(iii) | which matures within one year after the relevant date of calculation; and |
(iv) | which has a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
(d) | sterling bills of exchange eligible for rediscount at the Bank of England (or their dematerialised equivalent) and accepted by an Acceptable Bank; |
(e) | any investment in money market funds which: |
(i) | have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited; |
(ii) | which invest substantially all their assets in securities of the types described in paragraphs (a) to (d) above; and |
(iii) | can be turned into cash on not more than 30 days' notice; or |
(f) | any other debt security approved by the Majority Lenders, |
(a) | adding back Interest Payable; |
(b) | taking no account of any exceptional or extraordinary item; |
(c) | excluding any amount attributable to minority interests; |
(d) | adding back depreciation and amortisation; and |
(e) | taking no account of any revaluation of an asset or any loss or gain over book value arising on the disposal of an asset (otherwise than in the ordinary course of trading) by a member of the Group during that Measurement Period. |
20.2 | Interpretation |
20.2.1 | Except as provided to the contrary in this Agreement, an accounting term used in this Clause is to be construed in accordance with the principles applied in connection with the Original Financial Statements. |
20.2.2 | Any amount in a currency other than the Base Currency is to be taken into account at its Base Currency equivalent calculated on the basis of: |
(a) | the Agent's Spot Rate of Exchange on the day the relevant amount falls to be calculated; or |
(b) | if the amount is to be calculated on the last day of a financial period of the Company, the relevant rates of exchange used by the Company in, or in connection with, its financial statements for that period. |
20.2.3 | No item must be credited or deducted more than once in any calculation under this Clause. |
20.3 | Interest cover |
20.4 | Asset Cover |
21. | GENERAL COVENANTS |
21.1 | General |
21.2 | Authorisations |
21.3 | Compliance with laws |
21.4 | Pari passu ranking |
21.5 | Negative pledge |
21.5.1 | Except as provided below, neither the Company nor any Material Subsidiary may create or allow to exist any Security Interest or Quasi-Security Interest on any of its assets. |
21.5.2 | Except as provided below, neither the Company nor any Material Subsidiary may: |
(a) | sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by the Company or any Material Subsidiary; |
(b) | sell, transfer or otherwise dispose of any of its receivables on recourse terms; |
(c) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
(d) | enter into any other preferential arrangement having a similar effect, |
21.5.3 | Sub-clauses 21.5.1 and 21.5.2 do not apply to: |
(a) | any lien arising by operation of law and in the ordinary course of trading; |
(b) | any netting or set-off arrangement entered into by the Company in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances (including a Multi-Account Overdraft) of members of the Group; |
(c) | any Security Interest or Quasi-Security Interest created under or in connection with or arising out of the Balancing and Settlement Code or any transactions or arrangements entered into in connection with the management of risks relating thereto; |
(d) | in respect of overdue amounts which have not been overdue for more than 30 days and/or are being contested in good faith, liens arising solely by operation of law or by order of a court or tribunal (or by an agreement of similar effect) and/or in the ordinary course of day to day business or operations; |
(e) | any Security Interest or Quasi-Security Interest arising out of title retention provisions in a supplier's standard conditions of supply of goods acquired in the ordinary course of business or operations; |
(f) | any Security Interest or Quasi-Security Interest created on any asset acquired after the date of this Agreement for the sole purpose of financing or re-financing that acquisition and securing a principal, capital or nominal amount not exceeding the cost of that acquisition, provided that the Security Interest or Quasi-Security Interest is removed or discharged within 6 months of the date of acquisition of such asset; |
(g) | any Security Interest or Quasi-Security Interest outstanding on or over any asset acquired after the date of this Agreement and in existence at the date of such acquisition, provided that the Security Interest or Quasi-Security Interest is removed or discharged within 6 months of the date of acquisition of such asset; |
(h) | any Security Interest or Quasi-Security Interest created or outstanding on or over any asset of any company which becomes a Material Subsidiary of the |
(i) | any Quasi-Security Interest arising as a result of a disposal which is a disposal permitted under sub-clause 21.6.2; |
(j) | any netting arrangements under any swap or other hedging transaction which is on standard market terms; |
(k) | any Security Interest or Quasi-Security Interest over bank accounts of the Company in favour of the account holding bank with whom it maintains a banking relationship in the ordinary course of trade and granted as part of that bank's standard terms and conditions; |
(l) | any Security Interest or Quasi-Security Interest created or outstanding with the prior approval of the Majority Lenders; and |
(m) | any Security Interest or Quasi-Security Interest created or outstanding on or over assets of the Company or any of its Material Subsidiaries provided that the aggregate outstanding principal or nominal amount secured by all Security Interests and Quasi-Security Interest created or outstanding under this exception on or over such assets shall not at any time exceed £25,000,000 or its equivalent. |
21.6 | Disposals |
21.6.1 | Except as provided below, no member of the Group may, either in a single transaction or in a series of transactions and whether related or not, dispose of all or any part of its assets (other than cash) where the higher of the market value and the net consideration receivable (when aggregated with the higher of the market value and the net consideration receivable from any previous disposal by members of the Group) exceeds £5,000,000 (or its equivalent) in total during the term of this Agreement. |
21.6.2 | Sub-clause 21.6.1 does not apply to: |
(a) | any disposal made in the ordinary course of day to day business or operations of the disposing entity (including, without limitation, disposals of subsidiaries or lines of business, provided that this shall not include a disposal of the core electricity distribution business); |
(b) | disposals on normal commercial terms of obsolete assets or assets no longer required for the purpose of the relevant Person's business or operations; |
(c) | any realisation of investments acquired, purchased or made by the temporary application of funds not immediately required in the relevant Person's business or operations; |
(d) | the exchange of assets for other assets of a similar or superior nature and value, or the sale of assets on normal commercial terms for cash which is payable in full on the completion of the sale and is to be, and is, applied in or towards the purchase of similar assets within 12 months of that disposal (or, if contractually committed to be used within 12 months, are actually used within 18 months of that disposal); |
(e) | the disposal of assets by one wholly-owned Subsidiary of the Company to another or (if the consideration for the disposal does not exceed a normal commercial consideration) to the Company by one of its Subsidiaries; |
(f) | disposals in connection with sale-and-leaseback or sale and repurchase transactions or any other form of "off balance sheet" financing, provided that the aggregate book value (in the books of the disposing party) of all assets the subject of all such disposals made during the period commencing on the date of this Agreement and ending on the date when no amount remains to be lent or remains payable under this Agreement shall not exceed £50,000,000; |
(g) | any disposal which the Majority Lenders shall have agreed shall not be taken into account; |
(h) | arising as a result of any Security Interest or Quasi-Security Interest permitted under sub-clause 21.5.3 above; |
(i) | the application or disposal of cash not otherwise prohibited under the Finance Documents; |
(j) | any disposal by a member of Group compulsorily required by law or regulation having the force of law or any order of any government entity made thereunder and having the force of law provided that and to the extent permitted by such law or regulation: |
(i) | such disposal is made for fair market value; and |
(ii) | such disposal does not have a Material Adverse Effect. |
21.7 | Environmental matters |
21.7.1 | The Company will and will ensure that its Material Subsidiaries will comply with all applicable Environmental Law and other regulations, orders or other law applicable to the conduct of the business of the supply or distribution of electricity, in each case, where failure to do so would have a Material Adverse Effect. |
21.7.2 | The Company will, promptly upon becoming aware of the same, inform the Facility Agent in writing of: |
(a) | any Environmental Claim against any member of the Group which is current, pending or threatened; and |
(b) | any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group, |
21.8 | Insurance |
21.9 | Merger |
21.10 | Change of business |
21.11 | Acquisitions |
21.11.1 | Except as provided below, neither the Company nor any Material Subsidiary may acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them). |
21.11.2 | Provided that no Event of Default is outstanding on the date of the acquisition or would occur as a result of the acquisition, sub-clause 21.11.1 does not apply to: |
(a) | an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group as permitted under sub-clause 21.6.2 of Clause 21.6 (Disposals) above; |
(b) | an acquisition where the consideration (including associated costs and expenses) for the acquisition (when aggregated with the consideration (including associated costs and expenses) for any other acquisition permitted under this paragraph) during the term of this Agreement does not exceed 2.5% of the sum of the issued share capital, share premium and consolidated reserves (including retained earnings) of the Company, as shown by its most recent audited consolidated financial statements; and |
(c) | any acquisition which the Majority Lenders shall have consented to in writing. |
21.12 | Prohibition on the Debt Purchase Transactions of the Group |
21.13 | Prohibition on Subsidiary Financial Indebtedness |
21.14 | Arm's length transactions |
21.15 | Pensions |
21.15.1 | The Company shall ensure that no action or omission is taken by any member of the Group in relation to a pension scheme which has or is reasonably likely to have a Material Adverse Effect (including, without limitation, the termination or commencement of winding-up proceedings of any such pension scheme). |
21.15.2 | Except for in respect of the Electricity Supply Pension Scheme (and in particular the E.On Group, Networks Group and in the case of merger, the WPD Group), the Company shall ensure that no member of the Group is an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993) or "connected" with or an "associate" of (as those terms are used in sections 38 or 43 of the Pensions Act 2004) such an employer. |
21.15.3 | The Company shall promptly notify the Facility Agent of any material change in the rate of contributions payable to any of the pension schemes mentioned in sub-clause 21.15.2 above paid or required (by law or otherwise). |
21.15.4 | The Company shall immediately notify the Facility Agent of any investigation or proposed investigation by the Pensions Regulator which may lead to the issue of a Financial Support Direction or a Contribution Notice to any member of the Group. |
21.15.5 | The Company shall immediately notify the Facility Agent if it receives a Financial Support Direction or a Contribution Notice from the Pensions Regulator. |
21.16 | Licence |
21.16.1 | comply with the terms of the Licence in all material respects; |
21.16.2 | without prejudice to the generality of sub-clause 21.16.1 above, comply with the ring fencing provisions of the Licence in all respects; and |
21.16.3 | not take any action or make any omission which is reasonably likely to result in the revocation or termination of the Licence. |
21.17 | Investment Grade Rating |
21.18 | Sanctions |
21.18.1 | Neither the Company, nor any other member of the Group, shall be the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (the "OFAC"), the United Nations Security Council (the "UNSC"), the European Union, Her Majesty’s Treasury (the "HMT"), or other relevant sanctions authority (collectively, "Sanctions"), and no member of the Group shall be located, organized or resident in a country or territory that is the subject of country-wide or territory-wide Sanctions. |
21.18.2 | The Company undertakes that no member of the Group will, directly or indirectly, use the proceeds of the transaction, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity (the "Person"), to fund any activities of or business with any Person, or in Syria, Cuba, Iran, North Korea, Sudan or in any other country or territory, that, at the time of such funding, is the subject of country-wide or territory-wide Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. |
21.18.3 | The Company shall ensure that the source of any funds for discharging its obligations under this Agreement is not obtained from any designated target of any Sanctions or any of Syria, Cuba, Iran, North Korea, Sudan or any other country or territory, that, at the time of such payment, is the subject of country-wide or territory-wide Sanctions. |
21.19 | Anti-Corruption |
21.19.1 | The Company shall not (and shall ensure that no other member of the Group will) use the proceeds, or cause or permit the proceeds of any Loan to be used, directly or indirectly, in any way that would be in breach of applicable anti‑corruption laws. |
21.19.2 | The Company shall (and shall ensure that each other member of the Group will): |
(a) | conduct its businesses in compliance with applicable anti-corruption laws; and |
(b) | maintain policies and procedures designed to promote and achieve compliance with such laws. |
22. | DEFAULT |
22.1 | Events of Default |
22.2 | Non-payment |
(a) | administrative or technical error; or |
(b) | a Disruption Event, |
22.3 | Breach of other obligations |
22.3.1 | The Company does not perform or comply with its obligations under Clause 20 (Financial Covenants), Clause 21.5 (Negative pledge), Clause 21.6 (Disposals) or Clause 21.11 (Acquisitions). |
22.3.2 | The Company does not perform or comply with any of its other obligations under any Finance Document in any material respect or any representation or warranty by the Company in this Agreement or in any document delivered under it is or proves to have been incorrect when made or deemed repeated, unless the non‑compliance or circumstances giving rise to the misrepresentation, as the case may be, is capable of remedy and is not remedied within 20 Business Days of the earlier of the Facility Agent giving notice requiring the same to be remedied and the Company becoming aware of such non‑compliance or misrepresentation, as the case may be. |
22.4 | Cross-default |
22.4.1 | Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period. |
22.4.2 | Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). |
22.4.3 | Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of that member of the Group as a result of an event of default (however described). |
22.4.4 | Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described). |
22.4.5 | No Event of Default will occur under this Clause 22.4 unless and until the aggregate amount of such Financial Indebtedness falling within sub-clauses 22.4.1 to 22.4.4 above is more than £20,000,000 or its equivalent in any other currency or currencies. |
22.5 | Insolvency |
22.5.1 | Any of the following occurs in respect of the Company: |
(a) | it is unable to pay its debts generally as they fall due or it is deemed by a court of competent jurisdiction to be insolvent; |
(b) | it suspends making payments on all or any class of its debts or publicly announces an intention to do so; |
(c) | by reason of actual or anticipated financial difficulties, it begins negotiations with all or any class of its creditors for the general rescheduling of its indebtedness; or |
(d) | a moratorium is declared in respect of any of its indebtedness. |
22.5.2 | If a moratorium occurs in respect of the Company, the ending of the moratorium will not remedy any Event of Default caused by the moratorium. |
22.6 | Insolvency proceedings |
22.6.1 | Except as provided below, any of the following occurs in respect of the Company: |
(a) | a suspension of payments, a moratorium of any indebtedness or a reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise); |
(b) | any person presents a petition for its winding-up, administration or dissolution; |
(c) | an order for its winding-up, administration or dissolution is made; |
(d) | any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; |
(e) | its directors or other officers request the appointment of a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer; |
(f) | enforcement of any Security over any of its assets; or |
(g) | any other analogous step or procedure is taken in any jurisdiction. |
22.6.2 | Sub-clause 22.6.1 does not apply to: |
(a) | a petition for winding-up presented by a creditor which is being actively contested in good faith and with due diligence and with a reasonable prospect of success; or |
(b) | a voluntary solvent winding-up, amalgamation, reconstruction or reorganisation or otherwise part of a solvent scheme of arrangement, in each case which is on terms approved by the Majority Lenders. |
22.7 | Creditors' process |
22.8 | Licence |
22.8.1 | notice is given to revoke or terminate the Licence unless such termination is being contested in good faith and such notice is revoked or cancelled within 14 days of notice being given; or |
22.8.2 | the Licence is revoked, |
22.9 | Balancing and Settlement Code |
22.9.1 | The Company ceases to be a party to the Balancing and Settlement Code Framework Agreement other than in circumstances where the Company is able to carry on its distribution business; or |
22.9.2 | the Company breaches the Balancing and Settlement Code and such breach has or is reasonably likely to have a Material Adverse Effect. |
22.10 | Unlawfulness and invalidity |
22.10.1 | It is or becomes unlawful for the Company to perform any of its obligations under the Finance Documents in any material respect. |
22.10.2 | Any obligation or obligations of the Company under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
22.11 | Cessation of business |
22.12 | Repudiation and rescission of agreements |
22.13 | Ownership of other Group companies |
(a) | which is engaged in the core electricity distribution business; or |
(b) | in respect of which it has any actual or contingent financial obligations other than as a result of a solvent liquidation or reorganisation so long as any payments or assets distributed as a result of such solvent liquidation or reorganisation are distributed to other members of the Group. |
22.14 | Material Adverse Effect |
22.15 | Acceleration |
22.15.1 | cancel the Total Commitments and/or Ancillary Commitments; and/or |
22.15.2 | declare that all or part of any amounts outstanding under the Finance Documents are: |
(a) | immediately due and payable; and/or |
(b) | payable on demand by the Facility Agent acting on the instructions of the Majority Lenders; and/or |
22.15.3 | declare that full cash cover in respect of all or part of the amounts outstanding under the Ancillary Facilities is immediately due and payable whereupon it shall become immediately due and payable or payable on demand at which time it shall become payable on demand by the Facility Agent on the instructions of the Majority Lenders. |
23. | THE ADMINISTRATIVE PARTIES |
23.1 | Appointment and duties of the Facility Agent |
23.1.1 | Each Finance Party (other than the Facility Agent) irrevocably appoints the Facility Agent to act as its agent under the Finance Documents. |
23.1.2 | Each Finance Party irrevocably authorises the Facility Agent to: |
(a) | perform the duties and to exercise the rights, powers and discretions that are specifically given to it under the Finance Documents, together with any other incidental rights, powers and discretions; and |
(b) | execute each Finance Document expressed to be executed by the Facility Agent. |
23.1.3 | The Facility Agent has only those duties which are expressly specified in the Finance Documents. Those duties are solely of a mechanical and administrative nature. |
23.1.4 | The Facility Agent shall provide to the Company within three Business Days of a request by the Company (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Facility Agent to that Lender under the Finance Documents. |
23.2 | Role of the Arrangers |
23.3 | No fiduciary duties |
23.4 | Individual position of an Administrative Party |
23.4.1 | If it is also a Lender, each Administrative Party has the same rights and powers under the Finance Documents as any other Lender and may exercise those rights and powers as though it were not an Administrative Party. |
23.4.2 | Each Administrative Party and each Ancillary Lender may: |
(a) | carry on any business with the Company or its related entities (including acting as an agent or a trustee for any other financing); and |
(b) | retain any profits or remuneration it receives under the Finance Documents or in relation to any other business it carries on with the Company or its related entities. |
23.5 | Reliance |
23.5.1 | rely on any notice or document believed by it to be genuine and correct and to have been signed by, or with the authority of, the proper person; |
23.5.2 | rely on any statement made by any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify; |
23.5.3 | engage, pay for and rely on professional advisers selected by it (including those representing a Party other than the Facility Agent); and |
23.5.4 | act under the Finance Documents through its personnel and agents. |
23.6 | Majority Lenders' instructions |
23.6.1 | The Facility Agent is fully protected if it acts on the instructions of the Majority Lenders in the exercise of any right, power or discretion or any matter not expressly provided for in the Finance Documents. Any such instructions given by the Majority Lenders will be binding on all the Lenders. In the absence of instructions, the Facility Agent may act as it considers to be in the best interests of all the Lenders. |
23.6.2 | The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings in connection with any Finance Document. |
23.6.3 | The Facility Agent may require the receipt of security satisfactory to it, whether by way of payment in advance or otherwise, against any liability or loss which it may incur in complying with the instructions of the Majority Lenders. |
23.7 | Responsibility |
23.7.1 | No Administrative Party and no Ancillary Lender is responsible to any other Finance Party for the adequacy, accuracy or completeness of: |
(a) | any Finance Document or any other document; or |
(b) | any statement or information (whether written or oral) made in or supplied in connection with any Finance Document. |
23.7.2 | Without affecting the responsibility of the Company for information supplied by it or on its behalf in connection with any Finance Document, each Lender and each Ancillary Lender confirms that it: |
(a) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Company and its related entities and the nature and extent of any recourse against any Party or its assets); and |
(b) | has not relied exclusively on any information provided to it by any Administrative Party in connection with any Finance Document. |
(a) | Nothing in this Agreement will oblige the Facility Agent to satisfy any know your customer requirement in relation to the identity of any person on behalf of any Finance Party. |
(b) | Each Finance Party confirms to the Facility Agent that it is solely responsible for any know your customer requirements it is required to carry out and that it |
23.8 | Exclusion of liability |
23.8.1 | Neither the Facility Agent nor any Ancillary Lender is liable or responsible to any other Finance Party for any action taken or not taken by it in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct. |
23.8.2 | The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent, if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose. |
23.8.3 | No Party (other than the Facility Agent or the Ancillary Lender) may take any proceedings against any officer, employee or agent of the Facility Agent or any Ancillary Lender in respect of any claim it might have against the Facility Agent or any Ancillary Lender or in respect of any act or omission of any kind by that officer, employee or agent in connection with any Finance Document. Any officer, employee or agent of the Facility Agent or any Ancillary Lender may rely on this sub-clause and enforce its terms under the Contracts (Rights of Third Parties) Act 1999. |
23.9 | Default |
23.9.1 | The Facility Agent is not obliged to monitor or enquire whether a Default has occurred. The Facility Agent is not deemed to have knowledge of the occurrence of a Default. |
23.9.2 | If the Facility Agent: |
(a) | receives notice from a Party referring to this Agreement, describing a Default and stating that the event is a Default; or |
(b) | is aware of the non-payment of any principal or interest or any fee payable to a Lender under this Agreement, |
23.10 | Information |
23.10.1 | The Facility Agent must promptly forward to the person concerned the original or a copy of any document which is delivered to the Facility Agent by a Party for that person. |
23.10.2 | Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
23.10.3 | Except as provided above, the Facility Agent has no duty: |
(a) | either initially or on a continuing basis to provide any Lender with any credit or other information concerning the risks arising under or in connection with the Finance Documents (including any information relating to the financial |
(b) | unless specifically requested to do so by a Lender in accordance with a Finance Document, to request any certificate or other document from the Company. |
23.10.4 | In acting as the Facility Agent, the agency division of the Facility Agent is treated as a separate entity from its other divisions and departments. Any information acquired by the Facility Agent which, in its opinion, is acquired by it otherwise than in its capacity as the Facility Agent may be treated as confidential by the Facility Agent and will not be treated as information possessed by the Facility Agent in its capacity as such. |
23.10.5 | The Facility Agent is not obliged to disclose to any person any confidential information supplied to it by a member of the Group solely for the purpose of evaluating whether any waiver or amendment is required to any term of the Finance Documents. |
23.10.6 | The Company irrevocably authorises the Facility Agent to disclose to the other Finance Parties any information which, in its opinion, is received by it in its capacity as the Facility Agent. |
23.10.7 | Without prejudice to the generality of the foregoing, the Facility Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Company and shall disclose the same upon the written request of the Company or the Majority Lenders. |
23.11 | Indemnities |
23.11.1 | Without limiting the liability of the Company under the Finance Documents, each Lender must indemnify the Facility Agent for that Lender's Pro Rata Share of any loss or liability incurred by the Facility Agent in acting as the Facility Agent, except to the extent that the loss or liability is caused by the Facility Agent's gross negligence or wilful misconduct or to the extent that the Facility Agent has been reimbursed in full by the Company for such loss or liability. |
23.11.2 | The Facility Agent may deduct from any amount received by it for a Lender any amount due to the Facility Agent from that Lender under a Finance Document but unpaid. |
23.11.3 | The Company must indemnify the Facility Agent against any loss or liability properly incurred by the Facility Agent as a result of: |
(a) | investigating any event which the Facility Agent reasonably believes to be a Default; or |
(b) | acting or relying on any notice which the Facility Agent reasonably believes to be genuine, correct and appropriately authorised. |
23.12 | Compliance |
23.13 | Resignation of the Facility Agent |
23.13.1 | The Facility Agent may resign and appoint any of its Affiliates as successor Facility Agent by giving notice to the Lenders and the Company. |
23.13.2 | Alternatively, the Facility Agent may resign by giving notice to the Lenders and the Company, in which case the Majority Lenders may appoint a successor Facility Agent. |
23.13.3 | If no successor Facility Agent has been appointed under sub-clause 23.13.2 above within 30 days after notice of resignation was given, the Facility Agent may appoint a successor Facility Agent. |
23.13.4 | The person(s) appointing a successor Facility Agent must, if practicable, consult with the Company prior to the appointment. Any successor Facility Agent must have an office in the U.K. |
23.13.5 | The resignation of the Facility Agent and the appointment of any successor Facility Agent will both become effective only when the successor Facility Agent notifies all the Parties that it accepts its appointment. On giving the notification, the successor Facility Agent will succeed to the position of the Facility Agent and the term "Facility Agent" will mean the successor Facility Agent. |
23.13.6 | The retiring Facility Agent must, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as the Facility Agent under the Finance Documents. |
23.13.7 | Upon its resignation becoming effective, this Clause will continue to benefit the retiring Facility Agent in respect of any action taken or not taken by it in connection with the Finance Documents while it was the Facility Agent, and, subject to sub-clause 23.13.6 above, it will have no further obligations under any Finance Document. |
23.14 | Replacement of the Facility Agent |
23.14.1 | After consultation with the Company, the Majority Lenders may, by giving 30 days' notice to the Facility Agent (or, at any time the Facility Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Facility Agent by appointing a successor Facility Agent (acting through an office in the United Kingdom). |
23.14.2 | The retiring Facility Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. |
23.14.3 | The replacement of the Facility Agent and the appointment of the successor Facility Agent shall take effect on the date specified in the notice from the Majority Lenders to |
23.14.4 | Any successor Facility Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
23.15 | Relationship with Lenders |
23.15.1 | Subject to Clause 29.9 (Pro rata interest settlement), the Facility Agent may treat each Lender as a Lender, entitled to payments under this Agreement and as acting through its Facility Office(s) until it has received not less than five Business Days' prior notice from that Lender to the contrary. |
23.15.2 | The Facility Agent may at any time, and must if requested to do so by the Majority Lenders, convene a meeting of the Lenders. |
23.15.3 | The Facility Agent must keep a register of all the Parties and supply any other Party with a copy of the register on request. The register will include each Lender's Facility Office(s) and contact details for the purposes of this Agreement. |
23.16 | Facility Agent's management time |
23.17 | Notice period |
23.18 | Subordination Deed |
24. | EVIDENCE AND CALCULATIONS |
24.1 | Accounts |
24.2 | Certificates and determinations |
24.3 | Calculations |
25. | FEES |
25.1 | Agency fee |
25.2 | Arrangement and participation fees |
25.3 | Co-ordination fee |
25.4 | Commitment fee |
25.4.1 | The Company must pay a commitment fee computed at the rate of 35 per cent. of the applicable Margin on the undrawn, uncancelled amount of each Lender's Commitment for the Availability Period calculated from the date of this Agreement. |
25.4.2 | The commitment fee is payable quarterly in arrears during the Availability Period and on the last day of the Availability Period. Accrued commitment fee is also payable to the Facility Agent for a Lender on the date its Commitment is cancelled in full. |
25.4.3 | No commitment fee is payable to the Facility Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender. |
25.5 | Utilisation fee |
25.5.1 | The Company must pay to the Facility Agent for each Lender a utilisation fee computed at the rate of 0.20 per cent. per annum on the aggregate principal amount of the Loans for each day on which the aggregate Base Currency Amount of all Loans exceeds 33.3 per cent. of the Total Commitments. |
25.5.2 | The Company must pay to the Facility Agent for each Lender a utilisation fee computed at the rate of 0.40 per cent. per annum on the aggregate principal amount of the Loans |
25.5.3 | Utilisation fee is payable on the amount of each Lender's share in the Loans. |
25.5.4 | Accrued utilisation fee is payable quarterly in arrears. Accrued utilisation fee is also payable to the Facility Agent for a Lender on the date its Commitment is cancelled in full. |
25.6 | Interest, commission and fees on Ancillary Facilities |
26. | INDEMNITIES AND BREAK COSTS |
26.1 | Currency indemnity |
26.1.1 | The Company must, as an independent obligation, indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of: |
(a) | that Finance Party receiving an amount in respect of the Company's liability under the Finance Documents; or |
(b) | that liability being converted into a claim, proof, judgment or order, |
26.1.2 | Unless otherwise required by law, the Company waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable. |
26.2 | Other indemnities |
26.2.1 | the occurrence of any Event of Default; |
26.2.2 | (other than by reason of negligence or default by a Finance Party) a Loan not being made after a Request has been delivered for that Loan; or |
26.2.3 | the receipt or recovery by any party (or the Facility Agent on its behalf) of all or any part of a Loan or overdue sum due from the Company otherwise than on the Final Maturity Date or Maturity Date of that Loan or, in the case of an overdue sum, the last |
26.3 | Break Costs |
26.3.1 | The Company must pay to each Lender its Break Costs within three Business Days of demand. |
26.3.2 | Break Costs are the amount (if any) determined by the relevant Lender by which: |
(a) | the interest (excluding Margin) which that Lender would have received for the period from the date of receipt of any part of its share in a Loan or overdue amount to the last day of the applicable Term for that Loan or overdue amount if the principal or overdue amount received had been paid on the last day of that Term; |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Term. |
26.3.3 | Each Lender must supply to the Facility Agent for the Company details of the amount of any Break Costs claimed by it under this Clause. |
27. | EXPENSES |
27.1 | Initial costs |
27.2 | Subsequent costs |
27.2.1 | the negotiation, preparation, printing and execution of any Finance Document (other than a Transfer Certificate or Increase Confirmation) executed after the date of this Agreement; and |
27.2.2 | any amendment, waiver or consent requested by or on behalf of the Company or specifically allowed by this Agreement. |
27.3 | Enforcement costs |
28. | AMENDMENTS AND WAIVERS |
28.1 | Procedure |
28.1.1 | Except as provided in this Clause 28, any term of the Finance Documents (other than the Fee Letters) may be amended or waived with the agreement of the Company and the Majority Lenders. The Facility Agent may effect, on behalf of any Finance Party, an amendment or waiver allowed under this Clause. |
28.1.2 | The Facility Agent must promptly notify the other Parties of any amendment or waiver effected by it under sub-clause 28.1.1 above. Any such amendment or waiver is binding on all the Parties. |
28.2 | Exceptions |
28.2.1 | An amendment or waiver which relates to: |
(a) | the definition of Majority Lenders in Clause 1.1 (Definitions); |
(b) | Clause 2.3 (Nature of a Finance Party's rights and obligations); |
(c) | an extension of the date of payment of any amount to a Lender under the Finance Documents; |
(d) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fee or other amount payable to a Lender under the Finance Documents; |
(e) | an increase in, or an extension of, a Commitment or the Total Commitments; |
(f) | a term of a Finance Document which expressly requires the consent of each Lender; |
(g) | the right of a Lender to assign or transfer its rights or obligations under the Finance Documents; |
(h) | Clause 10.1 (Mandatory prepayment – illegality) or Clause 10.2 (Mandatory prepayment – change of control); or |
(i) | this Clause, |
28.2.2 | An amendment or waiver which relates to the rights or obligations of an Administrative Party or an Ancillary Lender may only be made with the consent of that Administrative Party or Ancillary Lender. |
28.3 | Disenfranchisement of Defaulting Lenders |
28.3.1 | For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request |
28.3.2 | For the purposes of this Clause 28.3, the Facility Agent may assume that the following Lenders are Defaulting Lenders: |
(a) | any Lender which has notified the Facility Agent that it has become a Defaulting Lender; |
(b) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of "Defaulting Lender" has occurred where, in the case of the events or circumstances referred to in paragraph (a), none of the exceptions to that paragraph apply, |
28.4 | Replacement of a Defaulting Lender |
28.4.1 | The Company may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days' prior written notice to the Facility Agent and such Lender: |
(a) | replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 29 (Changes to the Parties) all (and not part only) of its rights and obligations under this Agreement; or |
(b) | require such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 29 (Changes to the Parties) all (and not part only) of the undrawn Commitment of the Lender. |
28.4.2 | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions: |
(a) | the Company shall have no right to replace the Facility Agent; |
(b) | neither the Facility Agent nor the Defaulting Lender shall have any obligation to the Company to find a Replacement Lender; |
(c) | the transfer must take place no later than 14 days after the notice referred to in sub-clause 28.4.1 above; |
(d) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and |
(e) | the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to sub-clause 28.4.1 above once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to the Replacement Lender. |
28.5 | Excluded Commitments |
28.6 | Change of currency |
28.7 | Waivers and remedies cumulative |
28.7.1 | may be exercised as often as necessary; |
28.7.2 | are cumulative and not exclusive of its rights under the general law; and |
28.7.3 | may be waived only in writing and specifically. |
29. | CHANGES TO THE PARTIES |
29.1 | Assignments and transfers by the Company |
29.2 | Assignments and transfers by Lenders |
29.2.1 | A Lender (the Existing Lender) may, subject to the following provisions of this Clause 29, at any time assign or transfer (including by way of novation) any of its rights and obligations under this Agreement to any bank, financial institution or trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the New Lender). |
29.2.2 | Unless the Company and the Facility Agent otherwise agree, an assignment or transfer of part of a Commitment or rights and obligations under this Agreement by the Existing Lender must be in a minimum amount of £5,000,000. |
29.2.3 | An Existing Lender must consult with the Company for no more than five Business Days before it may make an assignment or transfer unless the New Lender is another Lender or an Affiliate of a Lender or an Event of Default has occurred and is outstanding. |
29.2.4 | The Facility Agent is not obliged to accept an assignment or execute a Transfer Certificate until it has completed all know your customer requirements to its satisfaction. The Facility Agent must promptly notify the Existing Lender and the New Lender if there are any such requirements. |
29.2.5 | An assignment of rights or a transfer of rights and obligations will be effective only if either: |
(a) | the obligations are novated in accordance with the following provisions of this Clause 29; or |
(b) | the New Lender confirms to the Facility Agent and the Company in form and substance satisfactory to the Facility Agent that it is bound by the terms of this Agreement as a Lender. On the assignment or transfer becoming effective in this manner the Existing Lender will be released from its rights and obligations under this Agreement to the extent that they are assigned or transferred to the New Lender. |
29.2.6 | Unless the Facility Agent otherwise agrees, the New Lender must pay to the Facility Agent for its own account, on or before the date any assignment or transfer occurs, a fee of £2,000. |
29.2.7 | Any reference in this Agreement to a Lender includes a New Lender but excludes a Lender if no amount is or may be owed to or by it under this Agreement. |
29.3 | Procedure for transfer by way of novations |
29.3.1 | In this Clause: |
(a) | the proposed Transfer Date specified in that Transfer Certificate; and |
(b) | the date on which the Facility Agent executes that Transfer Certificate. |
29.3.2 | A novation is effected if: |
(a) | the Existing Lender and the New Lender deliver to the Facility Agent a duly completed Transfer Certificate; and |
(b) | the Facility Agent executes it. |
29.3.3 | Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to execute any duly completed Transfer Certificate on its behalf. |
29.3.4 | 29.3.4 Subject to Clause 29.9 (Pro rata interest settlement), on the Transfer Date: |
(a) | the New Lender will assume the rights and obligations of the Existing Lender expressed to be the subject of the novation in the Transfer Certificate in substitution for the Existing Lender; and |
(b) | the Existing Lender will be released from those obligations and cease to have those rights. |
29.4 | Limitation of responsibility of Existing Lender |
29.4.1 | Unless expressly agreed to the contrary, an Existing Lender is not responsible to a New Lender for the legality, validity, adequacy, accuracy, completeness or performance of: |
(a) | any Finance Document or any other document; or |
(b) | any statement or information (whether written or oral) made in or supplied in connection with any Finance Document, |
29.4.2 | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(a) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Company and its related entities and the nature and extent of any recourse against any Party or its assets) in connection with its participation in this Agreement; and |
(b) | has not relied exclusively on any information supplied to it by the Existing Lender in connection with any Finance Document. |
29.4.3 | Nothing in any Finance Document requires an Existing Lender to: |
(a) | accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause; or |
(b) | support any losses incurred by the New Lender by reason of the non-performance by the Company of its obligations under any Finance Document or otherwise. |
29.5 | Costs resulting from change of Lender or Facility Office |
29.5.1 | a Lender assigns or transfers any of its rights and obligations under the Finance Documents or changes its Facility Office; and |
29.5.2 | as a result of circumstances existing at the date the assignment, transfer or change occurs, the Company would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased costs), |
29.6 | Changes to the Reference Banks |
29.6.1 | If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent must (in consultation with the Company) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank. |
29.6.2 | If a Reference Bank ceases to have a London office or novates or assigns all its rights and obligations under this Agreement or if any Commitments of any Reference Bank are cancelled or if Loans it has advanced are prepaid it shall be replaced as a Reference Bank by such other Lender or an Affiliate of a Lender with an office in London as the Facility Agent (after consultation with the Company) shall designate by notice to the Company and the Lenders. |
29.7 | Copy of Transfer Certificate or Increase Confirmation to Company |
29.8 | Security over Lenders' rights |
(a) | any charge, assignment or other security to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other security for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by the Company or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
29.9 | Pro rata interest settlement |
29.9.1 | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Term (or, if the Term is longer than six months, on the next of the dates which falls at six monthly intervals after the first day of that Term); and |
29.9.2 | the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt: |
(i) | when the Accrued Amounts become payable, those Accrued Amounts will be payable for the account of the Existing Lender; and |
(ii) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 29.9, have been payable to it on that date, but after deduction of the Accrued Amounts. |
30. | CONFIDENTIALITY AND DISCLOSURE OF INFORMATION |
30.1 | Confidential Information |
30.2 | Disclosure of Confidential Information |
30.2.1 | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this sub-clause 30.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
30.2.2 | to any person: |
(a) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(b) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or the Company and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(c) | appointed by any Finance Party or by a person to whom sub-clause 30.2.2 (a) or (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf; |
(d) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-clause 30.2.2 (a) or (b) above; |
(e) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
(f) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates security (or may do so) pursuant to Clause 29.8 (Security over Lenders' rights) ; |
(g) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(h) | who is a Party; or |
(i) | with the consent of the Company; |
(i) | in relation to sub-clause 30.2.2 (a), (b) and (c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; |
(ii) | in relation to sub-clause 30.2.2 (d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; |
(iii) | in relation to sub-clause 30.2.2 (e), (f) and (g) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; |
30.2.3 | to any person appointed by that Finance Party or by a person to whom sub-clause 30.2.2 (a) or (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this sub-clause 30.2.3 if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Company and the relevant Finance Party; |
30.2.4 | to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Company if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information. |
30.3 | Disclosure to numbering service providers |
30.3.1 | Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or the Company the following information: |
(a) | name of the Company; |
(b) | country of domicile of the Company; |
(c) | place of incorporation of the Company; |
(d) | date of this Agreement; |
(e) | the names of the Facility Agent and the Arranger; |
(f) | date of each amendment and restatement of this Agreement; |
(g) | amount of Total Commitments; |
(h) | currencies of the Facility; |
(i) | type of Facility; |
(j) | ranking of Facility; |
(k) | Final Maturity Date for the Facility; |
(l) | changes to any of the information previously supplied pursuant to paragraphs (a) to (k) above; and |
(m) | such other information agreed between such Finance Party and the Company, |
30.3.2 | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or the Company by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
30.3.3 | The Company represents that none of the information set out in paragraphs (a) to (m) of sub-clause 30.3.1 above is, nor will at any time be, unpublished price-sensitive information. |
30.3.4 | The Facility Agent shall notify the Company and the other Finance Parties of: |
(a) | the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or the Company; and |
(b) | the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or the Company by such numbering service provider. |
31. | CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS |
31.1 | Confidentiality and disclosure |
31.1.1 | The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by sub-clause 31.1.2, 31.1.3 and 31.1.4 below. |
31.1.2 | The Facility Agent may disclose: |
(a) | any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Company pursuant to Clause 11.4 (Notification of rates of interest); and |
(b) | any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a Confidentiality Undertaking. |
31.1.3 | The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to: |
(a) | any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors and partners if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it; |
(b) | any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; |
(c) | any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and |
(d) | any person with the consent of the relevant Lender or Reference Bank, as the case may be. |
31.1.4 | The Facility Agent's obligations in this Clause 31 (Confidentiality of Funding Rates and Reference Bank Quotations) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 11.4 (Notification of rates of interest) provided that (other than pursuant to paragraph (a) of sub-clause 31.1.2 above) the Facility Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification. |
31.2 | Other obligations |
31.2.1 | The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose. |
31.2.2 | The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be: |
(a) | of the circumstances of any disclosure made pursuant to paragraph (b) of sub-clause 31.1.3 above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(b) | upon becoming aware that any information has been disclosed in breach of this Clause 31 (Confidentiality of Funding Rates and Reference Bank Quotations). |
32. | SET-OFF |
32.1.1 | A Finance Party may set off any matured obligation owed to it by the Company under the Finance Documents (to the extent beneficially owned by that Finance Party) against any obligation (whether or not matured) owed by that Finance Party to the Company, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. |
32.1.2 | Any credit balances taken into account by an Ancillary Lender when operating a net limit in respect of any overdraft under an Ancillary Facility shall on enforcement of the Finance Documents be applied first in reduction of the overdraft provided under that Ancillary Facility in accordance with its terms. |
33. | PRO RATA SHARING |
33.1 | Redistribution |
33.1.1 | If any amount owing by the Company under this Agreement to a Lender (the "recovering Lender") is discharged by payment, set-off or any other manner other than through the Facility Agent under this Agreement (a "recovery"), then: |
(a) | the recovering Lender must, within three Business Days, supply details of the recovery to the Facility Agent; |
(b) | the Facility Agent must calculate whether the recovery is in excess of the amount which the recovering Lender would have received if the recovery had been received by the Facility Agent under this Agreement; and |
(c) | the recovering Lender must pay to the Facility Agent an amount equal to the excess (the "redistribution"). |
33.2 | Effect of redistribution |
33.2.1 | The Facility Agent must treat a redistribution as if it were a payment by the Company under this Agreement and distribute it among the Lenders, other than the recovering Lender, accordingly. |
33.2.2 | When the Facility Agent makes a distribution under sub-clause 33.2.1 above, the recovering Lender will be subrogated to the rights of the Finance Parties which have shared in that redistribution. |
33.2.3 | If and to the extent that the recovering Lender is not able to rely on any rights of subrogation under sub-clause 33.2.2 above, the Company will owe the recovering Lender a debt which is equal to the redistribution, immediately payable and of the type originally discharged. |
33.2.4 | If: |
(a) | a recovering Lender must subsequently return a recovery, or an amount measured by reference to a recovery, to the Company; and |
(b) | the recovering Lender has paid a redistribution in relation to that recovery, |
33.3 | Exceptions |
33.3.1 | it would not, after the payment, have a valid claim against the Company in the amount of the redistribution; or |
33.3.2 | it would be sharing with another Finance Party any amount which the recovering Lender has received or recovered as a result of legal or arbitration proceedings, where: |
(a) | the recovering Lender notified the Facility Agent of those proceedings; and |
(b) | the other Finance Party had an opportunity to participate in those proceedings but did not do so or did not take separate legal or arbitration proceedings as soon as reasonably practicable after receiving notice of them. |
33.4 | Ancillary Lenders |
33.4.1 | This Clause 32 shall not apply to any receipt or recovery by a Lender in its capacity as an Ancillary Lender at any time prior to service of notice under Clause 22.15 (Acceleration). |
33.4.2 | Following service of notice under Clause 22.15 (Acceleration), this Clause 32 shall apply to all receipts or recoveries by Ancillary Lenders except to the extent that the receipt or recovery represents a reduction from the Permitted Gross Outstandings of a Multi-account Overdraft to or towards an amount equal to its Designated Net Amount. |
34. | SEVERABILITY |
34.1 | If a term of a Finance Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: |
34.1.1 | the legality, validity or enforceability in that jurisdiction of any other term of the Finance Documents; or |
34.1.2 | the legality, validity or enforceability in other jurisdictions of that or any other term of the Finance Documents. |
35. | COUNTERPARTS |
36. | NOTICES |
36.1 | In writing |
36.1.1 | Any communication in connection with a Finance Document must be in writing and, unless otherwise stated, may be given: |
(a) | in person, by post, or fax or any other electronic communication approved by the Facility Agent; or |
(b) | if between the Facility Agent and a Lender and the Facility Agent and the Lender agree, by e-mail or other electronic communication. |
36.1.2 | For the purpose of the Finance Documents, an electronic communication will be treated as being in writing. |
36.1.3 | Unless it is agreed to the contrary, any consent or agreement required under a Finance Document must be given in writing. |
36.2 | Contact details |
36.2.1 | Except as provided below, the contact details of each Party for all communications in connection with the Finance Documents are those notified by that Party for this purpose to the Facility Agent on or before the date it becomes a Party. |
36.2.2 | The contact details of the Company for this purpose are: |
Address: | Avonbank, Feeder Road, Bristol BS2 0TB | |
Fax number: | 01179 332 108 | |
Phone number: | 01179 332 354 | |
E-mail: | jhunt9@westernpower.co.uk | |
Attention: | Julie Hunt | |
The contact details of the Facility Agent for this purpose are: | ||
Address: | 2 King Edward Street, London EC1A 1HQ | |
Fax number: | +44 208313 2149 | |
E-mail: | emea.7115loansagency@bankofamerica.com | |
Attention: | Loans Agency |
36.2.3 | Any Party may change its contact details by giving five Business Days' notice to the Facility Agent or (in the case of the Facility Agent) to the other Parties. |
36.2.4 | Where a Party nominates a particular department or officer to receive a communication, a communication will not be effective if it fails to specify that department or officer. |
36.3 | Effectiveness |
36.3.1 | Except as provided below, any communication in connection with a Finance Document will be deemed to be given as follows: |
(a) | if delivered in person, at the time of delivery; |
(b) | if posted, five days after being deposited in the post, postage prepaid, in a correctly addressed envelope; and |
(c) | if by fax, when received in legible form. |
36.3.2 | A communication given under sub-clause 36.3.1 above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place. |
36.3.3 | A communication to the Facility Agent will only be effective on actual receipt by it. |
36.4 | The Company |
36.5 | Communication when Facility Agent is Impaired Agent |
37. | LANGUAGE |
37.1.1 | Any notice given in connection with a Finance Document must be in English. |
37.1.2 | Any other document provided in connection with a Finance Document must be: |
(a) | in English; or |
(b) | (unless the Facility Agent otherwise agrees) accompanied by a certified English translation. In this case, the English translation prevails unless the document is a statutory or other official document. |
38. | GOVERNING LAW |
39. | ENFORCEMENT |
39.1 | Jurisdiction |
39.1.1 | The English courts have exclusive jurisdiction to settle any dispute in connection with any Finance Document including a dispute relating to any non-contractual obligation arising out of or in connection with this Agreement. |
39.1.2 | The English courts are the most appropriate and convenient courts to settle any such dispute and the Company waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document. |
39.1.3 | This Clause is for the benefit of the Finance Parties only. To the extent allowed by law, a Finance Party may take: |
(a) | proceedings in any other court; and |
(b) | concurrent proceedings in any number of jurisdictions. |
Name of Original Lender | Commitment | Treaty Passport scheme reference number and jurisdiction of tax residence (if applicable) |
Abbey National Treasury Services plc (trading as Santander Global Banking & Markets) | £38,571,428.57 | |
Bank of America Merrill Lynch International Limited | £30,000,000.00 | |
Barclays Bank PLC | £38,571,428.57 | |
HSBC Bank plc | £38,571,428.58 | |
Lloyds Bank plc | £38,571,428.57 | |
Mizuho Bank, Ltd | £38,571,428.57 | |
The Royal Bank of Scotland plc | £38,571,428.57 | |
Royal Bank of Canada | £38,571,428.57 | |
Total | £300,000,000 |
1. | We refer to the Agreement. This is a Request. Terms defined in the Agreement have the same meaning in this Request unless given a different meaning in this Request. |
2. | We wish to borrow a Loan on the following terms: |
(a) | Drawdown Date: [•] |
(b) | Amount/currency: [•] |
(c) | Term: [•] |
3. | Our payment instructions are: [•] |
4. | We confirm that each condition precedent under the Agreement which must be satisfied on the date of this Request is so satisfied. |
5. | We confirm that as at [relevant testing date] Consolidated EBITDA was [•] and Interest Payable was [•]; therefore, the ratio of Consolidated EBITDA to Interest Payable was [•] to 1. |
6. | We confirm that as at [relevant testing date] Regulatory Asset Base was [•] and Total Net Debt was [•]; therefore, Total Net Debt does not exceed an amount equal to 85% of the Regulatory Asset Base. |
7. | This Request is irrevocable. |
From: | [THE EXISTING LENDER] (the Existing Lender) and [THE NEW LENDER] (the New Lender) |
1. | The Existing Lender and the New Lender agree to the Existing Lender transferring by novation to the New Lender, and in accordance with Clause 29.3 (Procedure for transfer by way of novation), all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in Loans under the Agreement as specified in the Schedule below. |
2. | The proposed Transfer Date is [•]. |
3. | The administrative details of the New Lender for the purposes of the Agreement are set out in the Schedule. |
4. | The New Lender confirms, for the benefit of the Facility Agent and without liability to the Company, that it is: |
(a) | [a Qualifying Lender falling within paragraph (a)(i) or paragraph (b) of the definition of Qualifying Lender;] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender].* |
5. | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; or |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]** |
6. | [The New Lender confirms (for the benefit of the Facility Agent and without liability to the Company) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [•]), and is tax resident in [•] *** so that interest payable to it by the Company is generally subject to full exemption from UK withholding tax and notifies the Company that the Company must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
* | Delete as applicable - each New Lender is required to confirm which of these three categories it falls within. |
** | Include if New Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 14.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
7. | This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law. |
[EXISTING LENDER] | [NEW LENDER] | |||
By: | By | : | ||
The Transfer Date is confirmed by the Facility Agent as [•] . | ||||
[•] | ||||
By: |
1. | We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning in this Compliance Certificate unless given a different meaning in this Compliance Certificate. |
2. | We confirm that as at [relevant testing date], Consolidated EBITDA was [•] and Interest Payable was [•], therefore the ratio of Consolidated EBITDA to Interest Payable was [•] to 1. |
3. | We confirm that as at [relevant testing date], Regulatory Asset Base was [•] and Total Net Debt was [•]; therefore Total Net Debt does not exceed 85% of the Regulatory Asset Base. |
4. | We set out below calculations establishing the figures in paragraphs 2 and 3 above: |
5. | We confirm that the following companies were Material Subsidiaries at [relevant testing date]: |
6. | [We confirm that no Default is outstanding as at [relevant testing date].] 1. |
To: | Bank of America Merrill Lynch International Limited as Facility Agent and Western Power Distribution (West Midlands) plc as Company |
1. | We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation. |
2. | We refer to Clause 2.2 (Increase) of the Agreement. |
3. | In accordance with the terms of the Agreement, the Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the "Relevant Commitment") as if it was an Original Lender under the Agreement. |
4. | The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the "Increase Date") is []. |
5. | On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender. |
6. | The Facility Office and address, fax number and attention details for notices to the Increase Lender are set out in the Schedule. |
7. | The Increase Lender expressly acknowledges the limitations on the Lenders' obligations referred to in Clause 2.2 (Increase). |
8. | The Increase Lender confirms, for the benefit of the Facility Agent and without liability to the Company, that it is: |
8.1.1 | [a Qualifying Lender falling within paragraph (a)(i) or paragraph (b) of the definition of Qualifying Lender;] |
8.1.2 | [a Treaty Lender;] |
8.1.3 | [not a Qualifying Lender].* |
9. | [The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
9.1.1 | a company resident in the United Kingdom for United Kingdom tax purposes; or |
9.1.2 | a partnership each member of which is: |
(1) | a company so resident in the United Kingdom; or |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
9.1.3 | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]** |
10. | [The Increase Lender confirms (for the benefit of the Facility Agent and without liability to the Company) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number []), and is tax resident in [] *** so that interest payable to it by the Company is generally subject to full exemption from UK withholding tax and notifies the Company that the Company must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
* | Delete as applicable - each Increase Lender is required to confirm which of these three categories it falls within. |
** | Include if Increase Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 14.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the Increase Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
11. | This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation. |
12. | This Increase Confirmation and any non‑contractual obligations arising out of or in connection with it are governed by English law. |
13. | This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation. |
Facility Agent | |
By: | |
as Facility Agent for and on behalf of each of the parties to the Agreement (other than the Increase Lender) |
Loans in euro | Loans in sterling | Loans in other currencies | ||||
Facility Agent notifies the Company if a currency is approved as an Optional Currency in accordance with Clause 4.3 (Conditions relating to Optional Currencies) | - | - | U-4 | |||
Delivery of a duly completed Request (Clause 5.2 (Completion of Requests)) | U-3 9:30 a.m. | U-1 9:30 a.m. | U-3 9:30 a.m. | |||
Facility Agent determines (in relation to a Loan) the Base Currency Amount of the Loan, if required under Clause 5.4 (Advance of Loan) and notifies the Lenders of the Loan in accordance with Clause 5.4 (Advance of Loan) | U-3 Noon | U-1 Noon | U-3 Noon | |||
Facility Agent receives a notification from a Lender under Clause 7.2.1 (Revocation of a currency) | Quotation Day | - | Quotation Day | |||
Facility Agent gives notice in accordance with Clause 7.2 (Revocation of a currency) | Quotation Day 5:30 p.m. | - | Quotation Day 5:30 p.m. | |||
LIBOR or EURIBOR is fixed | Quotation Day as of 11:00 a.m. London time in respect of LIBOR and as of 11:00 a.m. (Brussels time) in respect of EURIBOR | Quotation Day as of 11:00 a.m. | Quotation Day as of 11:00 a.m. |
"U" | = date of utilisation |
"U-X" | = X Business Days prior to date of utilisation. |
1. | WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC (registered number 03600574) (the Company); |
2. | [SUBORDINATED CREDITOR] (the Subordinated Creditor); and |
3. | [l], as Facility Agent acting on behalf of the Lenders (the Facility Agent). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | the repayment or prepayment of any principal amount (or capitalised interest) outstanding under the Subordinated Finance Document; |
(b) | the payment of any interest, fee or charge accrued or due under or any other amount payable in connection with the Subordinated Finance Document; or |
(c) | the purchase, redemption, defeasance or discharge of any amount outstanding under the Subordinated Finance Document, |
1.2 | Construction |
1.2.1 | Capitalised terms defined in the Agreement have the same meaning in this Deed, unless given a different meaning in this Deed. |
1.2.2 | The principles of construction set out in the Agreement will have effect as if set out in this Deed. |
1.2.3 | Any undertaking by the Subordinated Creditor in this Deed remains in force from the date of this Deed to the Senior Debt Discharge Date. |
1.3 | Third Party rights |
2. | SUBORDINATION |
2.1 | Ranking |
2.2 | Undertakings of the Company |
2.2.1 | make any payment whatsoever in respect of the Subordinated Debt other than a Permitted Subordinated Debt Payment; or |
2.2.2 | secure, in any manner, all or any part of the Subordinated Debt; or |
2.2.3 | defease, in any manner, all or any part of the Subordinated Debt; or |
2.2.4 | give any financial support (including the taking of any participation, the giving of any guarantee or other assurance or the making of any deposit) to any person in connection with all or any part of the Subordinated Debt; or |
2.2.5 | procure any other person to do any of the acts or take any of the actions referred to paragraphs 2.2.1 to 2.2.4 above. |
2.3 | Undertakings of the Subordinated Creditor |
2.3.1 | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(a) | allow to exist or receive the benefit of any Security Interest, guarantee, indemnity or other assurance against loss in respect of all or any of the Subordinated Debt or all or any rights which it may have against the Company in respect of all or any part of the Subordinated Debt; or |
(b) | take or omit to take any action or step whereby the subordination of all or any of the Subordinated Debt might be terminated, impaired or adversely affected. |
2.3.2 | The Subordinated Creditor will not without the prior written consent of the Lenders receive any payment save where such payment is a Permitted Subordinated Debt Payment. |
2.3.3 | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(a) | demand payment, declare prematurely due and payable or otherwise seek to accelerate payment of or place on demand all or any part of the Subordinated Debt or enforce the Subordinated Debt by execution or otherwise; |
(b) | initiate or support or take any steps with a view to, or which may lead to: |
(i) | any insolvency, liquidation, reorganisation, administration or dissolution proceedings; |
(ii) | any voluntary arrangement or assignment for the benefit of creditors; or |
(iii) | any similar proceedings, |
(c) | bring or support any legal proceedings against the Company or any of its Subsidiaries; or |
(d) | otherwise exercise any remedy for the recovery of all or any part of the Subordinated Debt (including, without limitation, the exercise of any right of set-off, counterclaim or lien). |
2.3.4 | If the Subordinated Creditor receives any payment which is in breach of any Finance Document, it shall hold such sums on trust for the Facility Agent (acting on behalf of the Lenders) and pay them immediately to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt. |
2.3.5 | The Subordinated Creditor and the Company hereby agree for the benefit of the Facility Agent and the Lenders that, notwithstanding the terms of the Subordinated Finance Document and any agreement relating to the Subordinated Debt, the Subordinated Debt is made available on terms such that it is not, save for a Permitted Subordinated Debt |
2.4 | Subordination on insolvency |
2.4.1 | the Subordinated Debt shall continue to be subordinated to the Senior Debt; |
2.4.2 | any payment or distribution of any kind or character and all and any rights in respect thereof, whether in cash, securities or other property which is payable or deliverable upon or with respect to the Subordinated Debt or any part thereof by a liquidator, administrator or receiver (or the equivalent thereof) of the Company or its estate (the "rights") made to or paid to, or received by the Subordinated Creditor or to which the Subordinated Creditor is entitled shall be held on trust by the Subordinated Creditor for the Lenders and shall forthwith be paid or, as the case may be, transferred or assigned to the Lenders to be applied against the Senior Debt; |
2.4.3 | if the trust referred to in paragraph 2.4.2 above or paragraph 2.3.4 of Clause 2.3 above fails or cannot be given effect to or if the Subordinated Creditor receives and retains the relevant payment or distribution, the Subordinated Creditor will pay over such rights in the form received to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt; |
2.4.4 | the Subordinated Creditor acknowledges the rights of the Facility Agent (acting on behalf of the Lenders) to demand, sue and prove for, collect and receive every payment or distribution referred to in paragraph 2.4.2 above and give acquittance therefore and to file claims and take such other proceedings, in the Facility Agent's own name or otherwise, as the Facility Agent may deem necessary or advisable for the enforcement of this Deed; and |
2.4.5 | the Subordinated Creditor by way of security for its obligations under this Deed irrevocably appoints the Facility Agent to be its attorney in order to enable the Facility Agent to enforce any and all claims upon or with respect to the Subordinated Debt or any part thereof, and to collect and receive any and all payments or distributions referred to in paragraph 2.4.2 above or to do anything which that Subordinated Creditor has authorised the Facility Agent or any other Party to do under this Deed or is itself required to do under this Deed but has failed to do (and the Facility Agent may delegate that power on such terms as it sees fit). |
3. | SET-OFF |
3.1.1 | The Subordinated Creditor shall not set off against the Subordinated Debt any amount payable by the Subordinated Creditor to the Company. |
3.1.2 | If any part of the Subordinated Debt is discharged in whole or in part by way of set- off, the Subordinated Creditor will promptly pay to the Facility Agent for application in accordance with the terms of paragraph 2.4.2 of Clause 2.4 (Subordination on insolvency) an amount equal to the amount of the Subordinated Debt discharged by such set-off. |
4. | NEW MONEY |
5. | PROTECTION OF SUBORDINATION |
5.1.1 | The subordination in this Deed is a continuing subordination and benefits the ultimate balance of the Senior Debt. |
5.1.2 | Except as provided in this Deed, the subordination is, and the Subordinated Creditor's obligations under this Deed will, not be affected by any act, omission or thing which, but for this provision, would reduce, release or prejudice the subordination or any of the Subordinated Creditor's obligations under this Deed. |
6. | MISCELLANEOUS |
6.1.1 | This Deed overrides anything in any Subordinated Finance Document to the contrary. |
6.1.2 | Any communication in respect of this Deed must be in writing. Contact details for each Party are set out opposite their name, below. |
6.1.3 | This Deed is a Finance Document. |
7. | ASSIGNMENT |
7.1.1 | The Facility Agent (acting on behalf of the Lenders) shall have the full and unfettered right to assign or otherwise transfer the whole or any part of the benefit of this Deed to any person to whom all or a corresponding part of its rights, benefits and obligations under any of the Finance Documents are assigned or transferred in accordance with their provisions. |
7.1.2 | The Subordinated Creditor shall not assign or transfer all or any of its rights, title, benefit and interest in or to all or any part of the Subordinated Debt unless in full and on or prior to such assignment or transfer the assignee or transferee accedes to this Deed as Subordinated Creditor pursuant to the Subordinated Creditor Accession Deed. |
8. | TRUSTS |
8.1.1 | The Facility Agent shall hold the benefit of this Deed upon trust for itself and the Lenders. |
8.1.2 | The perpetuity period for each trust created by this Deed shall be 80 years. |
9. | TERMINATION |
10. | GOVERNING LAW |
11. | JURISDICTION |
To: | [l], as Facility Agent acting on behalf of the Lenders. |
EXECUTED as a DEED | ) | |||
by WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Company contact details: | ||||
Address: | Avonbank, Feeder Road, | |||
Bristol BS2 0TB | ||||
Fax number: | 01179 332 108 | |||
Phone number: | 01179 332 354 | |||
E-mail: | jhunt9@wsternpower.co.uk | |||
Attention: | Julie Hunt |
EXECUTED as a DEED | ) | |||
by [ACCEDING SUBORDINATED CREDITOR] | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Subordinated Creditor contact details: | ||||
Address: | ||||
Fax number: | ||||
Phone number: | ||||
E-mail: | ||||
Attention: |
EXECUTED as a DEED | ) | ||
by [AGENT] | ) | ||
acting by | ) | ||
Director | |||
In the presence of: | |||
Witness's Signature: | |||
Name: | |||
Address: | |||
Facility Agent contact details: | |||
Address: | |||
1. | We refer to the Agreement and the Deed. Capitalised terms defined in the Deed have the same meaning in this Certificate, unless given a different meaning in this Certificate. |
2. | We confirm that the Company will make [insert type of payment] of [insert amount and currency] under [insert description of relevant Subordinated Finance Document] on [insert date of payment]. |
3. | We confirm that, taking into account such payment, the Company will be in compliance with its obligations under Clause 20 (Financial Covenants) of the Agreement on each of the next two Measurement Dates (as such term is defined in the Agreement). |
EXECUTED as a DEED | ) | |||
by WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Company contact details: | ||||
Address: | Avonbank, Feeder Road, | |||
Bristol BS2 0TB | ||||
Fax number: | 01179 332 108 | |||
Phone number: | 01179 332 354 | |||
E-mail: | jhunt9@wsternpower.co.uk | |||
Attention: | Julie Hunt |
EXECUTED as a DEED | ) | |||
by [SUBORDINATED CREDITOR] | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Subordinated Creditor contact details: | ||||
Address: | ||||
Fax number: | ||||
Phone number: | ||||
E-mail: | ||||
Attention: |
EXECUTED as a DEED | ) | ||
by [l] | ) | ||
acting by | ) | ||
Director | |||
In the presence of: | |||
Witness's Signature: | |||
Name: | |||
Address: | |||
Facility Agent contact details: | |||
Address: | Bracken House | ||
One Friday Street | |||
London EC4M 9JA |
Signed by: for and on behalf of WESTERN POWER DISTRIBUTION (WEST MIDLANDS) PLC | ) ) ) ) |
Address: | Avonbank |
Feeder Road | |
Bristol BS2 0TB | |
Fax: | +44 (0)1179 332 108 |
Signed by: ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) | ) ) ) ) ) ) |
Address: | 2 Triton Square |
Regents Place | |
London NW1 3AN | |
Attention: | Alejandro Ciruelos (for credit matters) |
Samuel Russell (for administration matters) | |
Fax: | +44 (0)20 7756 5816 |
with a copy to Jim Inches/ David Navalón Vaquero | |
Fax: | +44 (0)845 602 7837 |
Signed by: for and on behalf of BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
Signed by: for and on behalf of BARCLAYS BANK PLC | ) ) ) ) |
Address: | 5 The North Colonnade |
London E14 4BB | |
Fax: | +44 (0)20 7773 1840 |
Signed by: CREDIT SUISSE AG, LONDON BRANCH | ) ) ) |
Address: | One Cabot Square |
London E14 4QJ | |
Fax: | +44 (0)20 888 8398 |
Signed by: HSBC BANK PLC | ) ) ) |
Address: | Sharon daw |
West & Wales Corporate Banking Centre | |
3 Rivergate, Bristol, BS1 6ER | |
Fax: | +44 (0)8455 877941 |
Signed by: LLOYDS BANK PLC | ) ) ) |
Address: | 10 Gresham Street |
London EC2V 7AE | |
Fax: | +44 (0)20 7158 3297 |
Signed by: MIZUHO BANK, LTD. | ) ) ) ) |
Address: | Bracken House |
One Friday Street | |
London EC4M 9JA | |
Fax: | +44 (0)207 012 4301 |
Signed by: THE ROYAL BANK OF SCOTLAND PLC | ) ) ) ) |
Address: | 7th Floor, 135 Bishopsgate |
London EC2M 3UR | |
Fax: | +44 (0)20 7085 8762 |
Signed by: ROYAL BANK OF CANADA | ) ) ) |
Attention: | Mike Atherton/ Mark Goodin (for credit matters) |
Address: | Thames Court |
One Queenhithe | |
London EC4V 4DE | |
Fax: | +44 (0)20 7029 7912 |
Attention: | David Banning/ Maggie Weiyan Tang/ Ahmed Awad/ Vinodkumar NalappadamVeetil (for administration matters) |
Address: | Riverbank House |
2 Swan Lane | |
London EC4R 3BF | |
Fax: | +44 (0)20 7332 0036 |
Signed by: ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) | ) ) ) ) ) ) ) |
Address: | 2 Triton Square |
Regents Place | |
London NW1 3AN | |
Attention: | Alejandro Ciruelos (for credit matters) |
Samuel Russell (for administration matters) | |
Fax: | +44 (0)20 7756 5816 |
with a copy to Jim Inches/ David Navalón Vaquero | |
Fax: | 44 (0)845 602 7837 |
Signed by: BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London, EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
Signed by: BARCLAYS BANK PLC | ) ) ) ) |
Address: | 5 The North Colonnade |
London E14 4BB | |
Fax: | +44 (0)20 7773 1840 |
Signed by: CREDIT SUISSE AG, LONDON BRANCH | ) ) ) |
Address: | One Cabot Square |
London E14 4QJ | |
Fax: | +44 (0)20 888 8398 |
Signed by: HSBC BANK PLC | ) ) ) |
Address: | Sharon daw |
West & Wales Corporate Banking Centre | |
3 Rivergate, Bristol, BS1 6ER | |
Fax: | +44 (0)8455 877941 |
Signed by: LLOYDS BANK PLC | ) ) ) |
Address: | 10 Gresham Street |
London EC2V 7AE | |
Fax: | +44 (0)20 7158 3297 |
Signed by: MIZUHO BANK, LTD. | ) ) ) ) |
Address: | Bracken House |
One Friday Street | |
London EC4M 9JA | |
Fax: | +44 (0)207 012 4301 |
Signed by: ROYAL BANK OF CANADA | ) ) ) |
Attention: | Mike Atherton/ Mark Goodin (for credit matters) |
Address: | Thames Court |
One Queenhithe | |
London EC4V 4DE | |
Fax: | +44 (0)20 7029 7912 |
Attention: | David Banning/ Maggie Weiyan Tang/ Ahmed Awad/ Vinodkumar NalappadamVeetil (for administration matters) |
Address: | Riverbank House |
2 Swan Lane | |
London EC4R 3BF | |
Fax: | +44 (0)20 7332 0036 |
Signed by: THE ROYAL BANK OF SCOTLAND PLC | ) ) ) ) |
Address: | 7th Floor, 135 Bishopsgate |
London EC2M 3UR | |
Fax: | +44 (0)20 7085 8762 |
Signed by: BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London, EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
Signed by: BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London, EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
Signed by for and on behalf of MIZUHO BANK, LTD. | ) ) ) |
Address: | Bracken House |
One Friday Street | |
Fax: | London EC4M 9JA |
+44 (0)207 012 4053 |
Signed by for and on behalf of HSBC BANK PLC | ) ) ) |
Address: | Sharon daw |
West & Wales Corporate Banking Centre | |
3 Rivergate, Bristol, BS1 6ER | |
Fax: | +44 (0)8455 877941 |
West Midlands – C onformed Copy |
Dated 4 April 2011 (as amended and restated on 29 July 2014 and as amended on 13 March 2018) | |||
WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC as the Company HSBC BANK PLC AND MIZUHO BANK, LTD. as Joint Coordinators ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED BARCLAYS BANK PLC HSBC BANK PLC LLOYDS BANK PLC MIZUHO BANK, LTD. ROYAL BANK OF CANADA THE ROYAL BANK OF SCOTLAND PLC as Bookrunners and Mandated Lead Arrangers and BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED as Facility Agent | |||
£300,000,000 MULTICURRENCY REVOLVING FACILITY AGREEMENT |
CONTENTS | |
Clause | Page |
1 | Interpretation | 9 |
2 | The Facility | 31 |
3 | Purpose | 34 |
4 | Conditions Precedent | 34 |
5 | Utilisation | 35 |
6 | Extension option | 36 |
7 | Optional Currencies | 37 |
8 | Ancillary Facilities | 38 |
9 | Repayment | 42 |
10 | Prepayment and Cancellation | 43 |
11 | Interest | 46 |
12 | Terms | 47 |
13 | Market Disruption | 48 |
14 | Tax gross-up and indemnities | 49 |
15 | Increased Costs | 57 |
16 | Mitigation | 58 |
17 | Payments | 60 |
18 | Representations | 63 |
19 | Information Covenants | 67 |
20 | Financial Covenants | 70 |
21 | General Covenants | 73 |
22 | Default | 80 |
23 | The Administrative Parties | 84 |
24 | Evidence and Calculations | 90 |
25 | Fees | 90 |
26 | Indemnities and Break Costs | 92 |
27 | Expenses | 93 |
28 | Amendments and Waivers | 93 |
29 | Changes to the Parties | 96 |
30 | Confidentiality and Disclosure of Information | 100 |
31 | Confidentiality of Funding Rates and Reference Bank Quotations | 103 |
32 | Set-off | 105 |
33 | Pro rata sharing | 105 |
34 | Severability | 107 |
35 | Counterparts | 107 |
36 | Notices | 107 |
37 | Language | 109 |
38 | Governing law | 109 |
39 | Enforcement | 109 |
Schedule 1 Original Parties | 110 | |
Schedule 2 Conditions Precedent Documents | 111 | |
Schedule 3 Requests | 112 | |
Schedule 4 Form of Transfer Certificate | 113 | |
Schedule 5 Form of Compliance Certificate | 116 |
Schedule 6 Form of Increase Confirmation | 117 | |
Schedule 7 Timetables | 120 | |
Schedule 8 Form of Subordination Deed | 121 |
(1) | WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC (registered number 02366923) (the "Company"); |
(2) | HSBC BANK PLC and MIZUHO BANK, LTD. as joint coordinators (the "Joint Coordinators"); |
(3) | ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS), BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED, BARCLAYS BANK PLC, HSBC BANK PLC, LLOYDS BANK PLC, MIZUHO BANK, LTD., ROYAL BANK OF CANADA and THE ROYAL BANK OF SCOTLAND PLC as bookrunners and mandated lead arrangers (the "Arrangers"); |
(4) | THE FINANCIAL INSTITUTIONS listed in Schedule 1 (Original Parties) as original lenders (the "Original Lenders"); and |
(5) | BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED as facility agent (the "Facility Agent"). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | an Effective Date Lender (as defined in the Amendment Agreement); |
(b) | a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor’s Rating Services or A- or higher by Fitch Ratings Ltd or A3 or higher by Moody’s Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or |
(c) | any other bank or financial institution approved by the Facility Agent (acting reasonably). |
(a) | the United States of America; |
(b) | the United Kingdom; or |
(c) | any other member state of the European Union or any Participating Member State where such country has long term sovereign credit rating of A- or higher by Standard & Poor's |
(a) | the principal amount under each overdraft facility and on-demand short term loan facility (net of any Available Credit Balance); |
(b) | the face amount of each guarantee, bond and letter of credit under that Ancillary Facility; and |
(c) | the amount fairly representing the aggregate exposure (excluding interest and similar charges) of that Ancillary Lender under each other type of accommodation provided under that Ancillary Facility, |
(a) | the Base Currency Amount of its participation in any outstanding Loans and the Base Currency Amount of the aggregate of its (and its Affiliate's) Ancillary Commitments; and |
(b) | in relation to any proposed Loans, the Base Currency Amount of its participation in any Loans that are due to be made on or before the proposed Drawdown Date and the Base Currency Amount of its (and its Affiliate's) Ancillary Commitment in relation to any new Ancillary Facility that is due to be made available on or before the proposed Drawdown Date, |
(a) | in relation to a Loan, the amount specified in the Request delivered by the Company for that Loan (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before the Drawdown Date or, if later, on the date the Facility Agent receives the Request adjusted to reflect any repayment, prepayment, consolidation or division of the Loan, or as the case may be, cancellation or reduction of an Ancillary Facility; and |
(b) | in relation to an Ancillary Commitment, the amount specified as such in the notice delivered to the Facility Agent by the Company pursuant to Clause 8.2 (Availability) (or, if the amount specified is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before the Ancillary Commencement Date for that Ancillary Facility or, if later, the date the Facility Agent receives the notice of the Ancillary Commitment in accordance with the terms of this Agreement). |
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
(b) | the rules for global systematically important banks contained in "Global systematically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III". |
(a) | if on that day a payment in or a purchase of a currency (other than euro) is to be made, the principal financial centre of the country of that currency; or |
(b) | if on that day a payment in or purchase of euro is to be made, which is also a TARGET Day. |
(a) | in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading "Commitment" in Schedule 1 (Original Parties) and the amount of |
(b) | in relation to any other Lender, the amount in the Base Currency of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase), |
(a) | any member of the Group or any of its advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers, |
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 30 (Confidentiality and disclosure of information); or |
(ii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
(iii) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality. |
(a) | Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and |
(b) | Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit |
(a) | purchases by way of assignment or transfer; |
(b) | enters into any sub-participation in respect of; or |
(c) | enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of, |
(a) | an Event of Default; or |
(b) | an event which would be (with the lapse of time, the expiry of a grace period, the giving of notice or the making of any determination under the Finance Documents or any combination of them) an Event of Default. |
(a) | which has failed to make its participation in a Loan available or has notified the Facility Agent that it will not make its participation in a Loan available by the Drawdown Date of that Loan in accordance with Clause 5.4 (Advance of Loan); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Finance Documents (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(a) | air (including, without limitation, air within natural or man-made structures, whether above or below ground); |
(b) | water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and |
(c) | land (including, without limitation, land under water). |
(a) | the pollution or protection of the Environment; |
(b) | the conditions of the workplace; or |
(c) | the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste. |
(a) | the applicable Screen Rate; |
(b) | (if no Screen Rate is available for the Term of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | if: |
(i) | no Screen Rate is available for the Term of that Loan; and |
(ii) | it is not possible to calculate an Interpolated Screen Rate for that Loan, |
(a) | on or before the date it becomes a Lender; or |
(b) | by not less than five Business Days' notice, |
(a) | sections 1471 to 1474 of the Code or any associated regulations or other official guidance; |
(b) | any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or |
(c) | any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction. |
(a) | in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; |
(b) | in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or |
(c) | in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, |
(a) | any letter entered into by reference to the Facility between one or more Administrative Parties and the Company setting out the amount of certain fees referred to in the Agreement; and |
(b) | any agreement setting out fees payable to a Finance Party referred to in Clause 25 (Fees) of this Agreement or under any other Finance Document. |
(a) | this Agreement; |
(b) | any Ancillary Document; |
(c) | a Fee Letter; |
(d) | a Transfer Certificate; or |
(e) | any other document designated as such by the Facility Agent and the Company. |
(a) | moneys borrowed; |
(b) | any acceptance credit; |
(c) | any bond, note, debenture, loan stock or other similar instrument; |
(d) | any redeemable preference share; |
(e) | any finance or capital lease; |
(f) | receivables sold or discounted (otherwise than on a non-recourse basis); |
(g) | the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset; |
(h) | any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, except for non-payment of an amount, the then mark to market value of the derivative transaction will be used to calculate its amount); |
(i) | any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing; |
(j) | any counter-indemnity obligation in respect of any guarantee, indemnity, bond, letter of credit or any other instrument issued by a bank or financial institution; or |
(k) | any guarantee, indemnity or similar assurance against financial loss of any person in respect of any item referred to in paragraphs (a) to (j) above. |
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; |
(b) | the Facility Agent otherwise rescinds or repudiates a Finance Document; |
(c) | (if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of "Defaulting Lender"; or |
(d) | an Insolvency Event has occurred and is continuing with respect to the Facility Agent; |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | an additional or increased cost; |
(b) | a reduction in the rate of return under a Finance Document or on a Finance Party's (or its Affiliate's) overall capital; or |
(c) | a reduction of an amount due and payable under any Finance Document, |
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation by it or such regulator, supervisor or similar official; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has a resolution passed for its winding up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(g) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; |
(h) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; |
(i) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or |
(j) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Term of that Loan; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Term of that Loan, |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; |
(c) | similar principles, rights and defences under the laws of any jurisdiction in which a member of the Group or a Holding Company of the Company is incorporated; and |
(d) | any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinion provided under Schedule 2 (Conditions Precedent Documents). |
(a) | an Original Lender; or |
(b) | any person which becomes a Lender after the date of this Agreement in accordance with Clause 2.2 (Increase) or Clause 29 (Changes to the Parties), |
(a) | the applicable Screen Rate; |
(b) | (if no Screen Rate is available for the Term of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | if: |
(i) | no Screen Rate is available for the currency of that Loan; or |
(ii) | no Screen Rate is available for the Term of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan, |
(a) | the electricity distribution licence made and treated as granted to the Company under Section 6(1)(c) of the Act pursuant to a licensing scheme made by the Secretary of State under Part II of Schedule 7 to the Utilities Act 2000 on 28 September, 2001; or |
(b) | any statutory amendment or replacement licence or licences granted pursuant to the Utilities Act 2000 which permit the Company to distribute electricity in the area it is certified to operate in. |
(a) | whose share in the outstanding Loans and whose undrawn Commitments then aggregate 662/3 per cent. or more of the aggregate of all the outstanding Loans and the undrawn Commitments of all the Lenders; |
(b) | if there are no Loans then outstanding, whose undrawn Commitments then aggregate 662/3 per cent. or more of the Total Commitments; or |
(c) | if there are no Loans then outstanding and the Total Commitments have been reduced to zero, whose Commitments aggregated 662/3 per cent. or more of the Total Commitments immediately before the reduction. |
(a) | at least one of Moody's Investor Services Limited ("Moody's") and Standard & Poor's Ratings Services ("Standard & Poor's") has provided a current rating in respect of the long-term, unsecured and non credit-enhanced debt obligations of the Company; and |
(b) | no Event of Default is outstanding, |
Rating (Moody's) | Rating (Standard & Poor's) | Margin (per annum) |
Less than Baa3 | Less than BBB- | 1.15% |
Baa3 | BBB- | 0.95% |
Baa2 | BBB | 0.85% |
Baa1 | BBB+ | 0.75% |
A3 or higher | A- or higher | 0.65% |
Rating (Moody's) | Rating (Standard & Poor's) | Margin (per annum) |
Less than Baa3 | Less than BBB- | 0.90% |
Baa3 | BBB- | 0.70% |
Baa2 | BBB | 0.55% |
Baa1 | BBB+ | 0.45% |
A3 or higher | A- or higher | 0.35% |
(a) | the business, assets or financial condition of the Group taken as a whole; |
(b) | the ability of the Company to perform its payment obligations under the Finance Documents or its obligations under Clauses 20.3 (Interest Cover) or 20.4 (Asset Cover) of this Agreement; or |
(c) | the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
(a) | the gross assets or gross revenues of a Subsidiary of the Company will be determined from its financial statements (consolidated if it has Subsidiaries) upon which the latest audited financial statements of the Group have been based; |
(b) | if a Subsidiary of the Company becomes a member of the Group after the date on which the latest audited financial statements of the Group have been prepared, the gross assets or gross revenues of that Subsidiary will be determined from its latest financial statements; |
(c) | the gross assets or gross revenues of the Group will be determined from the Company’s latest audited financial statements, adjusted (where appropriate) to reflect the gross assets or gross revenues of any company or business subsequently acquired or disposed of; and |
(d) | if a Material Subsidiary disposes of all or substantially all of its assets to another Subsidiary of the Company, it will immediately cease to be a Material Subsidiary and the other Subsidiary (if it is not already) will immediately become a Material Subsidiary; the subsequent financial statements of those Subsidiaries and the Group will be used to determine whether those Subsidiaries are Material Subsidiaries or not. |
(a) | in the case the consent, waiver or amendment in question requires the approval of all the Lenders, Lenders whose Commitments aggregate more than 85% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 85% of the Total Commitments prior to that reduction); or |
(b) | in the case the consent, waiver or amendment in question requires the approval of the Majority Lenders, Lenders whose Commitments aggregate more than 60% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 60% of the Total Commitments prior to that reduction), |
(a) | for the purpose of determining a Lender's share in a Loan, the proportion which its Available Commitment bears to the Available Facility immediately prior to making the Loan; and |
(b) | for any other purpose on a particular date: |
(i) | the proportion which its Commitment bears to the Total Commitments on that date; or |
(ii) | if the Total Commitments have been cancelled, the proportion which its Commitments bore to the Total Commitments immediately before being cancelled. |
(a) | (if the currency is Sterling) the first day of that period; |
(b) | (if the currency is euro) two TARGET Days before the first day of that period; or |
(c) | (for any other currency) two Business Days before the first day of that period, |
(a) | in relation to LIBOR, as the rate at which the relevant Reference Bank could borrow funds in the London interbank market; or |
(b) | in relation to EURIBOR, as the rate at which the relevant Reference Bank could borrow funds in the European interbank market, |
(a) | made or to be made on the same day that a maturing Loan is due to be repaid; |
(b) | the aggregate amount of which is equal to or less than the amount of the maturing Loan; |
(c) | in the same currency as the maturing Loan (unless it arose as a result of the operation of Clause 7.2 (Revocation of a currency); and |
(d) | made or to be made to the Company for the purpose of refinancing that maturing Loan. |
(a) | in relation to LIBOR, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate); and |
(b) | in relation to EURIBOR, the euro interbank offered rate administered by the Banking Federation of the European Union (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Reuters screen (or any replacement Reuters page which displays that rate), |
(a) | a subsidiary within the meaning of section 1159 of the Companies Act 2006; and |
(b) | unless the context otherwise requires, a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006. |
(a) | the proposed Transfer Date specified in the relevant Transfer Certificate; and |
(b) | the date on which the Facility Agent executes the relevant Transfer Certificate. |
(a) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112; and |
(b) | any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere. |
1.2 | Construction |
1.2.1 | The following definitions have the meanings given to them in Clause 20 (Financial Covenants): |
(a) | Cash; |
(b) | Cash Equivalent Investments; |
(c) | Consolidated EBITDA; |
(d) | Interest Payable; |
(e) | Measurement Period; |
(f) | Regulatory Asset Base; and |
(g) | Total Net Debt. |
1.2.2 | In this Agreement, unless the contrary intention appears, a reference to: |
(a) | an amendment includes a supplement, novation, restatement or re-enactment and amended will be construed accordingly; |
(b) | assets includes present and future properties, revenues and rights of every description; |
(c) | an authorisation includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation; |
(d) | disposal means a sale, transfer, grant, lease or other disposal, whether voluntary or involuntary, and dispose will be construed accordingly; |
(e) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money; |
(f) | know your customer requirements are the identification checks that a Finance Party requests in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer; |
(g) | a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, joint venture or consortium), government, state, agency, organisation or other entity whether or not having separate legal personality; |
(h) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; |
(i) | the winding-up of a person includes the administration, dissolution or liquidation or other like process of that person, any composition or arrangement with the creditors, amalgamation, reconstruction, reorganisation or consolidation pursuant to Part XXVI of the Companies Act 2006 proposed or carried out in respect of that person or a company voluntary arrangement pursuant to the Insolvency Act 1986 carried out or proposed in respect of that person; |
(j) | a currency is a reference to the lawful currency for the time being of the relevant country; |
(k) | save as set out in the definition of Margin in Clause 1.1 (Definitions), a Default (other than an Event of Default) being outstanding means that it has not been remedied or waived and an Event of Default being outstanding means that it has not been waived; |
(l) | a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation; |
(m) | a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Agreement; |
(n) | a person includes its successors in title, permitted assigns and permitted transferees; |
(o) | a Finance Document or another document is a reference to that Finance Document or other document as amended; and |
(p) | a time of day is a reference to London time. |
1.2.3 | Unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: |
(a) | if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is not); |
(b) | if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and |
(c) | notwithstanding sub-clause 1.2.3(a) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month in which it is to end, as appropriate. |
1.2.4 | Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999 and notwithstanding any term of any Finance Document, the consent of any third party is not required for any variation (including any release or compromise of any liability) or termination of that Finance Document. |
1.2.5 | Unless the contrary intention appears: |
(a) | a reference to a Party will not include that Party if it has ceased to be a Party under this Agreement; |
(b) | a word or expression used in any other Finance Document or in any notice given in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement; and |
(c) | any obligation of the Company under the Finance Documents which is not a payment obligation remains in force for so long as any payment obligation of the Company is or may be outstanding under the Finance Documents. |
1.2.6 | The headings in this Agreement do not affect its interpretation. |
1.2.7 | The Company providing cash cover for an Ancillary Facility means the Company paying an amount in the currency of the Ancillary Facility to an interest-bearing account in the name of the Company and the following conditions being met: |
(a) | the account is with the Ancillary Lender for which that cash cover is to be provided; |
(b) | until no amount is or may be outstanding under that Ancillary Facility, withdrawals from the account may only be made to pay the relevant Finance Party amounts due and payable to it under this Agreement in respect of that Ancillary Facility; and |
(c) | the Company has executed a security document over that account, in form and substance satisfactory to the Ancillary Lender with which that account is held, creating a first ranking security interest over that account. |
1.2.8 | The Company repaying or prepaying any Ancillary Outstandings means: |
(a) | the Company providing cash cover in respect of the Ancillary Outstandings; |
(b) | the maximum amount payable under the Ancillary Facility being reduced or cancelled in accordance with its terms; or |
(c) | the Ancillary Lender being satisfied (acting reasonably) that it has no further liability under that Ancillary Facility, |
1.2.9 | An amount borrowed includes any amount utilised under an Ancillary Facility. |
2. | THE FACILITY |
2.1 | The Facility |
2.1.1 | Subject to the terms of this Agreement, the Lenders make available to the Company a multicurrency revolving credit facility in an aggregate amount the Base Currency Amount of which is equal to the Total Commitments. |
2.1.2 | Subject to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make all or part of its Commitment available to the Company as an Ancillary Facility. |
2.2 | Increase |
2.2.1 | The Company may by giving prior notice to the Facility Agent by no later than the date falling 10 Business Days after the effective date of a cancellation of: |
(a) | the Available Commitments of a Defaulting Lender in accordance with sub-clause 10.6.4 of Clause 10.6 (Involuntary prepayment and cancellation); or |
(b) | the Commitments of a Lender in accordance with: |
(i) | Clause 10.1 (Mandatory prepayment – illegality); or |
(ii) | sub-clause 10.6.2 of Clause 10.6 (Involuntary prepayment and cancellation), |
(c) | the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an "Increase Lender") selected by the Company (each of which shall not be a member of the Group and which is further acceptable to the Facility Agent (acting reasonably)) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender; |
(d) | the Company and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Company and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(e) | each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(f) | the Commitments of the other Lenders shall continue in full force and effect; and |
(g) | any increase in the Total Commitments shall take effect on the date specified by the Company in the notice referred to above or any later date on which the conditions set out in sub-clause 2.2.2 below are satisfied. |
2.2.2 | An increase in the Total Commitments will only be effective on: |
(a) | the execution by the Facility Agent of an Increase Confirmation from the relevant Increase Lender; and |
(b) | in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase the performance by the Facility Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Facility Agent shall promptly notify to the Company and the Increase Lender. |
2.2.3 | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective. |
2.2.4 | Unless the Facility Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Company shall, on the date upon which the increase takes effect, pay to the Facility Agent (for its own account) a fee of £1,750 and the Company shall promptly on demand pay the Facility Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.2. |
2.2.5 | The Company may pay to the Increase Lender a fee in the amount and at the times agreed between the Company and the Increase Lender in a letter between the Company and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph. |
2.2.6 | Clause 29.4 (Limitation of responsibility of Existing Lender) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: |
(a) | an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase; |
(b) | the "New Lender" were references to that "Increase Lender"; and |
(c) | a "re‑transfer" and "re-assignment" were references to respectively a "transfer" and "assignment"." |
2.2.7 | Each Party (other than the Increase Lender) irrevocably authorises the Facility Agent to execute any duly completed Increase Confirmation on its behalf. |
2.3 | Nature of a Finance Party's rights and obligations |
2.3.1 | the obligations of a Finance Party under the Finance Documents are several; |
2.3.2 | failure by a Finance Party to perform its obligations does not affect the obligations of any other Party under the Finance Documents; |
2.3.3 | no Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents; |
2.3.4 | the rights of a Finance Party under the Finance Documents are separate and independent rights; |
2.3.5 | a debt arising under the Finance Documents to a Finance Party is a separate and independent debt; and |
2.3.6 | a Finance Party may, except as otherwise stated in the Finance Documents, separately enforce those rights. |
3. | PURPOSE |
3.1 | Purpose |
3.2 | No obligation to monitor |
4. | CONDITIONS PRECEDENT |
4.1 | Conditions precedent documents |
4.2 | Further conditions precedent |
4.2.1 | the Repeating Representations are correct in all material respects; and |
4.2.2 | no Default or, in the case of a Rollover Loan, no Event of Default is outstanding or would result from the Loan. |
4.3 | Conditions relating to Optional Currencies |
4.3.1 | A currency will constitute an Optional Currency in relation to a Loan if: |
(a) | it is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market on the Quotation Day and the Drawdown Date for that Loan; and |
(b) | it is euros or U.S. Dollars or has been approved by the Facility Agent (acting on the instructions of all the Lenders) on or prior to receipt by the Facility Agent of the relevant Request for that Loan. |
4.3.2 | If the Facility Agent has received a written request from the Company for a currency to be approved under paragraph (b) of sub-clause 4.3.1 above, the Facility Agent will confirm to the Company by the Specified Time: |
(a) | whether or not the Lenders have granted their approval; and |
(b) | if approval has been granted, the minimum amount (and, if required, integral multiples) for any subsequent Loan in that currency. |
4.4 | Maximum number |
5. | UTILISATION |
5.1 | Giving of Requests |
5.1.1 | The Company may borrow a Loan by giving to the Facility Agent a duly completed Request not later than the Specified Time. |
5.1.2 | Each Request is irrevocable. |
5.2 | Completion of Requests |
5.2.1 | A Request for a Loan will not be regarded as having been duly completed unless: |
(a) | the Drawdown Date is a Business Day falling within the Availability Period; |
(b) | the currency and amount of the Loan comply with Clause 5.3 (Currency and amount); and |
(c) | the proposed Term complies with this Agreement. |
5.2.2 | Only one Loan may be requested in a Request. |
5.3 | Currency and amount |
5.3.1 | The currency specified in a Request must be either the Base Currency or an Optional Currency. |
5.3.2 | The amount of the proposed Loan must be: |
(a) | if the currency selected is the Base Currency, a minimum of £5,000,000 and an integral multiple of £1,000,000 or, if less, the Available Facility (or such other amount as the Facility Agent may agree); or |
(b) | if the currency selected is an Optional Currency, the minimum amount (and if required, integral multiple) specified by the Facility Agent pursuant to paragraph (b) of sub-clause 4.3.2 of Clause 4.3 (Conditions relating to Optional Currencies) or, if less, the Available Facility. |
5.4 | Advance of Loan |
5.4.1 | The Facility Agent must promptly notify each Lender of the details of the requested Loan and the amount of its share in that Loan. |
5.4.2 | If the conditions set out in this Agreement have been met, and subject to Clause 9.2 (Cashless Rollover), each Lender shall make its participation in each Loan available no later than 2.00 pm on the Drawdown Date through its Facility Office. |
5.4.3 | Save as set out in sub-clause 5.4.4 below, the amount of each Lender's share of the Loan will be its Pro Rata Share on the proposed Drawdown Date. |
5.4.4 | If a Loan is made to repay Ancillary Outstandings, each Lender's participation in that Loan will be in an amount (as determined by the Facility Agent) which will result as nearly as possible in the aggregate amount of its participation in the Loans then outstanding bearing the same proportion to the aggregate amount of the Loans then outstanding as its Commitment bears to the Total Commitments. |
5.4.5 | No Lender is obliged to participate in a Loan if as a result: |
(a) | the Base Currency Amount of its share in the aggregate amount of the Loans would exceed its Commitment; or |
(b) | the Base Currency Amount of the Loans would exceed the Total Commitments. |
5.4.6 | The Facility Agent shall determine the Base Currency Amount of each Loan which is to be made in an Optional Currency and shall notify each Lender of the amount, currency and the Base Currency Amount of each Loan, the amount of its participation in that Loan and, if different, the amount of that participation to be made available in accordance with Clause 17 (Payments), in each case by the Specified Time. |
6. | EXTENSION OPTION |
6.1 | The Company may by notice to the Facility Agent (the Initial Extension Request) not more than 60 days and not less than 30 days before the first anniversary of the date of the Amendment Agreement (the First Anniversary), request that the Final Maturity Date be extended for a further period of one year. |
6.2 | The Company may by notice to the Facility Agent (the Second Extension Request) no more than 60 days and not less than 30 days before the second anniversary of the date of the Amendment Agreement (the Second Anniversary), request that the Final Maturity Date: |
(a) | with respect to Lenders who have agreed to the Initial Extension Request, be extended for a further period of one year; and/or |
(b) | if no Initial Extension Request has been made, or with respect to Lenders who refused the Initial Extension Request: |
(i) | be extended for a period of one year; or |
(ii) | be extended for a period of two years, |
6.3 | The Facility Agent must promptly notify the Lenders of any Initial Extension Request or Second Extension Request (an Extension Request). |
6.4 | Each Lender may, in its sole discretion, agree to any Extension Request. Each Lender that agrees to an Extension Request by the date falling 15 days before, the relevant anniversary of the date of this Agreement, will extend its Commitment for a further period of one year or two years, as set out in the relevant Extension Request, from the then current Final Maturity Date and the Final Maturity Date of that Lender will be extended accordingly. |
6.5 | If any Lender fails to reply to an Extension Request on or before the date falling 15 days before the relevant anniversary of the date of this Agreement, it will be deemed to have refused that Extension Request and its Commitment will not be extended. |
6.6 | Subject to Clause 6.8 below, each Extension Request is irrevocable. |
6.7 | If one or more (but not all) of the Lenders agree to an Extension Request, then the Facility Agent must notify the Company and the Lenders which have agreed to the extension, identifying in that notification which Lenders have not agreed to the Extension Request. |
6.8 | The Company may, on the basis that one or more of the Lenders have not agreed to the Extension Request and no later than the date falling 5 days before the relevant anniversary of the date of this Agreement, withdraw the request by notice to the Facility Agent which will promptly notify the Lenders. |
7. | OPTIONAL CURRENCIES |
7.1 | Selection |
7.1.1 | The Company must select the currency of a Loan in its Request. The Company may select the Base Currency or an Optional Currency for a Loan. |
7.1.2 | Unless the Facility Agent otherwise agrees, the Loans may not be denominated at any one time in more than three currencies. |
7.2 | Revocation of currency |
7.2.1 | Notwithstanding any other term of this Agreement, if before the Specified Time on any Quotation Day the Facility Agent receives notice from a Lender that: |
(a) | the Optional Currency requested is not readily available to it in the relevant interbank market in the amount and for the period required; or |
(b) | participating in a Loan in the proposed Optional Currency might contravene any law or regulation applicable to it, |
7.2.2 | In this event: |
(a) | that Lender must participate in the Loan in the Base Currency (in an amount equal to that Lender's proportion of the Base Currency Amount or, in respect of a Rollover Loan, an amount equal to that Lender's proportion of the Base Currency Amount of the Rollover Loan that is due to be made); and |
(b) | the share of that Lender in the Loan and any other similarly affected Lender(s) will be treated as a separate Loan denominated in the Base Currency during that Term. |
7.2.3 | Any part of a Loan treated as a separate Loan under this sub-clause will not be taken into account for the purposes of any limit on the number of Loans or currencies outstanding at any one time. |
7.2.4 | A Loan will still be treated as a Rollover Loan if it is not denominated in the same currency as the maturing Loan by reason only of the operation of this sub-clause. |
7.3 | Optional Currency equivalents |
7.3.1 | whether any limit under this Agreement has been exceeded; |
7.3.2 | the amount of a Loan; |
7.3.3 | the share of a Lender in a Loan; |
7.3.4 | the amount of any repayment of a Loan; or |
7.3.5 | the undrawn amount of a Lender's Commitment, |
8. | ANCILLARY FACILITIES |
8.1 | Type of Facility |
8.1.1 | a multicurrency overdraft facility; |
8.1.2 | a multicurrency guarantee, bonding, documentary or stand-by letter of credit facility; |
8.1.3 | a short term multicurrency loan facility; |
8.1.4 | a derivatives facility; |
8.1.5 | a foreign exchange facility; or |
8.1.6 | any other multicurrency facility or accommodation required in connection with the business of the Group and which is agreed by the Company with an Ancillary Lender. |
8.2 | Availability |
8.2.1 | If the Company and a Lender agree and except as otherwise provided in this Agreement, the Lender may provide all or part of its Commitment as an Ancillary Facility. |
8.2.2 | An Ancillary Facility shall not be made available unless, not later than three Business Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Facility Agent has received from the Company: |
(a) | a notice in writing of the establishment of an Ancillary Facility and specifying: |
(i) | the proposed Ancillary Commencement Date and expiry date of the Ancillary Facility; |
(ii) | the proposed type of Ancillary Facility to be provided; |
(iii) | the proposed Ancillary Lender; |
(iv) | the proposed Ancillary Commitment, the maximum amount of the Ancillary Facility and, in the case of a Multi‑account Overdraft, its Designated Gross Amount and its Designated Net Amount; |
(v) | the proposed currency of the Ancillary Facility (if not denominated in the Base Currency); and |
(b) | any other information which the Facility Agent may reasonably request in connection with the Ancillary Facility. |
8.2.3 | The Facility Agent shall promptly notify the Ancillary Lender and the other Lenders of the establishment of an Ancillary Facility. |
8.2.4 | Subject to compliance with sub-clause 8.2.2 above: |
(a) | the Lender concerned will become an Ancillary Lender; and |
(b) | the Ancillary Facility will be available, |
8.3 | Terms of Ancillary Facilities |
8.3.1 | Except as provided below, the terms of any Ancillary Facility will be those agreed by the Ancillary Lender and the Company. |
8.3.2 | Those terms: |
(a) | must be based upon normal commercial terms at that time (except as varied by this Agreement); |
(b) | may only allow the Company to use the Ancillary Facility; |
(c) | may not allow the Ancillary Outstandings to exceed the Ancillary Commitment; |
(d) | may not allow the Ancillary Commitment of a Lender to exceed the Available Commitment of that Lender (before taking into account the effect of the Ancillary Facility on that Available Commitment); and |
(e) | must require that the Ancillary Commitment is reduced to nil, and that all Ancillary Outstandings are repaid not later than the Final Maturity Date (or such earlier date as the Commitment of the relevant Ancillary Lender (or its Affiliate) is reduced to zero). |
8.3.3 | If there is any inconsistency between any term of an Ancillary Facility and any term of this Agreement, this Agreement shall prevail except for (i) Clause 24.3 (Calculations) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Ancillary Facility; (ii) an Ancillary Facility comprising more than one account where the terms of the Ancillary Documents shall prevail to the extent required to permit the netting of balances on those accounts; and (iii) where the relevant term of this Agreement would be contrary to, or inconsistent with, the law governing the relevant Ancillary Document, in which case that term of this Agreement shall not prevail. |
8.3.4 | Interest, commission and fees on Ancillary Facilities are dealt with in Clause 25.6 (Interest, commission and fees on Ancillary Facilities). |
8.4 | Repayment of Ancillary Facility |
8.4.1 | An Ancillary Facility shall cease to be available on the Final Maturity Date or such earlier date on which its expiry date occurs or on which it is cancelled in accordance with the terms of this Agreement. |
8.4.2 | If an Ancillary Facility expires or is cancelled in accordance with its terms the Ancillary Commitment of the Ancillary Lender shall be reduced to zero. |
8.4.3 | No Ancillary Lender may demand repayment or prepayment of any Ancillary Outstandings prior to the expiry date of the relevant Ancillary Facility unless: |
(a) | required to reduce the Permitted Gross Outstandings of a Multi-account Overdraft to or towards an amount equal to its Designated Net Amount; |
(b) | the Total Commitments have been cancelled in full, or all outstanding Loans have become due and payable in accordance with the terms of this Agreement; |
(c) | it becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in its Ancillary Facility (or it becomes unlawful for any Affiliate of the Ancillary Lender for the Ancillary Lender to do so); or |
(d) | both: |
(i) | the Available Commitments; and |
(ii) | the notice of the demand given by the Ancillary Lender, |
8.4.4 | If a Loan is made to repay Ancillary Outstandings in full, the relevant Ancillary Commitment shall be reduced to zero. |
8.5 | Limitations on Ancillary Outstandings |
8.5.1 | the Ancillary Outstandings under any Ancillary Facility shall not exceed the Ancillary Commitment applicable to that Ancillary Facility; and |
8.5.2 | in relation to a Multi-account Overdraft: |
(a) | the Ancillary Outstandings shall not exceed the Designated Net Amount applicable to that Multi-account Overdraft; and |
(b) | the Gross Outstandings shall not exceed the Designated Gross Amount applicable to that Multi-account Overdraft. |
8.6 | Information |
8.7 | Affiliates of Lenders as Ancillary Lenders |
8.7.1 | Subject to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender. In such case, the Lender and its Affiliate shall be treated as a single Lender whose Commitment is the amount set out opposite the relevant Lender's name in Schedule 1 (Original Parties) and/or the amount of any Commitment transferred to or assumed by that Lender under this Agreement, to the extent (in each case) not cancelled, reduced or transferred by it under this Agreement. |
8.7.2 | The Company shall specify any relevant Affiliate of a Lender in any notice delivered by the Company to the Facility Agent pursuant to paragraph 8.2.2(a) of Clause 8.2 (Availability). |
8.7.3 | If a Lender assigns all of its rights and benefits or transfers all of its rights and obligations to a New Lender, its Affiliate shall cease to have any obligations under this Agreement or any Ancillary Document. |
8.7.4 | Where this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that document, the relevant Lender shall ensure that the obligation is performed by its Affiliate. |
8.8 | Commitment amounts |
8.9 | Amendments and Waivers – Ancillary Facilities |
9. | REPAYMENT |
9.1 | Repayment of Loans |
9.1.1 | The Company must repay each Loan in full on its Maturity Date. No Loan may be outstanding after the Final Maturity Date. |
9.1.2 | Subject to the other terms of this Agreement, any amounts repaid under sub-clause 9.1.1 above may be re-borrowed. |
9.2 | Cashless Rollover |
9.2.1 | Without prejudice to the Company's obligation under Clause 9.1 above, if one or more Loans are to be made available to the Company: |
(a) | on the same day that a maturing Loan is due to be repaid by the Company; |
(b) | in the same currency as the maturing Loan (unless it arose as a result of the operation of Clause 7.2 (Revocation of currency); and |
(c) | in whole or in part for the purpose of refinancing the maturing Loan, |
(i) | if the amount of the maturing Loan exceeds the aggregate amount of the new Loans: |
(A) | the Company will only be required to pay an amount in cash in the relevant currency equal to that excess; and |
(B) | each Lender's participation (if any) in the new Loans shall be treated as having been made available and applied by the Company in or towards repayment of that Lender's participation (if any) in the maturing Loan and that Lender will not be required to make its participation in the new Loans available in cash; and |
(ii) | if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans: |
(A) | the Company will not be required to make any payment in cash; and |
(B) | each Lender will be required to make its participation in the new Loans available in cash only to the extent that its participation (if any) in the new Loans exceeds that Lender's participation (if any) in the maturing Loan and the remainder of that Lender's participation in the new Loans shall be treated as having been made available and applied by the Company in or towards repayment of that Lender's participation in the maturing Loan. |
10. | PREPAYMENT AND CANCELLATION |
10.1 | Mandatory prepayment - illegality |
10.1.1 | A Lender must notify the Company promptly if it becomes aware that it is unlawful in any jurisdiction for that Lender to perform any of its obligations under a Finance Document or to fund or maintain its share in any Loan. |
10.1.2 | After notification under clause 10.1.1 above: |
(a) | the Company must repay or prepay the share of that Lender in each Loan made to it on the date specified in clause 10.1.3 below; and |
(b) | the Commitments of that Lender will be immediately cancelled. |
10.1.3 | The date for repayment or prepayment of a Lender's share in a Loan will be: |
(a) | the Business Day following receipt by the Company of notice from the Lender under sub-clause 10.1.1 above; or |
(b) | if later, the latest date allowed by the relevant law. |
10.2 | Mandatory prepayment - change of control |
10.2.1 | within five days of such date, the Company shall give notice of such change of control to the Facility Agent; |
10.2.2 | the Lenders and the Company shall immediately enter into negotiations for a period of not more than 45 days from the date of the change of control with a view to agreeing whether the Facility shall continue to be made available and on what terms; |
10.2.3 | if no such agreement is reached within the said period of 45 days then: |
(a) | any Lender may on 10 days' notice to the Facility Agent and to the Company require the repayment of its share in each Loan and the repayment of its Ancillary Outstandings and cancel its Commitment; and |
(b) | the Majority Lenders may on 10 days' notice to the Company require repayment in full of all outstanding Loans and Ancillary Outstandings and cancel the Total Commitments; and |
10.2.4 | a Lender shall not be obliged to fund any further loans under the Facility (except for a Rollover Loan) during the negotiation period set out in sub-clause 10.2.2, and if no agreement is reached within such negotiation period, during the 10 day notice period set out in sub-clause 10.2.3. |
10.3 | Voluntary prepayment |
10.3.1 | The Company may, by giving not less than five Business Days' prior written notice to the Facility Agent, prepay any Loan at any time in whole or in part. |
10.3.2 | A prepayment of part of a Loan drawn in US Dollars must be in a minimum amount of $5,000,000 and an integral multiple of U.S. $1,000,000. |
10.3.3 | A prepayment of part of a Loan drawn in Sterling must be in a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
10.3.4 | A prepayment of part of a Loan drawn in euros must be in a minimum amount of €5,000,000 and an integral multiple of €1,000,000. |
10.4 | Automatic cancellation |
10.5 | Voluntary cancellation |
10.5.1 | The Company may, by giving not less than three Business Days' prior written notice to the Facility Agent, cancel the unutilised amount of the Total Commitments in whole or in part. |
10.5.2 | Partial cancellation of the Total Commitments must be in a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
10.5.3 | Any cancellation in part shall be applied against the Commitment of each Lender pro rata. |
10.6 | Involuntary prepayment and cancellation |
10.6.1 | If the Company is, or will be, required to pay to a Lender a Tax Payment or an Increased Cost, the Company may, while the requirement continues, give notice to the Facility Agent requesting prepayment and cancellation in respect of that Lender. |
10.6.2 | After notification under sub-clause 10.6.1 above: |
(a) | the Company must repay or prepay that Lender's share in each Loan made to it on the date specified in sub-clause 10.6.3 below; and |
(b) | the Commitments of that Lender will be immediately cancelled. |
10.6.3 | The date for repayment or prepayment of a Lender's share in a Loan will be the last day of the current Term for that Loan or, if earlier, the date specified by the Company in its notification. |
10.6.4 |
(a) | If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent 5 Business Days' notice of cancellation of the Available Commitment of that Lender. |
(b) | On the notice referred to in paragraph (a) above becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero. |
(c) | The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders. |
10.7 | Re-borrowing of Loans |
10.8 | Miscellaneous provisions |
10.8.1 | Any notice of prepayment and/or cancellation under this Agreement is irrevocable and must specify the relevant date(s) and the affected Loans and Commitments. The Facility Agent must notify the Lenders promptly of receipt of any such notice. |
10.8.2 | All prepayments made under Clause 10.2 (Mandatory prepayment - change of control) shall be applied pro rata to each Lender's participation in such Loan. |
10.8.3 | All prepayments under this Agreement must be made with accrued interest on the amount prepaid. No premium or penalty is payable in respect of any prepayment except for Break Costs. |
10.8.4 | The Majority Lenders may agree a shorter notice period for a voluntary prepayment or a voluntary cancellation. |
10.8.5 | No prepayment or cancellation is allowed except in accordance with the express terms of this Agreement. |
10.8.6 | Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may subsequently be reinstated. |
11. | INTEREST |
11.1 | Calculation of interest |
11.1.1 | Margin; and |
11.1.2 | LIBOR or, in relation to any Loan in euro, EURIBOR. |
11.2 | Payment of interest |
11.3 | Interest on overdue amounts |
11.3.1 | If the Company fails to pay any amount payable by it under the Finance Documents, it must immediately on demand by the Facility Agent pay interest on the overdue amount from its due date up to the date of actual payment, both before, on and after judgment. |
11.3.2 | Interest on an overdue amount is payable at a rate determined by the Facility Agent to be one per cent. per annum above the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount. For this purpose, the Facility Agent may (acting reasonably): |
(a) | select successive Terms of any duration of up to three months; and |
(b) | determine the appropriate Quotation Day for that Term. |
11.3.3 | Notwithstanding sub-clause 11.3.2 above, if the overdue amount is a principal amount of a Loan and becomes due and payable prior to the last day of its current Term, then: |
(a) | the first Term for that overdue amount will be the unexpired portion of that Term; and |
(b) | the rate of interest on the overdue amount for that first Term will be one per cent. per annum above the rate then payable on that Loan. |
11.3.4 | Interest (if unpaid) on an overdue amount will be compounded with that overdue amount at the end of each of its Terms but will remain immediately due and payable. |
11.4 | Notification of rates of interest |
12. | TERMS |
12.1 | Selection |
12.1.1 | Each Loan has one Term only. |
12.1.2 | The Company must select the Term for a Loan in the relevant Request. |
12.1.3 | Subject to the following provisions of this Clause, each Term for a Loan will be one, two, three or six months or for a period of one to thirty days or any other period agreed between the Company and the Lenders. |
12.1.4 | The Company shall not use its right under paragraph 12.1.3 above to select for a Loan a Term of less than one month's duration more than six times in any calendar year. |
12.1.5 | A Term for a Loan shall start on the Drawdown Date for that Loan. |
12.2 | No overrunning the Final Maturity Date |
12.3 | Other adjustments |
12.3.1 | The Facility Agent and the Company may enter into such other arrangements as they may agree for the adjustment of Terms and the consolidation and/or splitting of Loans. |
12.3.2 | Subject to Clause 12.3.3 below, if two or more Terms end on the same date, those Loans will, unless the Company specifies to the contrary in the Request for the next Term, be consolidated into, and treated as, a single Loan on the last day of the Term. |
12.3.3 | Subject to Clause 4.4 (Maximum Number) and Clause 5.2 (Completion of Requests) if the Company requests in a Request that a Loan be divided into two or more Loans, that Loan will, on the last day of its Term, be so divided into the Base Currency Amounts specified in that Request, having an aggregate Base Currency Amount equal to the Base Currency Amount of the Loan immediately before its division. |
12.4 | Notification |
13. | MARKET DISRUPTION |
13.1 | Failure of a Reference Bank to supply a rate |
13.2 | Market disruption |
13.2.1 | In this Clause, each of the following events is a market disruption event: |
(a) | at or about noon on the Quotation Day for the relevant Term, LIBOR or if applicable EURIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR or, if applicable, EURIBOR for the relevant currency and Term; or |
(b) | before close of business in London on the Quotation Day for the relevant Term, the Facility Agent receives notification from a Lender or Lenders whose participations in the relevant Loan exceed 50% of that Loan that the cost to it (or them) of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR or, if applicable, EURIBOR for the relevant Term. |
13.2.2 | The Facility Agent must promptly notify the Company and the Lenders of a market disruption event. |
13.2.3 | After notification under sub-clause 13.2.1(a) above, the rate of interest on each Lender's share in the affected Loan for the relevant Term will be the aggregate of the applicable: |
(a) | Margin; and |
(b) | rate notified to the Facility Agent by that Lender as soon as practicable, and in any event before interest is due to be paid in respect of that Term, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its share in that Loan from whatever source it may reasonably select. |
13.3 | Alternative basis of interest or funding |
13.3.1 | If a market disruption event occurs and the Facility Agent or the Company so requires, the Company and the Facility Agent must enter into negotiations for a period of not more |
13.3.2 | Any alternative basis agreed will be, with the prior consent of all the Lenders, binding on all the Parties. |
14. | TAX GROSS-UP AND INDEMNITIES |
14.1 | Definitions |
14.1.1 | In this Agreement: |
(a) | a Lender (other than a Lender within paragraph (b) below) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is: |
(i) | a Lender: |
(A) | which is a bank (as defined for the purpose of section 879 of ITA) making an advance under a Finance Document; or |
(B) | in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of ITA) at the time that that advance was made,and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or |
(ii) | a Lender which is: |
(A) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(B) | a partnership each member of which is: |
(1) | a company so resident in the United Kingdom; or |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(C) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or |
(iii) | a Treaty Lender; or |
(b) | a Lender which is a building society (as defined for the purpose of section 880 of ITA) making an advance under a Finance Document. |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company. |
(a) | is treated as a resident of a Treaty State for the purposes of the Treaty; |
(b) | does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively connected; and |
(c) | meets all other conditions which must be met under the Treaty for residents of such Treaty State to obtain full exemption from tax on interest imposed by the United Kingdom, except that for this purpose it shall be assumed that the following are satisfied: |
(i) | any condition which relates (expressly or by implication) to the amounts or terms of any Loan or the Finance Documents or any condition which relates (expressly or by implication) to there not being a special relationship between the Company and the Finance Party or between them both and another person; and |
(ii) | any necessary procedural formality. |
14.1.2 | Unless a contrary indication appears, in this Clause 14 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination. |
14.2 | Tax gross-up |
14.2.1 | The Company shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
14.2.2 | The Company shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Company. |
14.2.3 | If a Tax Deduction is required by law to be made by the Company, the amount of the payment due from the Company shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
14.2.4 | A payment shall not be increased under sub-clause 14.2.3 above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due: |
(a) | the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or |
(b) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | an officer of HM Revenue & Customs has given (and not revoked) a direction (a "Direction") under section 931 of the ITA which relates to the payment and that Lender has received from the Company a certified copy of that Direction; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or |
(c) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | the relevant Lender has not given a Tax Confirmation to the Company; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Company |
(d) | the relevant Lender is a Treaty Lender and the Company making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under sub-clause 14.2.7 below. |
14.2.5 | If the Company is required to make a Tax Deduction, the Company shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
14.2.6 | Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Company making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment a statement under Section 975 of the ITA, or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. |
(a) | Subject to paragraph (b) below, a Treaty Lender and the Company which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Company to obtain authorisation to make that payment without a Tax Deduction. |
(b) | Nothing in paragraph (a) above shall require a Treaty Lender to: |
(i) | register under the HMRC DT Treaty Passport scheme; |
(ii) | apply the HMRC DT Treaty Passport scheme to any Loan if it has so registered; or |
(iii) | file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph 14.2.10 below or paragraph 14.6.1 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation) and the Company making that payment has not complied with its obligations under paragraph 14.2.11 below or paragraph 14.6.2 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation). |
14.2.8 | A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is entered into gives a Tax Confirmation to the Company by entering into this Agreement. |
14.2.9 | A UK Non-Bank Lender shall promptly notify the Company and the Facility Agent if there is any change in the position from that set out in the Tax Confirmation. |
14.2.10 | A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Company) by including its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1 (Original Parties). |
14.2.11 | Where a Lender includes the indication described in paragraph 14.2.10 above in Schedule 1 (Original Parties), the Company shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing provided that the Company shall not be liable in respect of any non-compliance with its obligations under this Clause 14.2.11 where such non-compliance is due to circumstances beyond the control of the Company (including, without limitation, any delay, failure or omission on the part of the relevant Lender or the Facility Agent to comply with any obligation owed to the Company, or to any inaccuracy in any information provided by the relevant Lender or the Facility Agent in connection with the DT Treaty Passport scheme). |
14.2.12 | Any Lender which has confirmed that it is entitled to use its DT Treaty Passport in accordance with Clause 14.2.10 or Clause 14.6.1 will reasonably promptly notify the Facility Agent and the Company if at any time it ceases to holds a passport under the HMRC DT Treaty Passport scheme or if it ceases to be able to use such passport as a Lender. |
14.2.13 | If a Lender has not included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with sub-clause 14.2.10 above or sub-clause 14.6.1 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation), the Company shall not file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment or its participation in any Loan. |
14.3 | Tax indemnity |
14.3.1 | Except as provided below, the Company must, within three Business Days of demand, indemnify a Finance Party against any loss or liability which that Finance Party (in its absolute discretion) determines will be or has been suffered (directly or indirectly) by that Finance Party for or on account of Tax in relation to a payment received or receivable (or any payment deemed to be received or receivable) under a Finance Document. |
14.3.2 | Sub-clause 14.3.1 above does not apply to any Tax assessed on a Finance Party under the laws of the jurisdiction in which: |
(a) | that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(b) | that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
14.3.3 | Sub-clause 14.3.1 above does not apply to any Tax assessed on a Finance Party to the extent the loss or liability: |
(a) | is compensated for by an increased payment under Clause 14.2 (Tax gross-up); |
(b) | would have been compensated for by an increased payment under Clause 14.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in Clause 14.2 (Tax gross-up) applied; or |
(c) | relates to a FATCA Deduction required to be made by a Party. |
14.3.4 | A Finance Party making, or intending to make, a claim under sub-clause 14.3.1 above must promptly notify the Company of the event which will give, or has given, rise to the claim. |
14.4 | Tax Credit |
14.5 | Lender Status Confirmation |
14.5.1 | not a Qualifying Lender; |
14.5.2 | a Qualifying Lender (other than a Treaty Lender); or |
14.5.3 | a Treaty Lender. |
14.6 | HMRC DT Treaty Passport scheme confirmation |
14.6.1 | A New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Company) in the Transfer Certificate or Increase Confirmation which it executes by including its scheme reference number and its jurisdiction of tax residence in that Transfer Certificate or Increase Confirmation. |
14.6.2 | Where a New Lender includes the indication described in sub-clause 14.6.1 above in the relevant Transfer Certificate or Increase Confirmation the Company shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the relevant Transfer Date and shall promptly provide the Lender with a copy of that filing. |
14.7 | Stamp taxes |
14.8 | VAT |
14.8.1 | All amounts set out, or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to sub-clause 14.8.2 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party). |
14.8.2 | If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Subject Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT. |
14.8.3 | Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. |
14.8.4 | Any reference in this Clause 14.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994). |
14.9 | FATCA Information |
14.9.1 | Subject to sub-clause 14.9.3 below, each Party shall, within ten Business Days of a reasonable request by another Party: |
(a) | confirm to that other Party whether it is: |
(i) | a FATCA Exempt Party; or |
(ii) | not a FATCA Exempt Party; and |
(b) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; |
(c) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime. |
14.9.2 | If a Party confirms to another Party pursuant to paragraph (a) of sub-clause 14.9.1 above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
14.9.3 | Sub-clause 14.9.1 above shall not oblige any Finance Party to do anything, and paragraph (c) of sub-clause 14.91. above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(a) | any law or regulation; |
(b) | any fiduciary duty; or |
(c) | any duty of confidentiality. |
14.9.4 | If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a) or (b) of sub-clause 14.9.1 above (including, for the avoidance of doubt, where sub-clause 14.9.3 above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
14.10 | FATCA Deduction |
14.10.1 | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction, or otherwise compensate the recipient of the payment for that FATCA Deduction. |
14.10.2 | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Company, the Facility Agent and the other Finance Parties. |
15. | INCREASED COSTS |
15.1 | Increased Costs |
15.1.1 | the introduction of, or any change in, or any change in the interpretation or application of, any law or regulation; |
15.1.2 | compliance with any law or regulation made after the date of this Agreement provided that for the purposes of this Agreement and any other Finance Document, Dodd-Frank shall be deemed to be a law or regulation made after the date of this Agreement; or |
15.1.3 | the implementation or application of, or compliance with, Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV. |
15.2 | Exceptions |
15.2.1 | compensated for under another Clause or would have been but for an exception to that Clause; |
15.2.2 | a Tax on the overall net income of a Finance Party or any of its Affiliates; |
15.2.3 | attributable to a FATCA Deduction required to be made by a Party; |
15.2.4 | attributable to a Finance Party or its Affiliate wilfully failing to comply with any law or regulation; |
15.2.5 | attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates); or |
15.2.6 | not notified by the relevant Finance Party to the Facility Agent and the Company within three Months of that Finance Party becoming aware of such Increased Cost. |
15.3 | Claims |
16. | MITIGATION |
16.1 | Mitigation |
16.1.1 | Each Finance Party must, in consultation with the Company (other than upon the occurrence of an event referred to at paragraph (d) below where no such consultation is required), take all reasonable steps to mitigate any circumstances which arise and which result or would result in the Facility ceasing to be available or: |
(a) | any Tax Payment or Increased Cost being payable to that Finance Party; |
(b) | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
(c) | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; or |
(d) | the occurrence of any market disruption event, |
16.1.2 | A Finance Party is not obliged to take any step under this Clause 16 if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
16.1.3 | Each Finance Party must promptly notify the Company of any circumstances as described in paragraphs (a) to (d) of sub-clause 16.1.1 of this Clause 16.1. |
16.1.4 | The Company must indemnify each Finance Party for all costs and expenses reasonably incurred by it as a result of any step taken under this Clause 16.1. |
16.1.5 | This Clause does not in any way limit the obligations of the Company under the Finance Documents. |
16.2 | Substitution |
16.2.1 | any Tax Payment or Increased Cost being payable to that Finance Party; |
16.2.2 | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
16.2.3 | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; |
16.2.4 | the occurrence of any market disruption event; or |
16.2.5 | any Lender becoming a Non-Consenting Lender, |
16.2.6 | the Company shall have no right to replace the Facility Agent; |
16.2.7 | neither the Facility Agent nor such Finance Party shall have any obligation to the Company to find a Replacement Finance Party; |
16.2.8 | the transfer must take place no later than 14 days after the notice referred to above; |
16.2.9 | in no event shall such Finance Party be required to pay or surrender to the Replacement Finance Party any of the fees received by such Finance Party pursuant to the Finance Documents; and |
16.2.10 | the Finance Party shall only be obliged to transfer its rights and obligations pursuant to this Clause 16.2 once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Finance Party. |
16.3 | Conduct of business by a Finance Party |
16.3.1 | interfere with the right of any Finance Party to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit or oblige any Finance Party to investigate or claim any Tax Credit; or |
16.3.2 | oblige any Finance Party to disclose any information relating to its affairs (Tax or otherwise) or any computation in respect of Tax. |
17. | PAYMENTS |
17.1 | Place |
17.1.1 | in the principal financial centre of the country of the relevant currency; or |
17.1.2 | in the case of euro, in the principal financial centre of a Participating Member State or London, |
17.2 | Funds |
17.3 | Distribution |
17.3.1 | Each payment received by the Facility Agent under the Finance Documents for another Party must, except as provided below, be made available by the Facility Agent to that Party by payment (as soon as practicable after receipt) to its account with such office or bank: |
(a) | in the principal financial centre of the country of the relevant currency; or |
(b) | in the case of euro, in the principal financial centre of a Participating Member State or London, |
17.3.2 | The Facility Agent may apply any amount received by it for the Company in or towards payment (as soon as practicable after receipt) of any amount due from the Company under the Finance Documents or in or towards the purchase of any amount of any currency to be so applied. |
17.3.3 | Where a sum is paid to the Facility Agent under this Agreement for another Party, the Facility Agent is not obliged to pay that sum to that Party until it has established that it has actually received it. However, the Facility Agent may assume that the sum has been paid to it, and, in reliance on that assumption, make available to that Party a corresponding amount. If it transpires that the sum has not been received by the Facility Agent, that Party must immediately on demand by the Facility Agent refund any corresponding amount made available to it together with interest on that amount from the date of payment to the date of receipt by the Facility Agent at a rate calculated by the Facility Agent to reflect its cost of funds. |
17.4 | Currency of account |
17.4.1 | Unless a Finance Document specifies that payments under it are to be made in a different manner, the currency of each amount payable under the Finance Documents is determined under this Clause. |
17.4.2 | Interest is payable in the currency in which the relevant amount in respect of which it is payable is denominated. |
17.4.3 | A repayment or prepayment of any principal amount (or overdue amount) is payable in the currency in which that principal amount (or overdue amount) is denominated on its due date. |
17.4.4 | Amounts payable in respect of costs and expenses and Taxes are payable in the currency in which they are incurred. |
17.4.5 | Each other amount payable under the Finance Documents is payable in Sterling. |
17.4.6 | Any amount expressed to be payable in a currency other than Sterling shall be paid in that other currency. |
17.5 | No set-off or counterclaim |
17.6 | Business Days |
17.6.1 | If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment will instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not) or whatever day the Facility Agent determines is market practice. |
17.6.2 | During any extension of the due date for payment of any principal (or overdue amount) under this Agreement interest is payable on that principal (or overdue amount) at the rate payable on the original due date. |
17.7 | Impaired Agent |
17.7.1 | If, at any time, the Facility Agent becomes an Impaired Agent, the Company or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with Clause 17.1 (Place) may instead either pay that amount direct to the required recipient or pay that amount to an interest bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Company or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents. |
17.7.2 | All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements. |
17.7.3 | A Party which has made a payment in accordance with this Clause 17.7 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account. |
17.7.4 | Promptly upon the appointment of a successor Facility Agent in accordance with Clause 23.14 (Replacement of the Facility Agent), each Party which has made a payment to a trust account in accordance with this Clause 17.7 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Facility Agent for distribution in accordance with Clause 17.3 (Distribution). |
17.7.5 | For the purposes of this Clause 17.7 only, an Acceptable Bank shall include any bank or financial institution approved by the Facility Agent or, if the Facility Agent is an Impaired Agent, the Majority Lenders. |
17.8 | Partial payments |
17.8.1 | If any Administrative Party receives a payment insufficient to discharge all the amounts then due and payable by the Company under the Finance Documents, the Administrative Party must apply that payment towards the obligations of the Company under the Finance Documents in the following order: |
(a) | first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Administrative Parties under the Finance Documents; |
(b) | secondly, in or towards payment pro rata of any accrued interest or fee due but unpaid under this Agreement; |
(c) | thirdly, in or towards payment pro rata of any principal amount due but unpaid under this Agreement; and |
(d) | fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
17.8.2 | The Facility Agent must, if so directed by all the Lenders, vary the order set out in paragraphs (a) to (d) of sub-clause 17.8.1 of this Clause 17.8. |
17.8.3 | This Clause will override any appropriation made by the Company. |
17.9 | Timing of payments |
18. | REPRESENTATIONS |
18.1 | Representations |
18.2 | Status |
18.3 | Powers and authority |
18.4 | Legal validity |
18.5 | Non-conflict |
18.5.1 | any law or regulation applicable to it and violation of which has or is likely to have a Material Adverse Effect; or |
18.5.2 | its constitutional documents. |
18.6 | No default |
18.6.1 | No Event of Default is outstanding or might reasonably be expected to result from the making of any Loan. |
18.6.2 | No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which might have a Material Adverse Effect. |
18.7 | Authorisations |
18.7.1 | in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents; and |
18.7.2 | to make the Finance Documents admissible in evidence in England and Wales, |
18.8 | Financial statements |
18.8.1 | have been prepared in accordance with accounting principles and practices generally accepted in its jurisdiction of incorporation, consistently applied; and |
18.8.2 | fairly represent its consolidated financial condition as at the date to which they were drawn up, |
18.9 | No material adverse change |
18.10 | Litigation |
18.11 | Winding Up |
18.12 | Non-Violation of other Agreements: |
18.13 | Governing Law and Enforcement |
18.13.1 | The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation. |
18.13.2 | Any judgement obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation. |
18.14 | Deduction of Tax |
18.14.1 | a Qualifying Lender: |
(a) | falling within paragraph (a)(i) of the definition of Qualifying Lender; or |
(b) | except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (a)(ii) of the definition of Qualifying Lender; or |
(c) | falling within paragraph (b) of the definition of Qualifying Lender or; |
18.14.2 | a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488). |
18.15 | No filing or stamp taxes |
18.16 | No misleading information |
18.16.1 | any written factual information provided by any member of the Group or on its behalf was true and accurate in all material respects as at the date of the relevant report or document or as at the date (if any) at which it is stated to be given; |
18.16.2 | the financial projections provided have been prepared on the basis of recent historical information and on the basis of reasonable assumptions as at the date provided; and |
18.16.3 | no event or circumstance has occurred or arisen and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in such written information being untrue or misleading in any material respect. |
18.17 | Pari Passu ranking |
18.18 | Licence |
18.19 | Sanctions |
18.20 | Anti- Corruption |
18.21 | Times for making representations |
18.21.1 | The representations set out in this Clause are made by the Company on the date of this Agreement. |
18.21.2 | The Repeating Representations are deemed to be repeated by the Company on the date of each Request and the first day of each Term. |
18.21.3 | When a representation is repeated, it is applied to the circumstances existing at the time of repetition. |
19. | INFORMATION COVENANTS |
19.1 | Financial statements |
19.1.1 | The Company must supply to the Facility Agent (in sufficient copies for all the Lenders if the Facility Agent so requests): |
(a) | its audited consolidated financial statements for each of its financial years; and |
(b) | its interim consolidated financial statements for the first half-year of each of its financial years. |
19.1.2 | All financial statements must be supplied as soon as they are available and: |
(a) | in the case of the Company's audited consolidated financial statements, within 180 days; and |
(b) | in the case of the Company's interim financial statements, within 90 days, |
19.2 | Form of Financial Statement |
19.2.1 | the Company and the Facility Agent (on behalf of and after consultation with all the Lenders) shall, on the request of the Facility Agent or the Company, negotiate in good faith with a view to agreeing such amendments to the financial ratios and/or the definitions of the terms used in Clause 20 (Financial covenants) as are necessary to give the Lenders comparable protection to that contemplated at the date of this Agreement; |
19.2.2 | if amendments are agreed by the Company and the Majority Lenders within 25 days, those amendments shall take effect in accordance with the terms of that agreement; and |
19.2.3 | if such amendments are not so agreed within 25 days, the Company shall: |
(a) | within 30 days after the end of that 25 day period; and |
(b) | with all subsequent financial statements to be delivered to the Facility Agent under Clause 19.1, |
19.3 | Compliance Certificate |
19.3.1 | The Company must supply to the Facility Agent a Compliance Certificate with each set of its financial statements sent to the Facility Agent under this Agreement. |
19.3.2 | Each Compliance Certificate must be signed by two directors of the Company. |
19.4 | Information - miscellaneous |
19.4.1 | copies of all documents despatched by the Company to its creditors generally (or any class of them) in each case at the same time as they are despatched; |
19.4.2 | promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group and which might, if adversely determined, have a Material Adverse Effect; |
19.4.3 | promptly, details of the loss of the Licence or any communication from OFGEM or other government agency regarding any potential or threatened loss of the Licence; |
19.4.4 | promptly on receiving them, details of any modification of an Authorisation or other material regulatory notices from OFGEM or other government agency; |
19.4.5 | a copy of all material information relating to any matter which is reasonably likely to have a Material Adverse Effect which the Company supplies to, or receives from, any applicable regulatory body (including OFGEM) (at the same time as it is supplied to, or promptly following its receipt from, the applicable regulatory body); |
19.4.6 | written notice of the details of any proposed changes to the Licence as soon as reasonably practicable after becoming aware of the same (other than changes of a formal, minor or technical nature); |
19.4.7 | within 5 Business Days of receiving them, details of any change to the rating by Moody's or Standard & Poor's of the long-term, unsecured and non credit-enhanced debt obligations of the Company; |
19.4.8 | the Company shall deliver to the Facility Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the Company), actuarial reports in relation to all pension schemes mentioned in sub-clause 21.15.1 of Clause 21.15 (Pensions). This obligation shall apply to only those pension schemes (or groups of the Electricity Supply Pension Scheme) of which the Company is at that time a participating employer and to those reports which have been provided to the Company; |
19.4.9 | promptly on request, a list of the then current Material Subsidiaries; and |
19.4.10 | promptly on request, such further information regarding the financial condition, business and operations of the Group as any Finance Party through the Facility Agent may reasonably request. |
19.5 | Notification of Default |
19.5.1 | The Company must notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. |
19.5.2 | Promptly on request by the Facility Agent, the Company must supply to the Facility Agent a certificate signed by two of its directors on its behalf, certifying that no Default is outstanding or, if a Default is outstanding, specifying the Default and the steps, if any, being taken to remedy it. |
19.6 | Use of websites |
19.6.1 | Except as provided below, the Company may deliver any information under this Agreement to a Lender by posting it on to an electronic website if: |
(a) | the Facility Agent and the Lender agree; |
(b) | the Company and the Facility Agent designate an electronic website for this purpose; |
(c) | the Company notifies the Facility Agent of the address of and password for the website; and |
(d) | the information posted is in a format agreed between the Company and the Facility Agent. |
19.6.2 | Notwithstanding the above, the Company must supply to the Facility Agent in paper form a copy of any information posted on the website together with sufficient copies for: |
(a) | any Lender not agreeing to receive information via the website; and |
(b) | any other Lender within ten Business Days of request by that Lender. |
19.6.3 | The Company must promptly upon becoming aware of its occurrence, notify the Facility Agent if: |
(a) | the website cannot be accessed; |
(b) | the website or any information on the website is infected by any electronic virus or similar software; |
(c) | the password for the website is changed; or |
(d) | any information to be supplied under this Agreement is posted on the website or amended after being posted. |
19.7 | Know your customer requirements |
19.7.1 | If: |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(b) | any change in the status of the Company after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
20. | FINANCIAL COVENANTS |
20.1 | Definitions |
(a) | that cash is repayable: |
(i) | if that cash is deposited with a Lender, within 180 days after the relevant date of calculation; or |
(ii) | if that cash is deposited with any other lender or financial institution, within 45 days after the relevant date of calculation; |
(b) | repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition; |
(c) | there is no Security Interest over that cash other than Security Interests permitted under sub-clause 21.5.3(k) of Clause 21.5 (Negative pledge); and |
(d) | the cash is freely and (except as mentioned in paragraph (a) above) immediately available to be applied in repayment or prepayment of the Facility. |
(a) | certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank; |
(b) | any investment in marketable debt obligations issued or guaranteed by the government of an Acceptable Jurisdiction or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; |
(c) | commercial paper not convertible or exchangeable to any other security: |
(i) | for which a recognised trading market exists; |
(ii) | issued by an issuer incorporated in an Acceptable Jurisdiction; |
(iii) | which matures within one year after the relevant date of calculation; and |
(iv) | which has a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
(d) | sterling bills of exchange eligible for rediscount at the Bank of England (or their dematerialised equivalent) and accepted by an Acceptable Bank; |
(e) | any investment in money market funds which: |
(i) | have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited; |
(ii) | which invest substantially all their assets in securities of the types described in paragraphs (a) to (d) above; and |
(iii) | can be turned into cash on not more than 30 days' notice; or |
(f) | any other debt security approved by the Majority Lenders, |
(a) | adding back Interest Payable; |
(b) | taking no account of any exceptional or extraordinary item; |
(c) | excluding any amount attributable to minority interests; |
(d) | adding back depreciation and amortisation; and |
(e) | taking no account of any revaluation of an asset or any loss or gain over book value arising on the disposal of an asset (otherwise than in the ordinary course of trading) by a member of the Group during that Measurement Period. |
20.2 | Interpretation |
20.2.1 | Except as provided to the contrary in this Agreement, an accounting term used in this Clause is to be construed in accordance with the principles applied in connection with the Original Financial Statements. |
20.2.2 | Any amount in a currency other than the Base Currency is to be taken into account at its Base Currency equivalent calculated on the basis of: |
(a) | the Agent's Spot Rate of Exchange on the day the relevant amount falls to be calculated; or |
(b) | if the amount is to be calculated on the last day of a financial period of the Company, the relevant rates of exchange used by the Company in, or in connection with, its financial statements for that period. |
20.2.3 | No item must be credited or deducted more than once in any calculation under this Clause. |
20.3 | Interest cover |
20.4 | Asset Cover |
21. | GENERAL COVENANTS |
21.1 | General |
21.2 | Authorisations |
21.3 | Compliance with laws |
21.4 | Pari passu ranking |
21.5 | Negative pledge |
21.5.1 | Except as provided below, neither the Company nor any Material Subsidiary may create or allow to exist any Security Interest or Quasi-Security Interest on any of its assets. |
21.5.2 | Except as provided below, neither the Company nor any Material Subsidiary may: |
(a) | sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by the Company or any Material Subsidiary; |
(b) | sell, transfer or otherwise dispose of any of its receivables on recourse terms; |
(c) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
(d) | enter into any other preferential arrangement having a similar effect, |
21.5.3 | Sub-clauses 21.5.1 and 21.5.2 do not apply to: |
(a) | any lien arising by operation of law and in the ordinary course of trading; |
(b) | any netting or set-off arrangement entered into by the Company in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances (including a Multi-Account Overdraft) of members of the Group; |
(c) | any Security Interest or Quasi-Security Interest created under or in connection with or arising out of the Balancing and Settlement Code or any transactions or arrangements entered into in connection with the management of risks relating thereto; |
(d) | in respect of overdue amounts which have not been overdue for more than 30 days and/or are being contested in good faith, liens arising solely by operation of law or by order of a court or tribunal (or by an agreement of similar effect) and/or in the ordinary course of day to day business or operations; |
(e) | any Security Interest or Quasi-Security Interest arising out of title retention provisions in a supplier's standard conditions of supply of goods acquired in the ordinary course of business or operations; |
(f) | any Security Interest or Quasi-Security Interest created on any asset acquired after the date of this Agreement for the sole purpose of financing or re-financing that acquisition and securing a principal, capital or nominal amount not exceeding the cost of that acquisition, provided that the Security Interest or Quasi-Security Interest is removed or discharged within 6 months of the date of acquisition of such asset; |
(g) | any Security Interest or Quasi-Security Interest outstanding on or over any asset acquired after the date of this Agreement and in existence at the date of such acquisition, provided that the Security Interest or Quasi-Security Interest is removed or discharged within 6 months of the date of acquisition of such asset; |
(h) | any Security Interest or Quasi-Security Interest created or outstanding on or over any asset of any company which becomes a Material Subsidiary of the Company after the date of this Agreement where such Security Interest or Quasi-Security Interest is created prior to the date on which such company becomes a Material Subsidiary of the Company and is not created or increased in contemplation of such company being acquired and/or becoming a Material Subsidiary of the |
(i) | any Quasi-Security Interest arising as a result of a disposal which is a disposal permitted under sub-clause 21.6.2; |
(j) | any netting arrangements under any swap or other hedging transaction which is on standard market terms; |
(k) | any Security Interest or Quasi-Security Interest over bank accounts of the Company in favour of the account holding bank with whom it maintains a banking relationship in the ordinary course of trade and granted as part of that bank's standard terms and conditions; |
(l) | any Security Interest or Quasi-Security Interest created or outstanding with the prior approval of the Majority Lenders; and |
(m) | any Security Interest or Quasi-Security Interest created or outstanding on or over assets of the Company or any of its Material Subsidiaries provided that the aggregate outstanding principal or nominal amount secured by all Security Interests and Quasi-Security Interest created or outstanding under this exception on or over such assets shall not at any time exceed £25,000,000 or its equivalent. |
21.6 | Disposals |
21.6.1 | Except as provided below, no member of the Group may, either in a single transaction or in a series of transactions and whether related or not, dispose of all or any part of its assets (other than cash) where the higher of the market value and the net consideration receivable (when aggregated with the higher of the market value and the net consideration receivable from any previous disposal by members of the Group) exceeds £5,000,000 (or its equivalent) in total during the term of this Agreement. |
21.6.2 | Sub-clause 21.6.1 does not apply to: |
(a) | any disposal made in the ordinary course of day to day business or operations of the disposing entity (including, without limitation, disposals of subsidiaries or lines of business, provided that this shall not include a disposal of the core electricity distribution business); |
(b) | disposals on normal commercial terms of obsolete assets or assets no longer required for the purpose of the relevant Person's business or operations; |
(c) | any realisation of investments acquired, purchased or made by the temporary application of funds not immediately required in the relevant Person's business or operations; |
(d) | the exchange of assets for other assets of a similar or superior nature and value, or the sale of assets on normal commercial terms for cash which is payable in full on the completion of the sale and is to be, and is, applied in or towards the purchase of similar assets within 12 months of that disposal (or, if contractually committed to be used within 12 months, are actually used within 18 months of that disposal); |
(e) | the disposal of assets by one wholly-owned Subsidiary of the Company to another or (if the consideration for the disposal does not exceed a normal commercial consideration) to the Company by one of its Subsidiaries; |
(f) | disposals in connection with sale-and-leaseback or sale and repurchase transactions or any other form of "off balance sheet" financing, provided that the aggregate book value (in the books of the disposing party) of all assets the subject of all such disposals made during the period commencing on the date of this Agreement and ending on the date when no amount remains to be lent or remains payable under this Agreement shall not exceed £50,000,000; |
(g) | any disposal which the Majority Lenders shall have agreed shall not be taken into account; |
(h) | arising as a result of any Security Interest or Quasi-Security Interest permitted under sub-clause 21.5.3 above; |
(i) | the application or disposal of cash not otherwise prohibited under the Finance Documents; |
(j) | any disposal by a member of Group compulsorily required by law or regulation having the force of law or any order of any government entity made thereunder and having the force of law provided that and to the extent permitted by such law or regulation: |
(i) | such disposal is made for fair market value; and |
(ii) | such disposal does not have a Material Adverse Effect. |
21.7 | Environmental matters |
21.7.1 | The Company will and will ensure that its Material Subsidiaries will comply with all applicable Environmental Law and other regulations, orders or other law applicable to the conduct of the business of the supply or distribution of electricity, in each case, where failure to do so would have a Material Adverse Effect. |
21.7.2 | The Company will, promptly upon becoming aware of the same, inform the Facility Agent in writing of: |
(a) | any Environmental Claim against any member of the Group which is current, pending or threatened; and |
(b) | any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group, |
21.8 | Insurance |
21.9 | Merger |
21.10 | Change of business |
21.11 | Acquisitions |
21.11.1 | Except as provided below, neither the Company nor any Material Subsidiary may acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them). |
21.11.2 | Provided that no Event of Default is outstanding on the date of the acquisition or would occur as a result of the acquisition, sub-clause 21.11.1 does not apply to: |
(a) | an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group as permitted under sub-clause 21.6.2 of Clause 21.6 (Disposals) above; |
(b) | an acquisition where the consideration (including associated costs and expenses) for the acquisition (when aggregated with the consideration (including associated costs and expenses) for any other acquisition permitted under this paragraph) during the term of this Agreement does not exceed 2.5% of the sum of the issued share capital, share premium and consolidated reserves (including retained earnings) of the Company, as shown by its most recent audited consolidated financial statements; and |
(c) | any acquisition which the Majority Lenders shall have consented to in writing. |
21.12 | Prohibition on the Debt Purchase Transactions of the Group |
21.13 | Prohibition on Subsidiary Financial Indebtedness |
21.14 | Arm's length transactions |
21.15 | Pensions |
21.15.1 | The Company shall ensure that no action or omission is taken by any member of the Group in relation to a pension scheme which has or is reasonably likely to have a Material Adverse Effect (including, without limitation, the termination or commencement of winding-up proceedings of any such pension scheme). |
21.15.2 | Except for in respect of the Electricity Supply Pension Scheme (and in particular the E.On Group, Networks Group and in the case of merger, the WPD Group), the Company shall ensure that no member of the Group is an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993) or "connected" with or an "associate" of (as those terms are used in sections 38 or 43 of the Pensions Act 2004) such an employer. |
21.15.3 | The Company shall promptly notify the Facility Agent of any material change in the rate of contributions payable to any of the pension schemes mentioned in sub-clause 21.15.2 above paid or required (by law or otherwise). |
21.15.4 | The Company shall immediately notify the Facility Agent of any investigation or proposed investigation by the Pensions Regulator which may lead to the issue of a Financial Support Direction or a Contribution Notice to any member of the Group. |
21.15.5 | The Company shall immediately notify the Facility Agent if it receives a Financial Support Direction or a Contribution Notice from the Pensions Regulator. |
21.16 | Licence |
21.16.1 | comply with the terms of the Licence in all material respects; |
21.16.2 | without prejudice to the generality of sub-clause 21.16.1 above, comply with the ring fencing provisions of the Licence in all respects; and |
21.16.3 | not take any action or make any omission which is reasonably likely to result in the revocation or termination of the Licence. |
21.17 | Investment Grade Rating |
21.18 | Sanctions |
21.18.1 | Neither the Company, nor any other member of the Group, shall be the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (the "OFAC"), the United Nations Security Council (the "UNSC"), the European Union, Her Majesty’s Treasury (the "HMT"), or other relevant sanctions authority (collectively, "Sanctions"), and no member of the Group shall be located, organized or resident in a country or territory that is the subject of country-wide or territory-wide Sanctions. |
21.18.2 | The Company undertakes that no member of the Group will, directly or indirectly, use the proceeds of the transaction, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity (the "Person"), to fund any activities of or business with any Person, or in Syria, Cuba, Iran, North Korea, Sudan or in any other country or territory, that, at the time of such funding, is the subject of country-wide or territory-wide Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. |
21.18.3 | The Company shall ensure that the source of any funds for discharging its obligations under this Agreement is not obtained from any designated target of any Sanctions or any of Syria, Cuba, Iran, North Korea, Sudan or any other country or territory, that, at the time of such payment, is the subject of country-wide or territory-wide Sanctions. |
21.19 | Anti-Corruption |
21.19.1 | The Company shall not (and shall ensure that no other member of the Group will) use the proceeds, or cause or permit the proceeds of any Loan to be used, directly or indirectly, in any way that would be in breach of applicable anti‑corruption laws. |
21.19.2 | The Company shall (and shall ensure that each other member of the Group will): |
(a) | conduct its businesses in compliance with applicable anti-corruption laws; and |
(b) | maintain policies and procedures designed to promote and achieve compliance with such laws. |
22. | DEFAULT |
22.1 | Events of Default |
22.2 | Non-payment |
(a) | administrative or technical error; or |
(b) | a Disruption Event, |
22.3 | Breach of other obligations |
22.3.1 | The Company does not perform or comply with its obligations under Clause 20 (Financial Covenants), Clause 21.5 (Negative pledge), Clause 21.6 (Disposals) or Clause 21.11 (Acquisitions). |
22.3.2 | The Company does not perform or comply with any of its other obligations under any Finance Document in any material respect or any representation or warranty by the Company in this Agreement or in any document delivered under it is or proves to have been incorrect when made or deemed repeated, unless the non‑compliance or circumstances giving rise to the misrepresentation, as the case may be, is capable of |
22.4 | Cross-default |
22.4.1 | Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period. |
22.4.2 | Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). |
22.4.3 | Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of that member of the Group as a result of an event of default (however described). |
22.4.4 | Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described). |
22.4.5 | No Event of Default will occur under this Clause 22.4 unless and until the aggregate amount of such Financial Indebtedness falling within sub-clauses 22.4.1 to 22.4.4 above is more than £20,000,000 or its equivalent in any other currency or currencies. |
22.5 | Insolvency |
22.5.1 | Any of the following occurs in respect of the Company: |
(a) | it is unable to pay its debts generally as they fall due or it is deemed by a court of competent jurisdiction to be insolvent; |
(b) | it suspends making payments on all or any class of its debts or publicly announces an intention to do so; |
(c) | by reason of actual or anticipated financial difficulties, it begins negotiations with all or any class of its creditors for the general rescheduling of its indebtedness; or |
(d) | a moratorium is declared in respect of any of its indebtedness. |
22.5.2 | If a moratorium occurs in respect of the Company, the ending of the moratorium will not remedy any Event of Default caused by the moratorium. |
22.6 | Insolvency proceedings |
22.6.1 | Except as provided below, any of the following occurs in respect of the Company: |
(a) | a suspension of payments, a moratorium of any indebtedness or a reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise); |
(b) | any person presents a petition for its winding-up, administration or dissolution; |
(c) | an order for its winding-up, administration or dissolution is made; |
(d) | any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; |
(e) | its directors or other officers request the appointment of a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer; |
(f) | enforcement of any Security over any of its assets; or |
(g) | any other analogous step or procedure is taken in any jurisdiction. |
22.6.2 | Sub-clause 22.6.1 does not apply to: |
(a) | a petition for winding-up presented by a creditor which is being actively contested in good faith and with due diligence and with a reasonable prospect of success; or |
(b) | a voluntary solvent winding-up, amalgamation, reconstruction or reorganisation or otherwise part of a solvent scheme of arrangement, in each case which is on terms approved by the Majority Lenders. |
22.7 | Creditors' process |
22.8 | Licence |
22.8.1 | notice is given to revoke or terminate the Licence unless such termination is being contested in good faith and such notice is revoked or cancelled within 14 days of notice being given; or |
22.8.2 | the Licence is revoked, |
22.9 | Balancing and Settlement Code |
22.9.1 | The Company ceases to be a party to the Balancing and Settlement Code Framework Agreement other than in circumstances where the Company is able to carry on its distribution business; or |
22.9.2 | the Company breaches the Balancing and Settlement Code and such breach has or is reasonably likely to have a Material Adverse Effect. |
22.10 | Unlawfulness and invalidity |
22.10.1 | It is or becomes unlawful for the Company to perform any of its obligations under the Finance Documents in any material respect. |
22.10.2 | Any obligation or obligations of the Company under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
22.11 | Cessation of business |
22.12 | Repudiation and rescission of agreements |
22.13 | Ownership of other Group companies |
(a) | which is engaged in the core electricity distribution business; or |
(b) | in respect of which it has any actual or contingent financial obligations other than as a result of a solvent liquidation or reorganisation so long as any payments or assets distributed as a result of such solvent liquidation or reorganisation are distributed to other members of the Group. |
22.14 | Material Adverse Effect |
22.15 | Acceleration |
22.15.1 | cancel the Total Commitments and/or Ancillary Commitments; and/or |
22.15.2 | declare that all or part of any amounts outstanding under the Finance Documents are: |
(a) | immediately due and payable; and/or |
(b) | payable on demand by the Facility Agent acting on the instructions of the Majority Lenders; and/or |
22.15.3 | declare that full cash cover in respect of all or part of the amounts outstanding under the Ancillary Facilities is immediately due and payable whereupon it shall become immediately due and payable or payable on demand at which time it shall become payable on demand by the Facility Agent on the instructions of the Majority Lenders. |
23. | THE ADMINISTRATIVE PARTIES |
23.1 | Appointment and duties of the Facility Agent |
23.1.1 | Each Finance Party (other than the Facility Agent) irrevocably appoints the Facility Agent to act as its agent under the Finance Documents. |
23.1.2 | Each Finance Party irrevocably authorises the Facility Agent to: |
(a) | perform the duties and to exercise the rights, powers and discretions that are specifically given to it under the Finance Documents, together with any other incidental rights, powers and discretions; and |
(b) | execute each Finance Document expressed to be executed by the Facility Agent. |
23.1.3 | The Facility Agent has only those duties which are expressly specified in the Finance Documents. Those duties are solely of a mechanical and administrative nature. |
23.1.4 | The Facility Agent shall provide to the Company within three Business Days of a request by the Company (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Facility Agent to that Lender under the Finance Documents. |
23.2 | Role of the Arrangers |
23.3 | No fiduciary duties |
23.4 | Individual position of an Administrative Party |
23.4.1 | If it is also a Lender, each Administrative Party has the same rights and powers under the Finance Documents as any other Lender and may exercise those rights and powers as though it were not an Administrative Party. |
23.4.2 | Each Administrative Party and each Ancillary Lender may: |
(a) | carry on any business with the Company or its related entities (including acting as an agent or a trustee for any other financing); and |
(b) | retain any profits or remuneration it receives under the Finance Documents or in relation to any other business it carries on with the Company or its related entities. |
23.5 | Reliance |
23.5.1 | rely on any notice or document believed by it to be genuine and correct and to have been signed by, or with the authority of, the proper person; |
23.5.2 | rely on any statement made by any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify; |
23.5.3 | engage, pay for and rely on professional advisers selected by it (including those representing a Party other than the Facility Agent); and |
23.5.4 | act under the Finance Documents through its personnel and agents. |
23.6 | Majority Lenders' instructions |
23.6.1 | The Facility Agent is fully protected if it acts on the instructions of the Majority Lenders in the exercise of any right, power or discretion or any matter not expressly provided for in the Finance Documents. Any such instructions given by the Majority Lenders will be binding on all the Lenders. In the absence of instructions, the Facility Agent may act as it considers to be in the best interests of all the Lenders. |
23.6.2 | The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings in connection with any Finance Document. |
23.6.3 | The Facility Agent may require the receipt of security satisfactory to it, whether by way of payment in advance or otherwise, against any liability or loss which it may incur in complying with the instructions of the Majority Lenders. |
23.7 | Responsibility |
23.7.1 | No Administrative Party and no Ancillary Lender is responsible to any other Finance Party for the adequacy, accuracy or completeness of: |
(a) | any Finance Document or any other document; or |
(b) | any statement or information (whether written or oral) made in or supplied in connection with any Finance Document. |
23.7.2 | Without affecting the responsibility of the Company for information supplied by it or on its behalf in connection with any Finance Document, each Lender and each Ancillary Lender confirms that it: |
(a) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Company and its related entities and the nature and extent of any recourse against any Party or its assets); and |
(b) | has not relied exclusively on any information provided to it by any Administrative Party in connection with any Finance Document. |
(a) | Nothing in this Agreement will oblige the Facility Agent to satisfy any know your customer requirement in relation to the identity of any person on behalf of any Finance Party. |
(b) | Each Finance Party confirms to the Facility Agent that it is solely responsible for any know your customer requirements it is required to carry out and that it may not rely on any statement in relation to those requirements made by any other person. |
23.8 | Exclusion of liability |
23.8.1 | Neither the Facility Agent nor any Ancillary Lender is liable or responsible to any other Finance Party for any action taken or not taken by it in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct. |
23.8.2 | The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent, if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose. |
23.8.3 | No Party (other than the Facility Agent or the Ancillary Lender) may take any proceedings against any officer, employee or agent of the Facility Agent or any Ancillary Lender in respect of any claim it might have against the Facility Agent or any Ancillary Lender or in respect of any act or omission of any kind by that officer, employee or agent in connection with any Finance Document. Any officer, employee or agent of the Facility Agent or any Ancillary Lender may rely on this sub-clause and enforce its terms under the Contracts (Rights of Third Parties) Act 1999. |
23.9 | Default |
23.9.1 | The Facility Agent is not obliged to monitor or enquire whether a Default has occurred. The Facility Agent is not deemed to have knowledge of the occurrence of a Default. |
23.9.2 | If the Facility Agent: |
(a) | receives notice from a Party referring to this Agreement, describing a Default and stating that the event is a Default; or |
(b) | is aware of the non-payment of any principal or interest or any fee payable to a Lender under this Agreement, |
23.10 | Information |
23.10.1 | The Facility Agent must promptly forward to the person concerned the original or a copy of any document which is delivered to the Facility Agent by a Party for that person. |
23.10.2 | Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
23.10.3 | Except as provided above, the Facility Agent has no duty: |
(a) | either initially or on a continuing basis to provide any Lender with any credit or other information concerning the risks arising under or in connection with the Finance Documents (including any information relating to the financial condition or affairs of the Company or its related entities or the nature or extent of recourse against any Party or its assets) whether coming into its possession before, on or after the date of this Agreement; or |
(b) | unless specifically requested to do so by a Lender in accordance with a Finance Document, to request any certificate or other document from the Company. |
23.10.4 | In acting as the Facility Agent, the agency division of the Facility Agent is treated as a separate entity from its other divisions and departments. Any information acquired by the Facility Agent which, in its opinion, is acquired by it otherwise than in its capacity as the Facility Agent may be treated as confidential by the Facility Agent and will not be treated as information possessed by the Facility Agent in its capacity as such. |
23.10.5 | The Facility Agent is not obliged to disclose to any person any confidential information supplied to it by a member of the Group solely for the purpose of evaluating whether any waiver or amendment is required to any term of the Finance Documents. |
23.10.6 | The Company irrevocably authorises the Facility Agent to disclose to the other Finance Parties any information which, in its opinion, is received by it in its capacity as the Facility Agent. |
23.10.7 | Without prejudice to the generality of the foregoing, the Facility Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Company and shall disclose the same upon the written request of the Company or the Majority Lenders. |
23.11 | Indemnities |
23.11.1 | Without limiting the liability of the Company under the Finance Documents, each Lender must indemnify the Facility Agent for that Lender's Pro Rata Share of any loss or liability incurred by the Facility Agent in acting as the Facility Agent, except to the extent that the loss or liability is caused by the Facility Agent's gross negligence or wilful misconduct or to the extent that the Facility Agent has been reimbursed in full by the Company for such loss or liability. |
23.11.2 | The Facility Agent may deduct from any amount received by it for a Lender any amount due to the Facility Agent from that Lender under a Finance Document but unpaid. |
23.11.3 | The Company must indemnify the Facility Agent against any loss or liability properly incurred by the Facility Agent as a result of: |
(a) | investigating any event which the Facility Agent reasonably believes to be a Default; or |
(b) | acting or relying on any notice which the Facility Agent reasonably believes to be genuine, correct and appropriately authorised. |
23.12 | Compliance |
23.13 | Resignation of the Facility Agent |
23.13.1 | The Facility Agent may resign and appoint any of its Affiliates as successor Facility Agent by giving notice to the Lenders and the Company. |
23.13.2 | Alternatively, the Facility Agent may resign by giving notice to the Lenders and the Company, in which case the Majority Lenders may appoint a successor Facility Agent. |
23.13.3 | If no successor Facility Agent has been appointed under sub-clause 23.13.2 above within 30 days after notice of resignation was given, the Facility Agent may appoint a successor Facility Agent. |
23.13.4 | The person(s) appointing a successor Facility Agent must, if practicable, consult with the Company prior to the appointment. Any successor Facility Agent must have an office in the U.K. |
23.13.5 | The resignation of the Facility Agent and the appointment of any successor Facility Agent will both become effective only when the successor Facility Agent notifies all the Parties that it accepts its appointment. On giving the notification, the successor Facility Agent will succeed to the position of the Facility Agent and the term "Facility Agent" will mean the successor Facility Agent. |
23.13.6 | The retiring Facility Agent must, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as the Facility Agent under the Finance Documents. |
23.13.7 | Upon its resignation becoming effective, this Clause will continue to benefit the retiring Facility Agent in respect of any action taken or not taken by it in connection with the Finance Documents while it was the Facility Agent, and, subject to sub-clause 23.13.6 above, it will have no further obligations under any Finance Document. |
23.14 | Replacement of the Facility Agent |
23.14.1 | After consultation with the Company, the Majority Lenders may, by giving 30 days' notice to the Facility Agent (or, at any time the Facility Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Facility Agent by appointing a successor Facility Agent (acting through an office in the United Kingdom). |
23.14.2 | The retiring Facility Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. |
23.14.3 | The replacement of the Facility Agent and the appointment of the successor Facility Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Facility Agent. As from this date, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 23 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date). |
23.14.4 | Any successor Facility Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
23.15 | Relationship with Lenders |
23.15.1 | Subject to Clause 29.9 (Pro rata interest settlement), the Facility Agent may treat each Lender as a Lender, entitled to payments under this Agreement and as acting through its Facility Office(s) until it has received not less than five Business Days' prior notice from that Lender to the contrary. |
23.15.2 | The Facility Agent may at any time, and must if requested to do so by the Majority Lenders, convene a meeting of the Lenders. |
23.15.3 | The Facility Agent must keep a register of all the Parties and supply any other Party with a copy of the register on request. The register will include each Lender's Facility Office(s) and contact details for the purposes of this Agreement. |
23.16 | Facility Agent's management time |
23.17 | Notice period |
23.18 | Subordination Deed |
24. | EVIDENCE AND CALCULATIONS |
24.1 | Accounts |
24.2 | Certificates and determinations |
24.3 | Calculations |
25. | FEES |
25.1 | Agency fee |
25.2 | Arrangement and participation fees |
25.3 | Co-ordination fee |
25.4 | Commitment fee |
25.4.1 | The Company must pay a commitment fee computed at the rate of 35 per cent. of the applicable Margin on the undrawn, uncancelled amount of each Lender's Commitment for the Availability Period calculated from the date of this Agreement. |
25.4.2 | The commitment fee is payable quarterly in arrears during the Availability Period and on the last day of the Availability Period. Accrued commitment fee is also payable to the Facility Agent for a Lender on the date its Commitment is cancelled in full. |
25.4.3 | No commitment fee is payable to the Facility Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender. |
25.5 | Utilisation fee |
25.5.1 | The Company must pay to the Facility Agent for each Lender a utilisation fee computed at the rate of 0.20 per cent. per annum on the aggregate principal amount of the Loans for each day on which the aggregate Base Currency Amount of all Loans exceeds 33.3 per cent. of the Total Commitments. |
25.5.2 | The Company must pay to the Facility Agent for each Lender a utilisation fee computed at the rate of 0.40 per cent. per annum on the aggregate principal amount of the Loans for each day on which the Base Currency Amount of all Loans exceeds 66.6 per cent. of the Total Commitments. For the avoidance of doubt, the fee described in sub-clause 25.5.1 above is not payable in respect of any day for which the fee described in this sub-clause 25.5.2 is payable. |
25.5.3 | Utilisation fee is payable on the amount of each Lender's share in the Loans. |
25.5.4 | Accrued utilisation fee is payable quarterly in arrears. Accrued utilisation fee is also payable to the Facility Agent for a Lender on the date its Commitment is cancelled in full. |
25.6 | Interest, commission and fees on Ancillary Facilities |
26. | INDEMNITIES AND BREAK COSTS |
26.1 | Currency indemnity |
26.1.1 | The Company must, as an independent obligation, indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of: |
(a) | that Finance Party receiving an amount in respect of the Company's liability under the Finance Documents; or |
(b) | that liability being converted into a claim, proof, judgment or order, |
26.1.2 | Unless otherwise required by law, the Company waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable. |
26.2 | Other indemnities |
26.2.1 | the occurrence of any Event of Default; |
26.2.2 | (other than by reason of negligence or default by a Finance Party) a Loan not being made after a Request has been delivered for that Loan; or |
26.2.3 | the receipt or recovery by any party (or the Facility Agent on its behalf) of all or any part of a Loan or overdue sum due from the Company otherwise than on the Final Maturity Date or Maturity Date of that Loan or, in the case of an overdue sum, the last day of an interest period relating to that overdue sum, as the case may be or a Loan or any part thereof not being prepaid in accordance with a notice of prepayment. |
26.3 | Break Costs |
26.3.1 | The Company must pay to each Lender its Break Costs within three Business Days of demand. |
26.3.2 | Break Costs are the amount (if any) determined by the relevant Lender by which: |
(a) | the interest (excluding Margin) which that Lender would have received for the period from the date of receipt of any part of its share in a Loan or overdue amount to the last day of the applicable Term for that Loan or overdue amount if the principal or overdue amount received had been paid on the last day of that Term; |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Term. |
26.3.3 | Each Lender must supply to the Facility Agent for the Company details of the amount of any Break Costs claimed by it under this Clause. |
27. | EXPENSES |
27.1 | Initial costs |
27.2 | Subsequent costs |
27.2.1 | the negotiation, preparation, printing and execution of any Finance Document (other than a Transfer Certificate or Increase Confirmation) executed after the date of this Agreement; and |
27.2.2 | any amendment, waiver or consent requested by or on behalf of the Company or specifically allowed by this Agreement. |
27.3 | Enforcement costs |
28. | AMENDMENTS AND WAIVERS |
28.1 | Procedure |
28.1.1 | Except as provided in this Clause 28, any term of the Finance Documents (other than the Fee Letters) may be amended or waived with the agreement of the Company and the Majority Lenders. The Facility Agent may effect, on behalf of any Finance Party, an amendment or waiver allowed under this Clause. |
28.1.2 | The Facility Agent must promptly notify the other Parties of any amendment or waiver effected by it under sub-clause 28.1.1 above. Any such amendment or waiver is binding on all the Parties. |
28.2 | Exceptions |
28.2.1 | An amendment or waiver which relates to: |
(a) | the definition of Majority Lenders in Clause 1.1 (Definitions); |
(b) | Clause 2.3 (Nature of a Finance Party's rights and obligations); |
(c) | an extension of the date of payment of any amount to a Lender under the Finance Documents; |
(d) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fee or other amount payable to a Lender under the Finance Documents; |
(e) | an increase in, or an extension of, a Commitment or the Total Commitments; |
(f) | a term of a Finance Document which expressly requires the consent of each Lender; |
(g) | the right of a Lender to assign or transfer its rights or obligations under the Finance Documents; |
(h) | Clause 10.1 (Mandatory prepayment – illegality) or Clause 10.2 (Mandatory prepayment – change of control); or |
(i) | this Clause, |
28.2.2 | An amendment or waiver which relates to the rights or obligations of an Administrative Party or an Ancillary Lender may only be made with the consent of that Administrative Party or Ancillary Lender. |
28.3 | Disenfranchisement of Defaulting Lenders |
28.3.1 | For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender's Commitments will be reduced by the amount of its Available Commitments. |
28.3.2 | For the purposes of this Clause 28.3, the Facility Agent may assume that the following Lenders are Defaulting Lenders: |
(a) | any Lender which has notified the Facility Agent that it has become a Defaulting Lender; |
(b) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of "Defaulting Lender" has occurred where, in the case of the events or circumstances referred to in paragraph (a), none of the exceptions to that paragraph apply, |
28.4 | Replacement of a Defaulting Lender |
28.4.1 | The Company may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days' prior written notice to the Facility Agent and such Lender: |
(a) | replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 29 (Changes to the Parties) all (and not part only) of its rights and obligations under this Agreement; or |
(b) | require such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 29 (Changes to the Parties) all (and not part only) of the undrawn Commitment of the Lender. |
28.4.2 | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions: |
(a) | the Company shall have no right to replace the Facility Agent; |
(b) | neither the Facility Agent nor the Defaulting Lender shall have any obligation to the Company to find a Replacement Lender; |
(c) | the transfer must take place no later than 14 days after the notice referred to in sub-clause 28.4.1 above; |
(d) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and |
(e) | the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to sub-clause 28.4.1 above once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to the Replacement Lender. |
28.5 | Excluded Commitments |
28.6 | Change of currency |
28.7 | Waivers and remedies cumulative |
28.7.1 | may be exercised as often as necessary; |
28.7.2 | are cumulative and not exclusive of its rights under the general law; and |
28.7.3 | may be waived only in writing and specifically. |
29. | CHANGES TO THE PARTIES |
29.1 | Assignments and transfers by the Company |
29.2 | Assignments and transfers by Lenders |
29.2.1 | A Lender (the Existing Lender) may, subject to the following provisions of this Clause 29, at any time assign or transfer (including by way of novation) any of its rights and obligations under this Agreement to any bank, financial institution or trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the New Lender). |
29.2.2 | Unless the Company and the Facility Agent otherwise agree, an assignment or transfer of part of a Commitment or rights and obligations under this Agreement by the Existing Lender must be in a minimum amount of £5,000,000. |
29.2.3 | An Existing Lender must consult with the Company for no more than five Business Days before it may make an assignment or transfer unless the New Lender is another Lender or an Affiliate of a Lender or an Event of Default has occurred and is outstanding. |
29.2.4 | The Facility Agent is not obliged to accept an assignment or execute a Transfer Certificate until it has completed all know your customer requirements to its satisfaction. The Facility Agent must promptly notify the Existing Lender and the New Lender if there are any such requirements. |
29.2.5 | An assignment of rights or a transfer of rights and obligations will be effective only if either: |
(a) | the obligations are novated in accordance with the following provisions of this Clause 29; or |
(b) | the New Lender confirms to the Facility Agent and the Company in form and substance satisfactory to the Facility Agent that it is bound by the terms of this Agreement as a Lender. On the assignment or transfer becoming effective in this manner the Existing Lender will be released from its rights and obligations under this Agreement to the extent that they are assigned or transferred to the New Lender. |
29.2.6 | Unless the Facility Agent otherwise agrees, the New Lender must pay to the Facility Agent for its own account, on or before the date any assignment or transfer occurs, a fee of £2,000. |
29.2.7 | Any reference in this Agreement to a Lender includes a New Lender but excludes a Lender if no amount is or may be owed to or by it under this Agreement. |
29.3 | Procedure for transfer by way of novations |
29.3.1 | In this Clause: |
(a) | the proposed Transfer Date specified in that Transfer Certificate; and |
(b) | the date on which the Facility Agent executes that Transfer Certificate. |
29.3.2 | A novation is effected if: |
(a) | the Existing Lender and the New Lender deliver to the Facility Agent a duly completed Transfer Certificate; and |
(b) | the Facility Agent executes it. |
29.3.3 | Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to execute any duly completed Transfer Certificate on its behalf. |
29.3.4 | 29.3.4 Subject to Clause 29.9 (Pro rata interest settlement), on the Transfer Date: |
(a) | the New Lender will assume the rights and obligations of the Existing Lender expressed to be the subject of the novation in the Transfer Certificate in substitution for the Existing Lender; and |
(b) | the Existing Lender will be released from those obligations and cease to have those rights. |
29.4 | Limitation of responsibility of Existing Lender |
29.4.1 | Unless expressly agreed to the contrary, an Existing Lender is not responsible to a New Lender for the legality, validity, adequacy, accuracy, completeness or performance of: |
(a) | any Finance Document or any other document; or |
(b) | any statement or information (whether written or oral) made in or supplied in connection with any Finance Document, |
29.4.2 | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(a) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Company and its related entities and the nature and extent of any recourse against any Party or its assets) in connection with its participation in this Agreement; and |
(b) | has not relied exclusively on any information supplied to it by the Existing Lender in connection with any Finance Document. |
29.4.3 | Nothing in any Finance Document requires an Existing Lender to: |
(a) | accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause; or |
(b) | support any losses incurred by the New Lender by reason of the non-performance by the Company of its obligations under any Finance Document or otherwise. |
29.5 | Costs resulting from change of Lender or Facility Office |
29.5.1 | a Lender assigns or transfers any of its rights and obligations under the Finance Documents or changes its Facility Office; and |
29.5.2 | as a result of circumstances existing at the date the assignment, transfer or change occurs, the Company would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased costs), then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This Clause 29.5 shall not apply in relation to Clause 14 (Tax gross-up and indemnities), to a Treaty Lender that has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with sub-clause 14.6.1 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation) if the Company making the payment has not complied with its obligations under sub-clause 14.1.2 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation). |
29.6 | Changes to the Reference Banks |
29.6.1 | If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent must (in consultation with the Company) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank. |
29.6.2 | If a Reference Bank ceases to have a London office or novates or assigns all its rights and obligations under this Agreement or if any Commitments of any Reference Bank are cancelled or if Loans it has advanced are prepaid it shall be replaced as a Reference Bank by such other Lender or an Affiliate of a Lender with an office in London as the |
29.7 | Copy of Transfer Certificate or Increase Confirmation to Company |
29.8 | Security over Lenders' rights |
(a) | any charge, assignment or other security to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other security for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by the Company or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
29.9 | Pro rata interest settlement |
29.9.1 | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Term (or, if the Term is longer than six months, on the next of the dates which falls at six monthly intervals after the first day of that Term); and |
29.9.2 | the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt: |
(i) | when the Accrued Amounts become payable, those Accrued Amounts will be payable for the account of the Existing Lender; and |
(ii) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 29.9, have been payable to it on that date, but after deduction of the Accrued Amounts. |
30. | CONFIDENTIALITY AND DISCLOSURE OF INFORMATION |
30.1 | Confidential Information |
30.2 | Disclosure of Confidential Information |
30.2.1 | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this sub-clause 30.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
30.2.2 | to any person: |
(a) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(b) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or the Company and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(c) | appointed by any Finance Party or by a person to whom sub-clause 30.2.2 (a) or (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf; |
(d) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-clause 30.2.2 (a) or (b) above; |
(e) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other |
(f) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates security (or may do so) pursuant to Clause 29.8 (Security over Lenders' rights) ; |
(g) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(h) | who is a Party; or |
(i) | with the consent of the Company; |
(i) | in relation to sub-clause 30.2.2 (a), (b) and (c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; |
(ii) | in relation to sub-clause 30.2.2 (d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; |
(iii) | in relation to sub-clause 30.2.2 (e), (f) and (g) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; |
30.2.3 | to any person appointed by that Finance Party or by a person to whom sub-clause 30.2.2 (a) or (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this sub-clause 30.2.3 if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Company and the relevant Finance Party; |
30.2.4 | to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Company if the rating agency to whom the Confidential Information is to be given is informed of its confidential |
30.3 | Disclosure to numbering service providers |
30.3.1 | Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or the Company the following information: |
(a) | name of the Company; |
(b) | country of domicile of the Company; |
(c) | place of incorporation of the Company; |
(d) | date of this Agreement; |
(e) | the names of the Facility Agent and the Arranger; |
(f) | date of each amendment and restatement of this Agreement; |
(g) | amount of Total Commitments; |
(h) | currencies of the Facility; |
(i) | type of Facility; |
(j) | ranking of Facility; |
(k) | Final Maturity Date for the Facility; |
(l) | changes to any of the information previously supplied pursuant to paragraphs (a) to (k) above; and |
(m) | such other information agreed between such Finance Party and the Company, |
30.3.2 | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or the Company by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
30.3.3 | The Company represents that none of the information set out in paragraphs (a) to (m) of sub-clause 30.3.1 above is, nor will at any time be, unpublished price-sensitive information. |
30.3.4 | The Facility Agent shall notify the Company and the other Finance Parties of: |
(a) | the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or the Company; and |
(b) | the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or the Company by such numbering service provider. |
31. | CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS |
31.1 | Confidentiality and disclosure |
31.1.1 | The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by sub-clause 31.1.2, 31.1.3 and 31.1.4 below. |
31.1.2 | The Facility Agent may disclose: |
(a) | any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Company pursuant to Clause 11.4 (Notification of rates of interest); and |
(b) | any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a Confidentiality Undertaking. |
31.1.3 | The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to: |
(a) | any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors and partners if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it; |
(b) | any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; |
(c) | any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and |
(d) | any person with the consent of the relevant Lender or Reference Bank, as the case may be. |
31.1.4 | The Facility Agent's obligations in this Clause 31 (Confidentiality of Funding Rates and Reference Bank Quotations) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 11.4 (Notification of rates of interest) provided that (other than pursuant to paragraph (a) of sub-clause 31.1.2 above) the Facility Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification. |
31.2 | Other obligations |
31.2.1 | The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose. |
31.2.2 | The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be: |
(a) | of the circumstances of any disclosure made pursuant to paragraph (b) of sub-clause 31.1.3 above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(b) | upon becoming aware that any information has been disclosed in breach of this Clause 31 (Confidentiality of Funding Rates and Reference Bank Quotations). |
32. | SET-OFF |
32.1.1 | A Finance Party may set off any matured obligation owed to it by the Company under the Finance Documents (to the extent beneficially owned by that Finance Party) against any obligation (whether or not matured) owed by that Finance Party to the Company, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. |
32.1.2 | Any credit balances taken into account by an Ancillary Lender when operating a net limit in respect of any overdraft under an Ancillary Facility shall on enforcement of the Finance Documents be applied first in reduction of the overdraft provided under that Ancillary Facility in accordance with its terms. |
33. | PRO RATA SHARING |
33.1 | Redistribution |
33.1.1 | If any amount owing by the Company under this Agreement to a Lender (the "recovering Lender") is discharged by payment, set-off or any other manner other than through the Facility Agent under this Agreement (a "recovery"), then: |
(a) | the recovering Lender must, within three Business Days, supply details of the recovery to the Facility Agent; |
(b) | the Facility Agent must calculate whether the recovery is in excess of the amount which the recovering Lender would have received if the recovery had been received by the Facility Agent under this Agreement; and |
(c) | the recovering Lender must pay to the Facility Agent an amount equal to the excess (the "redistribution"). |
33.2 | Effect of redistribution |
33.2.1 | The Facility Agent must treat a redistribution as if it were a payment by the Company under this Agreement and distribute it among the Lenders, other than the recovering Lender, accordingly. |
33.2.2 | When the Facility Agent makes a distribution under sub-clause 33.2.1 above, the recovering Lender will be subrogated to the rights of the Finance Parties which have shared in that redistribution. |
33.2.3 | If and to the extent that the recovering Lender is not able to rely on any rights of subrogation under sub-clause 33.2.2 above, the Company will owe the recovering Lender a debt which is equal to the redistribution, immediately payable and of the type originally discharged. |
33.2.4 | If: |
(a) | a recovering Lender must subsequently return a recovery, or an amount measured by reference to a recovery, to the Company; and |
(b) | the recovering Lender has paid a redistribution in relation to that recovery, |
33.3 | Exceptions |
33.3.1 | it would not, after the payment, have a valid claim against the Company in the amount of the redistribution; or |
33.3.2 | it would be sharing with another Finance Party any amount which the recovering Lender has received or recovered as a result of legal or arbitration proceedings, where: |
(a) | the recovering Lender notified the Facility Agent of those proceedings; and |
(b) | the other Finance Party had an opportunity to participate in those proceedings but did not do so or did not take separate legal or arbitration proceedings as soon as reasonably practicable after receiving notice of them. |
33.4 | Ancillary Lenders |
33.4.1 | This Clause 32 shall not apply to any receipt or recovery by a Lender in its capacity as an Ancillary Lender at any time prior to service of notice under Clause 22.15 (Acceleration). |
33.4.2 | Following service of notice under Clause 22.15 (Acceleration), this Clause 32 shall apply to all receipts or recoveries by Ancillary Lenders except to the extent that the receipt or recovery represents a reduction from the Permitted Gross Outstandings of a Multi-account Overdraft to or towards an amount equal to its Designated Net Amount. |
34. | SEVERABILITY |
34.1 | If a term of a Finance Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: |
34.1.1 | the legality, validity or enforceability in that jurisdiction of any other term of the Finance Documents; or |
34.1.2 | the legality, validity or enforceability in other jurisdictions of that or any other term of the Finance Documents. |
35. | COUNTERPARTS |
36. | NOTICES |
36.1 | In writing |
36.1.1 | Any communication in connection with a Finance Document must be in writing and, unless otherwise stated, may be given: |
(a) | in person, by post, or fax or any other electronic communication approved by the Facility Agent; or |
(b) | if between the Facility Agent and a Lender and the Facility Agent and the Lender agree, by e-mail or other electronic communication. |
36.1.2 | For the purpose of the Finance Documents, an electronic communication will be treated as being in writing. |
36.1.3 | Unless it is agreed to the contrary, any consent or agreement required under a Finance Document must be given in writing. |
36.2 | Contact details |
36.2.1 | Except as provided below, the contact details of each Party for all communications in connection with the Finance Documents are those notified by that Party for this purpose to the Facility Agent on or before the date it becomes a Party. |
36.2.2 | The contact details of the Company for this purpose are: |
Address: | Avonbank, Feeder Road, Bristol BS2 0TB |
Fax number: | 01179 332 108 |
Phone number: | 01179 332 354 |
E-mail: | jhunt9@westernpower.co.uk |
Attention: | Julie Hunt |
Address: | 2 King Edward Street, London EC1A 1HQ |
Fax number: | 44 208313 2149 |
E-mail: | emea.7115loansagency@bankofamerica.com |
Attention: | Loans Agency |
36.2.3 | Any Party may change its contact details by giving five Business Days' notice to the Facility Agent or (in the case of the Facility Agent) to the other Parties. |
36.2.4 | Where a Party nominates a particular department or officer to receive a communication, a communication will not be effective if it fails to specify that department or officer. |
36.3 | Effectiveness |
36.3.1 | Except as provided below, any communication in connection with a Finance Document will be deemed to be given as follows: |
(a) | if delivered in person, at the time of delivery; |
(b) | if posted, five days after being deposited in the post, postage prepaid, in a correctly addressed envelope; and |
(c) | if by fax, when received in legible form. |
36.3.2 | A communication given under sub-clause 36.3.1 above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place. |
36.3.3 | A communication to the Facility Agent will only be effective on actual receipt by it. |
36.4 | The Company |
36.5 | Communication when Facility Agent is Impaired Agent |
37. | LANGUAGE |
37.1.1 | Any notice given in connection with a Finance Document must be in English. |
37.1.2 | Any other document provided in connection with a Finance Document must be: |
(a) | in English; or |
(b) | (unless the Facility Agent otherwise agrees) accompanied by a certified English translation. In this case, the English translation prevails unless the document is a statutory or other official document. |
38. | GOVERNING LAW |
39. | ENFORCEMENT |
39.1 | Jurisdiction |
39.1.1 | The English courts have exclusive jurisdiction to settle any dispute in connection with any Finance Document including a dispute relating to any non-contractual obligation arising out of or in connection with this Agreement. |
39.1.2 | The English courts are the most appropriate and convenient courts to settle any such dispute and the Company waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document. |
39.1.3 | This Clause is for the benefit of the Finance Parties only. To the extent allowed by law, a Finance Party may take: |
(a) | proceedings in any other court; and |
(b) | concurrent proceedings in any number of jurisdictions. |
Name of Original Lender | Commitment | Treaty Passport scheme reference number and jurisdiction of tax residence (if applicable) |
Abbey National Treasury Services plc (trading as Santander Global Banking & Markets) | £38,571,428.57 | |
Bank of America Merrill Lynch International Limited | £30,000,000.00 | |
Barclays Bank PLC | £38,571,428.57 | |
HSBC Bank plc | £38,571,428.58 | |
Lloyds Bank plc | £38,571,428.57 | |
Mizuho Bank, Ltd | £38,571,428.57 | |
The Royal Bank of Scotland plc | £38,571,428.57 | |
Royal Bank of Canada | £38,571,428.57 | |
Total | £300,000,000 |
1. | We refer to the Agreement. This is a Request. Terms defined in the Agreement have the same meaning in this Request unless given a different meaning in this Request. |
2. | We wish to borrow a Loan on the following terms: |
(a) | Drawdown Date: [•] |
(b) | Amount/currency: [•] |
(c) | Term: [•] |
3. | Our payment instructions are: [•] |
4. | We confirm that each condition precedent under the Agreement which must be satisfied on the date of this Request is so satisfied. |
5. | We confirm that as at [relevant testing date] Consolidated EBITDA was [•] and Interest Payable was [•]; therefore, the ratio of Consolidated EBITDA to Interest Payable was [•] to 1. |
6. | We confirm that as at [relevant testing date] Regulatory Asset Base was [•] and Total Net Debt was [•]; therefore, Total Net Debt does not exceed an amount equal to 85% of the Regulatory Asset Base. |
7. | This Request is irrevocable. |
From: | [THE EXISTING LENDER] (the Existing Lender) and [THE NEW LENDER] (the New Lender) |
1. | The Existing Lender and the New Lender agree to the Existing Lender transferring by novation to the New Lender, and in accordance with Clause 29.3 (Procedure for transfer by way of novation), all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in Loans under the Agreement as specified in the Schedule below. |
2. | The proposed Transfer Date is [•]. |
3. | The administrative details of the New Lender for the purposes of the Agreement are set out in the Schedule. |
4. | The New Lender confirms, for the benefit of the Facility Agent and without liability to the Company, that it is: |
(a) | [a Qualifying Lender falling within paragraph (a)(i) or paragraph (b) of the definition of Qualifying Lender;] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender].* |
5. | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; or |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of |
6. | [The New Lender confirms (for the benefit of the Facility Agent and without liability to the Company) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [•]), and is tax resident in [•] *** so that interest payable to it by the Company is generally subject to full exemption from UK withholding tax and notifies the Company that the Company must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
* | Delete as applicable - each New Lender is required to confirm which of these three categories it falls within. |
** | Include if New Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 14.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
7. | This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law. |
[EXISTING LENDER] | [NEW LENDER] |
By: | By: |
1. | We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning in this Compliance Certificate unless given a different meaning in this Compliance Certificate. |
2. | We confirm that as at [relevant testing date], Consolidated EBITDA was [•] and Interest Payable was [•], therefore the ratio of Consolidated EBITDA to Interest Payable was [•] to 1. |
3. | We confirm that as at [relevant testing date], Regulatory Asset Base was [•] and Total Net Debt was [•]; therefore Total Net Debt does not exceed 85% of the Regulatory Asset Base. |
4. | We set out below calculations establishing the figures in paragraphs 2 and 3 above: |
5. | We confirm that the following companies were Material Subsidiaries at [relevant testing date]: |
6. | [We confirm that no Default is outstanding as at [relevant testing date].]1 |
To: | Bank of America Merrill Lynch International Limited as Facility Agent and Western Power Distribution (East Midlands) plc as Company |
1. | We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation. |
2. | We refer to Clause 2.2 (Increase) of the Agreement. |
3. | In accordance with the terms of the Agreement, the Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the "Relevant Commitment") as if it was an Original Lender under the Agreement. |
4. | The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the "Increase Date") is [•]. |
5. | On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender. |
6. | The Facility Office and address, fax number and attention details for notices to the Increase Lender are set out in the Schedule. |
7. | The Increase Lender expressly acknowledges the limitations on the Lenders' obligations referred to in Clause 2.2 (Increase). |
8. | The Increase Lender confirms, for the benefit of the Facility Agent and without liability to the Company, that it is: |
8.1.1 | [a Qualifying Lender falling within paragraph (a)(i) or paragraph (b) of the definition of Qualifying Lender;] |
8.1.2 | [a Treaty Lender;] |
8.1.3 | [not a Qualifying Lender].* |
9. | [The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
9.1.1 | a company resident in the United Kingdom for United Kingdom tax purposes; or |
9.1.2 | a partnership each member of which is: |
(1) | a company so resident in the United Kingdom; or |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
9.1.3 | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]** |
10. | [The Increase Lender confirms (for the benefit of the Facility Agent and without liability to the Company) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [•]), and is tax resident in [•] *** so that interest payable to it by the Company is generally subject to full exemption from UK withholding tax and notifies the Company that the Company must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
* | Delete as applicable - each Increase Lender is required to confirm which of these three categories it falls within. |
** | Include if Increase Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 14.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the Increase Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
11. | This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation. |
12. | This Increase Confirmation and any non‑contractual obligations arising out of or in connection with it are governed by English law. |
13. | This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation. |
Facility Agent | |
By: | |
as Facility Agent for and on behalf of each of the parties to the Agreement (other than the Increase Lender) |
Loans in euro | Loans in sterling | Loans in other currencies | ||||
Facility Agent notifies the Company if a currency is approved as an Optional Currency in accordance with Clause 4.3 (Conditions relating to Optional Currencies) | - | - | U-4 | |||
Delivery of a duly completed Request (Clause 5.2 (Completion of Requests)) | U-3 9:30 a.m. | U-1 9:30 a.m. | U-3 9:30 a.m. | |||
Facility Agent determines (in relation to a Loan) the Base Currency Amount of the Loan, if required under Clause 5.4 (Advance of Loan) and notifies the Lenders of the Loan in accordance with Clause 5.4 (Advance of Loan) | U-3 Noon | U-1 Noon | U-3 Noon | |||
Facility Agent receives a notification from a Lender under Clause 7.2.1 (Revocation of a currency) | Quotation Day | - | Quotation Day | |||
Facility Agent gives notice in accordance with Clause 7.2 (Revocation of a currency) | Quotation Day 5:30 p.m. | - | Quotation Day 5:30 p.m. | |||
LIBOR or EURIBOR is fixed | Quotation Day as of 11:00 a.m. London time in respect of LIBOR and as of 11:00 a.m. (Brussels time) in respect of EURIBOR | Quotation Day as of 11:00 a.m. | Quotation Day as of 11:00 a.m. |
"U" | = date of utilisation |
"U-X" | = X Business Days prior to date of utilisation. |
1. | WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC (registered number 02366923) (the Company); |
2. | [SUBORDINATED CREDITOR] (the Subordinated Creditor); and |
3. | [l], as Facility Agent acting on behalf of the Lenders (the Facility Agent). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | the repayment or prepayment of any principal amount (or capitalised interest) outstanding under the Subordinated Finance Document; |
(b) | the payment of any interest, fee or charge accrued or due under or any other amount payable in connection with the Subordinated Finance Document; or |
(c) | the purchase, redemption, defeasance or discharge of any amount outstanding under the Subordinated Finance Document, |
1.2 | Construction |
1.2.1 | Capitalised terms defined in the Agreement have the same meaning in this Deed, unless given a different meaning in this Deed. |
1.2.2 | The principles of construction set out in the Agreement will have effect as if set out in this Deed. |
1.2.3 | Any undertaking by the Subordinated Creditor in this Deed remains in force from the date of this Deed to the Senior Debt Discharge Date. |
1.3 | Third Party rights |
2. | SUBORDINATION |
2.1 | Ranking |
2.2 | Undertakings of the Company |
2.2.1 | make any payment whatsoever in respect of the Subordinated Debt other than a Permitted Subordinated Debt Payment; or |
2.2.2 | secure, in any manner, all or any part of the Subordinated Debt; or |
2.2.3 | defease, in any manner, all or any part of the Subordinated Debt; or |
2.2.4 | give any financial support (including the taking of any participation, the giving of any guarantee or other assurance or the making of any deposit) to any person in connection with all or any part of the Subordinated Debt; or |
2.2.5 | procure any other person to do any of the acts or take any of the actions referred to paragraphs 2.2.1 to 2.2.4 above. |
2.3 | Undertakings of the Subordinated Creditor |
2.3.1 | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(a) | allow to exist or receive the benefit of any Security Interest, guarantee, indemnity or other assurance against loss in respect of all or any of the Subordinated Debt or all or any rights which it may have against the Company in respect of all or any part of the Subordinated Debt; or |
(b) | take or omit to take any action or step whereby the subordination of all or any of the Subordinated Debt might be terminated, impaired or adversely affected. |
2.3.2 | The Subordinated Creditor will not without the prior written consent of the Lenders receive any payment save where such payment is a Permitted Subordinated Debt Payment. |
2.3.3 | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(a) | demand payment, declare prematurely due and payable or otherwise seek to accelerate payment of or place on demand all or any part of the Subordinated Debt or enforce the Subordinated Debt by execution or otherwise; |
(b) | initiate or support or take any steps with a view to, or which may lead to: |
(i) | any insolvency, liquidation, reorganisation, administration or dissolution proceedings; |
(ii) | any voluntary arrangement or assignment for the benefit of creditors; or |
(iii) | any similar proceedings, |
(c) | bring or support any legal proceedings against the Company or any of its Subsidiaries; or |
(d) | otherwise exercise any remedy for the recovery of all or any part of the Subordinated Debt (including, without limitation, the exercise of any right of set-off, counterclaim or lien). |
2.3.4 | If the Subordinated Creditor receives any payment which is in breach of any Finance Document, it shall hold such sums on trust for the Facility Agent (acting on behalf of the Lenders) and pay them immediately to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt. |
2.3.5 | The Subordinated Creditor and the Company hereby agree for the benefit of the Facility Agent and the Lenders that, notwithstanding the terms of the Subordinated Finance Document and any agreement relating to the Subordinated Debt, the Subordinated Debt is made available on terms such that it is not, save for a Permitted Subordinated Debt Payment or otherwise with the consent of the Lenders, repayable unless and until the Senior Debt Discharge Date shall have occurred. |
2.4 | Subordination on insolvency |
2.4.1 | the Subordinated Debt shall continue to be subordinated to the Senior Debt; |
2.4.2 | any payment or distribution of any kind or character and all and any rights in respect thereof, whether in cash, securities or other property which is payable or deliverable upon or with respect to the Subordinated Debt or any part thereof by a liquidator, administrator or receiver (or the equivalent thereof) of the Company or its estate (the "rights") made to or paid to, or received by the Subordinated Creditor or to which the Subordinated Creditor is entitled shall be held on trust by the Subordinated Creditor for the Lenders and shall forthwith be paid or, as the case may be, transferred or assigned to the Lenders to be applied against the Senior Debt; |
2.4.3 | if the trust referred to in paragraph 2.4.2 above or paragraph 2.3.4 of Clause 2.3 above fails or cannot be given effect to or if the Subordinated Creditor receives and retains the relevant payment or distribution, the Subordinated Creditor will pay over such rights in the form received to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt; |
2.4.4 | the Subordinated Creditor acknowledges the rights of the Facility Agent (acting on behalf of the Lenders) to demand, sue and prove for, collect and receive every payment or distribution referred to in paragraph 2.4.2 above and give acquittance therefore and to file claims and take such other proceedings, in the Facility Agent's own name or otherwise, as the Facility Agent may deem necessary or advisable for the enforcement of this Deed; and |
2.4.5 | the Subordinated Creditor by way of security for its obligations under this Deed irrevocably appoints the Facility Agent to be its attorney in order to enable the Facility Agent to enforce any and all claims upon or with respect to the Subordinated Debt or any part thereof, and to collect and receive any and all payments or distributions referred to in paragraph 2.4.2 above or to do anything which that Subordinated Creditor has authorised the Facility Agent or any other Party to do under this Deed or is itself required to do under this Deed but has failed to do (and the Facility Agent may delegate that power on such terms as it sees fit). |
3. | SET-OFF |
3.1.1 | The Subordinated Creditor shall not set off against the Subordinated Debt any amount payable by the Subordinated Creditor to the Company. |
3.1.2 | If any part of the Subordinated Debt is discharged in whole or in part by way of set- off, the Subordinated Creditor will promptly pay to the Facility Agent for application in accordance with the terms of paragraph 2.4.2 of Clause 2.4 (Subordination on insolvency) an amount equal to the amount of the Subordinated Debt discharged by such set-off. |
4. | NEW MONEY |
5. | PROTECTION OF SUBORDINATION |
5.1.1 | The subordination in this Deed is a continuing subordination and benefits the ultimate balance of the Senior Debt. |
5.1.2 | Except as provided in this Deed, the subordination is, and the Subordinated Creditor's obligations under this Deed will, not be affected by any act, omission or thing which, but for this provision, would reduce, release or prejudice the subordination or any of the Subordinated Creditor's obligations under this Deed. |
6. | MISCELLANEOUS |
6.1.1 | This Deed overrides anything in any Subordinated Finance Document to the contrary. |
6.1.2 | Any communication in respect of this Deed must be in writing. Contact details for each Party are set out opposite their name, below. |
6.1.3 | This Deed is a Finance Document. |
7. | ASSIGNMENT |
7.1.1 | The Facility Agent (acting on behalf of the Lenders) shall have the full and unfettered right to assign or otherwise transfer the whole or any part of the benefit of this Deed to any person to whom all or a corresponding part of its rights, benefits and obligations under any of the Finance Documents are assigned or transferred in accordance with their provisions. |
7.1.2 | The Subordinated Creditor shall not assign or transfer all or any of its rights, title, benefit and interest in or to all or any part of the Subordinated Debt unless in full and on or prior to such assignment or transfer the assignee or transferee accedes to this Deed as Subordinated Creditor pursuant to the Subordinated Creditor Accession Deed. |
8. | TRUSTS |
8.1.1 | The Facility Agent shall hold the benefit of this Deed upon trust for itself and the Lenders. |
8.1.2 | The perpetuity period for each trust created by this Deed shall be 80 years. |
9. | TERMINATION |
10. | GOVERNING LAW |
11. | JURISDICTION |
To: | [l], as Facility Agent acting on behalf of the Lenders. |
EXECUTED as a DEED | ) | |||
by WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Company contact details: | ||||
Address: | Avonbank, Feeder Road, | |||
Bristol BS2 0TB | ||||
Fax number: | 01179 332 108 | |||
Phone number: | 01179 332 354 | |||
E-mail: | jhunt9@wsternpower.co.uk | |||
Attention: | Julie Hunt |
EXECUTED as a DEED | ) | |||
by [ACCEDING SUBORDINATED CREDITOR] | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Subordinated Creditor contact details: | ||||
Address: | ||||
Fax number: | ||||
Phone number: | ||||
E-mail: | ||||
Attention: |
EXECUTED as a DEED | ) | ||
by [AGENT] | ) | ||
acting by | ) | ||
Director | |||
In the presence of: | |||
Witness's Signature: | |||
Name: | |||
Address: | |||
Facility Agent contact details: | |||
Address: | |||
1. | We refer to the Agreement and the Deed. Capitalised terms defined in the Deed have the same meaning in this Certificate, unless given a different meaning in this Certificate. |
2. | We confirm that the Company will make [insert type of payment] of [insert amount and currency] under [insert description of relevant Subordinated Finance Document] on [insert date of payment]. |
3. | We confirm that, taking into account such payment, the Company will be in compliance with its obligations under Clause 20 (Financial Covenants) of the Agreement on each of the next two Measurement Dates (as such term is defined in the Agreement). |
EXECUTED as a DEED | ) | |||
by WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Company contact details: | ||||
Address: | Avonbank, Feeder Road, | |||
Bristol BS2 0TB | ||||
Fax number: | 01179 332 108 | |||
Phone number: | 01179 332 354 | |||
E-mail: | jhunt9@wsternpower.co.uk | |||
Attention: | Julie Hunt |
EXECUTED as a DEED | ) | |||
by [SUBORDINATED CREDITOR] | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Subordinated Creditor contact details: | ||||
Address: | ||||
Fax number: | ||||
Phone number: | ||||
E-mail: | ||||
Attention: |
EXECUTED as a DEED | ) | ||
by [l] | ) | ||
acting by | ) | ||
Director | |||
In the presence of: | |||
Witness's Signature: | |||
Name: | |||
Address: | |||
Facility Agent contact details: | |||
Address: | Bracken House | ||
One Friday Street | |||
London EC4M 9JA |
Signed by: for and on behalf of WESTERN POWER DISTRIBUTION (EAST MIDLANDS) PLC | ) ) ) ) |
Address: | Avonbank |
Feeder Road | |
Bristol BS2 0TB | |
Fax: | 44 (0) 1179 332 108 |
East Midlands - C onformed Copy |
Signed by: ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) | ) ) ) ) ) ) |
Address: | 2 Triton Square |
Regents Place | |
London NW1 3AN | |
Attention: | Alejandro Ciruelos (for credit matters) |
Samuel Russell (for administration matters) | |
Fax: | +44 (0)20 7756 5816 |
with a copy to Jim Inches/ David Navalón Vaquero | |
Fax: | +44 (0)845 602 7837 |
East Midlands - C onformed Copy |
Signed by: for and on behalf of BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London, EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
East Midlands - C onformed Copy |
Signed by: for and on behalf of BARCLAYS BANK PLC | ) ) ) ) |
Address: | 5 The North Colonnade |
London E14 4BB | |
Fax: | +44 (0)20 7773 1840 |
East Midlands - C onformed Copy |
Signed by: CREDIT SUISSE AG, LONDON BRANCH | ) ) ) |
Address: | One Cabot Square |
London E14 4QJ | |
Fax: | +44 (0)20 888 8398 |
East Midlands - C onformed Copy |
Signed by: HSBC BANK PLC | ) ) ) |
Address: | Sharon daw |
West & Wales Corporate Banking Centre | |
3 Rivergate, Bristol, BS1 6ER | |
Fax: | +44 (0)8455 877941 |
East Midlands - C onformed Copy |
Signed by: LLOYDS BANK PLC | ) ) ) |
Address: | 10 Gresham Street |
London EC2V 7AE | |
Fax: | +44 (0)20 7158 3297 |
East Midlands - C onformed Copy |
Signed by: MIZUHO BANK, LTD. | ) ) ) ) |
Address: | Bracken House |
One Friday Street | |
London EC4M 9JA | |
Fax: | +44 (0)207 012 4301 |
East Midlands - C onformed Copy |
Signed by: THE ROYAL BANK OF SCOTLAND PLC | ) ) ) ) |
Address: | 7th Floor, 135 Bishopsgate |
London EC2M 3UR | |
Fax: | +44 (0)20 7085 8762 |
East Midlands - C onformed Copy |
Signed by: ROYAL BANK OF CANADA | ) ) ) |
Attention: | Mike Atherton/ Mark Goodin (for credit matters) |
Address: | Thames Court |
One Queenhithe | |
London EC4V 4DE | |
Fax: | +44 (0)20 7029 7912 |
Attention | David Banning/ Maggie Weiyan Tang/ Ahmed Awad/ Vinodkumar NalappadamVeetil |
(for administration matters) | |
Address: | Riverbank House |
2 Swan Lane | |
London EC4R 3BF | |
Fax: | +44 (0)20 7332 0036 |
East Midlands - C onformed Copy |
Signed by: ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) | ) ) ) ) ) ) ) |
Address: | 2 Triton Square |
Regents Place | |
London NW1 3AN | |
Attention: | Alejandro Ciruelos (for credit matters) |
Samuel Russell (for administration matters) | |
Fax: | +44 (0)20 7756 5816 |
with a copy to Jim Inches/ David Navalón Vaquero | |
Fax: | +44 (0)845 602 7837 |
East Midlands - C onformed Copy |
Signed by: BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
East Midlands - C onformed Copy |
Signed by: BARCLAYS BANK PLC | ) ) ) ) |
Address: | 5 The North Colonnade |
London E14 4BB | |
Fax: | +44 (0)20 7773 1840 |
East Midlands - C onformed Copy |
Signed by: CREDIT SUISSE AG, LONDON BRANCH | ) ) ) |
Address: | One Cabot Square |
London E14 4QJ | |
Fax: | +44 (0)20 888 8398 |
East Midlands - C onformed Copy |
Signed by: HSBC BANK PLC | ) ) ) |
Address: | Sharon daw |
West & Wales Corporate Banking Centre | |
3 Rivergate, Bristol, BS1 6ER | |
Fax: | +44 (0)8455 877941 |
East Midlands - C onformed Copy |
Signed by: LLOYDS BANK PLC | ) ) ) |
Address: | 10 Gresham Street |
London EC2V 7AE | |
Fax: | +44 (0)20 7158 3297 |
East Midlands - C onformed Copy |
Signed by: MIZUHO BANK, LTD. | ) ) ) ) |
Address: | Bracken House |
One Friday Street | |
London EC4M 9JA | |
Fax: | +44 (0)207 012 4301 |
East Midlands - C onformed Copy |
Signed by: ROYAL BANK OF CANADA | ) ) ) |
Attention: | Mike Atherton/ Mark Goodin (for credit matters) |
Address: | Thames Court |
One Queenhithe | |
London EC4V 4DE | |
Fax: | +44 (0)20 7029 7912 |
Attention: | David Banning/ Maggie Weiyan Tang/ Ahmed Awad/ Vinodkumar NalappadamVeetil |
(for administration matters) | |
Address: | Riverbank House |
2 Swan Lane | |
London EC4R 3BF | |
Fax: | +44 (0)20 7332 0036 |
East Midlands - C onformed Copy |
Signed by: THE ROYAL BANK OF SCOTLAND PLC | ) ) ) ) |
Address: | 7th Floor, 135 Bishopsgate |
London EC2M 3UR | |
Fax: | +44 (0)20 7085 8762 |
East Midlands - C onformed Copy |
Signed by: BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London, EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
East Midlands - C onformed Copy |
Signed by: BANK OF AMERICA MERRILL LYNCH INTERNATIONAL LIMITED | ) ) ) |
Address: | King Edward Street |
London, EC1A 1HQ | |
Fax: | +44 (0)20 7995 2886 |
East Midlands - C onformed Copy |
Signed by for and on behalf of MIZUHO BANK, LTD. | ) ) ) |
Address: | Bracken House |
One Friday Street | |
London EC4M 9JA | |
Fax: | +44 (0)207 012 4053 |
East Midlands - C onformed Copy |
Signed by for and on behalf of HSBC BANK PLC | ) ) ) |
Address: | Sharon daw |
West & Wales Corporate Banking Centre | |
3 Rivergate, Bristol, BS1 6ER | |
Fax: | +44 (0)8455 877941 |
East Midlands - C onformed Copy |
C L I F F O R D | CLIFFORD CHANCE LLP |
C H A N C E |
CONFORMED COPY | |||
WESTERN POWER DISTRIBUTION PLC AS THE BORROWER HSBC BANK PLC AND MIZUHO BANK, LTD. AS MANDATED LEAD ARRANGERS AND MIZUHO BANK, LTD. AS FACILITY AGENT | |||
£130,000,000 TERM FACILITY AGREEMENT |
CONTENTS | |
Clause | Page |
1 | Interpretation | 1 |
2 | The Facility | 20 |
3 | Purpose | 22 |
4 | Conditions Precedent | 22 |
5 | Utilisation | 23 |
6 | Repayment | 24 |
7 | Prepayment and Cancellation | 24 |
8 | Interest | 27 |
9 | Terms | 28 |
10 | Changes To The Calculation Of Interest | 29 |
11 | Tax gross-up and indemnities | 31 |
12 | Increased Costs | 40 |
13 | Mitigation | 41 |
14 | Payments | 43 |
15 | Representations | 46 |
16 | Information Covenants | 50 |
17 | Financial Covenants | 53 |
18 | General Covenants | 57 |
19 | Default | 64 |
20 | Role of the Facility Agent and the Arranger | 68 |
21 | Conduct of business by the Finance Parties | 77 |
22 | Evidence and Calculations | 77 |
23 | Fees | 78 |
24 | Other Indemnities | 78 |
25 | Expenses | 79 |
26 | Amendments and Waivers | 80 |
27 | Changes to the Parties | 82 |
28 | Confidentiality and Disclosure of Information | 88 |
29 | Confidentiality of Funding Rates | 91 |
30 | Set-off | 93 |
31 | Pro rata sharing | 93 |
32 | Severability | 94 |
33 | Counterparts | 95 |
34 | Notices | 95 |
35 | Language | 97 |
36 | Governing law | 97 |
37 | Enforcement | 98 |
Schedule 1 Original Parties | 99 | |
Schedule 2 Conditions Precedent | 100 | |
Schedule 3 Requests | 101 | |
Part I Request | 101 | |
Part II Selection Notice | 102 | |
Schedule 4 Form of Transfer Certificate | 103 |
Schedule 5 Form of Assignment Agreement | 106 | |
Schedule 6 Form of Compliance Certificate | 109 | |
Schedule 7 Form of Increase Confirmation | 110 | |
Schedule 8 Timetables | 113 | |
Schedule 9 Forms of notifiable debt purchase transaction notice | 114 | |
Part I Form of notice on entering into notifiable debt purchase transaction | 114 | |
Part II Form of notice on termination of notifiable debt purchase transaction/notifiable | ||
debt purchase transaction ceasing to be with relevant person | 115 | |
Schedule 10 Form of Subordination Deed | 116 | |
Schedule 11 Form of Distribution Certificate | 128 |
(1) | WESTERN POWER DISTRIBUTION PLC (registered number 09223384) (the "Borrower"); |
(2) | HSBC BANK PLC and MIZUHO BANK, LTD. as mandated lead arrangers (whether acting individually or together the "Arranger"); |
(3) | THE FINANCIAL INSTITUTIONS listed in Schedule 1 (Original Parties) as original lenders (the "Original Lenders"); and |
(4) | MIZUHO BANK, LTD. as facility agent (the "Facility Agent"). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | the United States of America; |
(b) | the United Kingdom; or |
(c) | any other member state of the European Union or any Participating Member State where such country has long term sovereign credit rating of AA or higher by Standard & Poor's Rating Services or Aa2 or higher from Moody's Investors Service Limited or AA or higher from Fitch Ratings Ltd. |
(a) | the amount of its participation in any outstanding Loans; and |
(b) | in relation to any proposed Loans, the amount of its participation in any Loans that are due to be made on or before the proposed Drawdown Date. |
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
(b) | the rules for global systematically important banks contained in "Global systematically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III". |
(a) | the interest (excluding Margin) which that Lender would have received for the period from the date of receipt of any part of its share in a Loan or Unpaid Sum to the last day of the applicable Term for that Loan or Unpaid Sum if the principal or Unpaid Sum received had been paid on the last day of that Term; |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the applicable Term. |
(a) | in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Schedule 1 (Original Parties) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and |
(b) | in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase), |
(a) | any member of the Extended Group or any of its advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Extended Group or any of its advisers, |
(i) | information that: |
(A) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 28 (Confidentiality and disclosure of information); or |
(B) | is identified in writing at the time of delivery as non-confidential by any member of the Extended Group or any of its advisers; or |
(C) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and |
(ii) | any Funding Rate. |
(a) | Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and |
(b) | Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC. |
(a) | purchases by way of assignment or transfer; |
(b) | enters into any sub-participation in respect of; or |
(c) | enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of, |
(a) | an Event of Default; or |
(b) | an event or circumstance which would be (with the lapse of time, the expiry of a grace period, the giving of notice or the making of any determination under the Finance Documents or any combination of them) an Event of Default. |
(a) | which has failed to make its participation in a Loan available or has notified the Facility Agent that it will not make its participation in a Loan available by the Drawdown Date of that Loan in accordance with Clause 5.4 (Advance of Loan); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Finance Documents (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(a) | air (including, without limitation, air within natural or man-made structures, whether above or below ground); |
(b) | water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and |
(c) | land (including, without limitation, land under water). |
(a) | the pollution or protection of the Environment; |
(b) | the conditions of the workplace; or |
(c) | the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste. |
(a) | on or before the date it becomes a Lender; or |
(b) | by not less than five Business Days' notice, |
(a) | sections 1471 to 1474 of the Code or any associated regulations; |
(b) | any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or |
(c) | any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction. |
(a) | in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; |
(b) | in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or |
(c) | in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2019, |
(a) | this Agreement; |
(b) | a Fee Letter; |
(c) | a Transfer Certificate; |
(d) | an Assignment Agreement; |
(e) | a Request; or |
(f) | any other document designated as such by the Facility Agent and the Borrower. |
(a) | moneys borrowed; |
(b) | any acceptance credit; |
(c) | any bond, note, debenture, loan stock or other similar instrument; |
(d) | any redeemable preference share; |
(e) | the amount of any liability in respect of any finance or capital lease which would, in accordance with the Applicable Accounting Principles, be treated as a balance sheet liability; |
(f) | receivables sold or discounted (otherwise than on a non-recourse basis); |
(g) | the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset; |
(h) | any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account); |
(i) | any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition which has the commercial effect of a borrowing; |
(j) | any counter-indemnity obligation in respect of any guarantee, indemnity, bond, letter of credit or any other instrument issued by a bank or financial institution; or |
(k) | any guarantee, indemnity or similar assurance against financial loss of any person in respect of any item referred to in paragraphs (a) to (j) above. |
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; |
(b) | the Facility Agent otherwise rescinds or repudiates a Finance Document; |
(c) | (if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of "Defaulting Lender"; or |
(d) | an Insolvency Event has occurred and is continuing with respect to the Facility Agent, |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | an additional or increased cost; |
(b) | a reduction in the rate of return under a Finance Document or on a Finance Party's (or its Affiliate's) overall capital; or |
(c) | a reduction of an amount due and payable under any Finance Document, |
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation by it or such regulator, supervisor or similar official; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has a resolution passed for its winding up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(g) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in paragraph (d) above); |
(h) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured |
(i) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or |
(j) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Term of that Loan; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Term of that Loan, |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; |
(c) | similar principles, rights and defences under the laws of any jurisdiction in which a member of the Group or a Holding Company of the Borrower is incorporated; and |
(d) | any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinion provided under Schedule 2 (Conditions Precedent). |
(a) | an Original Lender; or |
(b) | any person which becomes a Lender after the date of this Agreement in accordance with Clause 2.2 (Increase) or Clause 27 (Changes to the Parties), |
(a) | the applicable Screen Rate as of the Specified Time for Sterling and for a period equal in length to the Term of that Loan; or |
(b) | as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rates), |
(a) | each electricity distribution licence made and treated as granted to a Distribution Company under Section 6(1)(c) of the Act pursuant to a licensing scheme made by the Secretary of State under Part II of Schedule 7 to the Utilities Act 2000 on 28 September, 2001; or |
(b) | any statutory amendment or replacement licence or licences granted pursuant to the Utilities Act 2000 (or any equivalent legislation which supersedes the Utilities Act 2000) which permit a Distribution Company to distribute electricity in the area it is certified to operate in. |
(a) | whose share in the outstanding Loans and whose undrawn Commitments then aggregate 66⅔ per cent. or more of the aggregate of all the outstanding Loans and the undrawn Commitments of all the Lenders; |
(b) | if there are no Loans then outstanding, whose undrawn Commitments then aggregate 66⅔ per cent. or more of the Total Commitments; or |
(c) | if there are no Loans then outstanding and the Total Commitments have been reduced to zero, whose Commitments aggregated 66⅔ per cent. or more of the Total Commitments immediately before the reduction. |
(a) | at least one of Moody's Investors Service Limited ("Moody's") and Standard & Poor's Ratings Services ("Standard & Poor's") has provided a rating (being an issuer rating with respect to the Borrower from Moody's and a long-term corporate credit rating with respect to the Borrower from Standard & Poor's) (the "Ratings"); and |
(b) | no Event of Default is outstanding, |
Rating (Moody's) | Rating (Standard & Poor's) | Margin (per annum) |
Less than or equal to Ba1 | Less than or equal to BB+ | 2.00% |
Baa3 | BBB- | 1.60% |
Baa2 | BBB | 1.30% |
Baa1 | BBB+ | 1.10% |
More than or equal to A3 | More than or equal to A- | 0.90% |
(a) | the business, assets or financial condition of the Group taken as a whole; |
(b) | the ability of the Borrower to perform its payment obligations under the Finance Documents or its obligations under Clauses 17.3 (Interest Cover) or 17.4 (Asset Cover) of this Agreement; or |
(c) | the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
(a) | which carries out a Permitted Business; |
(b) | which is incorporated or established in England or the European Union; and |
(c) | in respect of which the Borrower has delivered to the Facility Agent, not later than three Business Days before the relevant member of the Group legally commits to make such acquisition, a certificate signed by two directors of the Borrower to which is attached a copy of the latest audited accounts (or if not available, management accounts) of the target entity giving calculations showing in reasonable detail that the Borrower would have remained in compliance with its obligations under Clause 17 (Financial Covenants) if the covenant tests had been recalculated for the most recently ended Measurement Period consolidating the financial statements of the target entity (consolidated if it has Subsidiaries) with the financial statements of the Group for such period on a pro forma basis and as if the consideration (including associated costs and expenses) for the proposed acquisition had been paid at the start of that Measurement Period. |
(a) | a business that: |
(i) | possesses characteristics similar to the regulated business of a distribution network operator, as carried out by any of the Distribution Companies (a "DNO Business"); |
(ii) | provides facilities for and connected with a DNO Business; |
(iii) | is complementary or ancillary to the operation of a DNO Business or any other business already conducted by an entity within the Group; |
(iv) | provides services to any member of the Group which are currently provided by third parties; or |
(b) | any other business approved or consented to by the Facility Agent. |
(a) | for the purpose of determining a Lender's share in a Loan, the proportion which its Available Commitment bears to the Available Facility immediately prior to making the Loan; and |
(b) | for any other purpose on a particular date: |
(i) | the proportion which its Commitment bears to the Total Commitments on that date; or |
(ii) | if the Total Commitments have been cancelled, the proportion which its Commitments bore to the Total Commitments immediately before being cancelled. |
(a) | a subsidiary within the meaning of section 1159 of the Companies Act 2006; and |
(b) | unless the context otherwise requires, a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006. |
(a) | the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and |
(b) | the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate. |
(a) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and |
(b) | any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere. |
1.2 | Construction |
1.2.1 | The following definitions have the meanings given to them in Clause 17 (Financial Covenants): |
(a) | Cash; |
(b) | Cash Equivalent Investments; |
(c) | Consolidated EBITDA; |
(d) | Interest Payable; |
(e) | Regulatory Asset Value; and |
(f) | Total Net Debt. |
1.2.2 | In this Agreement, unless the contrary intention appears, a reference to: |
(a) | an amendment includes a supplement, novation, restatement or re-enactment and amended will be construed accordingly; |
(b) | assets includes present and future properties, revenues and rights of every description; |
(c) | an authorisation includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation; |
(d) | disposal means a sale, transfer, grant, lease or other disposal, whether voluntary or involuntary, and dispose will be construed accordingly; |
(e) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money; |
(f) | know your customer requirements are the identification checks that a Finance Party requests in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer; |
(g) | a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, joint venture or consortium), government, state, agency, organisation or other entity whether or not having separate legal personality; |
(h) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; |
(i) | the winding-up of a person includes the administration, dissolution or liquidation or other like process of that person, any composition or arrangement with the creditors, amalgamation, reconstruction, reorganisation or consolidation pursuant to Part XXVI of the Companies Act 2006 proposed or carried out in respect of that person or a company voluntary arrangement pursuant to the Insolvency Act 1986 carried out or proposed in respect of that person; |
(j) | a currency is a reference to the lawful currency for the time being of the relevant country; |
(k) | save as set out in the definition of Margin in Clause 1.1 (Definitions), a Default (other than an Event of Default) being outstanding means that it has not been remedied or waived and an Event of Default being outstanding means that it has not been waived; |
(l) | a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation; |
(m) | a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Agreement; |
(n) | a person includes its successors in title, permitted assigns and permitted transferees; |
(o) | a Finance Document or another document is a reference to that Finance Document or other document as amended; |
(p) | a "group of Lenders" includes all the Lenders; and |
(q) | a time of day is a reference to London time. |
1.2.3 | Unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: |
(a) | if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is not); |
(b) | if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and |
(c) | notwithstanding paragraph (a) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month in which it is to end, as appropriate. |
1.2.4 | Unless the contrary intention appears: |
(a) | a reference to a Party will not include that Party if it has ceased to be a Party under this Agreement; |
(b) | a word or expression used in any other Finance Document or in any notice given in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement; and |
(c) | any obligation of the Borrower under the Finance Documents which is not a payment obligation remains in force for so long as any payment obligation of the Borrower is or may be outstanding under the Finance Documents. |
1.2.5 | The headings in this Agreement do not affect its interpretation. |
1.2.6 | The determination of the extent to which a rate is "for a period equal in length" to a Term shall disregard any inconsistency arising from the last day of that Term being determined pursuant to the terms of this Agreement. |
1.3 | Third Party Rights |
1.3.1 | Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement. |
1.3.2 | Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time. |
1.4 | Currency symbols and definitions |
2. | THE FACILITY |
2.1 | The Facility |
2.2 | Increase |
2.2.1 | The Borrower may by giving prior notice to the Facility Agent by no later than the date falling 10 Business Days after the effective date of a cancellation of: |
(a) | the Available Commitments of a Defaulting Lender in accordance with sub-clause 7.6.3 of Clause 7.6 (Involuntary prepayment and cancellation); or |
(b) | the Commitments of a Lender in accordance with Clause 7.1 (Mandatory prepayment – illegality), |
(c) | the increased Commitments will be assumed by one or more Eligible Institutions (each an "Increase Lender") which is acceptable to the Facility Agent (acting reasonably) each of which confirms in writing (whether in the relevant Increase Confirmation or otherwise) its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender in respect of those Commitments; |
(d) | the Borrower and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Borrower and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume; |
(e) | each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume; |
(f) | the Commitments of the other Lenders shall continue in full force and effect; and |
(g) | any increase in the Total Commitments shall take effect on the date specified by the Borrower in the notice referred to above or any later date on which the Facility Agent executes an otherwise duly completed Increase Confirmation delivered to it by the relevant Increase Lender. |
2.2.2 | The Agent shall, subject to sub-clause 2.2.3 below, as soon as reasonably practicable after receipt by it of a duly completed Increase Confirmation appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Increase Confirmation. |
2.2.3 | The Agent shall only be obliged to execute an Increase Confirmation delivered to it by an Increase Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender. |
2.2.4 | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as it would have been had it been an Original Lender. |
2.2.5 | Unless the Facility Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Borrower shall, on the date upon which the increase takes effect, pay to the Facility Agent (for its own account) a fee of £1,750 and the Borrower shall promptly on demand pay the Facility Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.2. |
2.2.6 | The Borrower may pay to the Increase Lender a fee in the amount and at the times agreed between the Borrower and the Increase Lender in a letter between the Borrower and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph. |
2.2.7 | Neither the Facility Agent nor any Lender shall have any obligation to find an Increase Lender and in no event shall any Lender whose Commitment is replaced by an Increase Lender be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents. |
2.2.8 | Clause 27.4 (Limitation of responsibility of Existing Lender) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: |
(a) | an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase; |
(b) | the "New Lender" were references to that "Increase Lender"; and |
(c) | a "re‑transfer" and "re-assignment" were references to respectively a "transfer" and "assignment"." |
2.3 | Finance Party's rights and obligations |
2.3.1 | The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. |
2.3.2 | The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from the Borrower is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with sub-clause 2.3.3 below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or other amount owed by the Borrower which relates to a Finance Party's participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by the Borrower. |
2.3.3 | A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents. |
3. | PURPOSE |
3.1 | Purpose |
3.2 | No obligation to monitor |
4. | CONDITIONS PRECEDENT |
4.1 | Conditions precedent documents |
4.1.1 | A Request may not be given until the Facility Agent has notified the Borrower and the Lenders that it has received (or, subject to all Lender consent, waived receipt of) all of the documents and evidence set out in Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent. The Facility Agent shall give this notification to the Borrower and the Lenders upon being so satisfied. |
4.1.2 | Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described |
4.2 | Further conditions precedent |
4.2.1 | the Repeating Representations are correct in all material respects; and |
4.2.2 | no Default is outstanding or would result from the Loan. |
4.3 | Maximum number |
5. | UTILISATION |
5.1 | Giving of Requests |
5.1.1 | The Borrower may borrow a Loan by giving to the Facility Agent a duly completed Request not later than the Specified Time. |
5.1.2 | Each Request is irrevocable. |
5.2 | Completion of Requests |
5.2.1 | the Drawdown Date is a Business Day falling within the Availability Period; |
5.2.2 | the currency and amount of the proposed Loan comply with Clause 5.3 (Currency and amount); and |
5.2.3 | the proposed Term complies with this Agreement. |
5.3 | Currency and amount |
5.3.1 | The currency specified in a Request must be Sterling. |
5.3.2 | The amount of the proposed Loan must be a minimum of £5,000,000 and an integral multiple of £1,000,000 or, if less, the Available Facility. |
5.4 | Advance of Loan |
5.4.1 | The Facility Agent must promptly notify each Lender of the details of the requested Loan and the amount of its share in that Loan. |
5.4.2 | The amount of each Lender's share of the Loan will be its Pro Rata Share on the proposed Drawdown Date. |
5.4.3 | No Lender is obliged to participate in a Loan if as a result: |
(a) | its share in the aggregate amount of the Loans would exceed its Commitment; or |
(b) | the aggregate amount of the Loans would exceed the Total Commitments. |
5.4.4 | If the conditions set out in this Agreement have been met, each Lender must make its share in the Loan available to the Facility Agent for the Borrower by no later than 2.00 pm on the Drawdown Date. |
5.4.5 | The Facility Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan in each case by the Specified Time. |
6. | REPAYMENT |
6.1 | Repayment of Loans |
6.1.1 | The Borrower must repay each Loan in full on the Final Maturity Date. |
6.1.2 | The Borrower may not re-borrow any part of the Facility which is repaid. |
7. | PREPAYMENT AND CANCELLATION |
7.1 | Mandatory prepayment - illegality |
7.1.1 | A Lender must notify the Borrower promptly if it becomes aware that it is unlawful in any jurisdiction for that Lender to perform any of its obligations under a Finance Document or to fund or maintain its share in any Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so. |
7.1.2 | After notification under sub-clause 7.1.1 above: |
(a) | the Borrower must repay or prepay the share of that Lender in each Loan made to it on the date specified in sub-clause 7.1.3 below; and |
(b) | the Available Commitment of that Lender will be immediately cancelled. |
7.1.3 | The date for repayment or prepayment of a Lender's share in a Loan will be: |
(a) | the Business Day following receipt by the Borrower of notice from the Lender under sub-clause 7.1.1 above; or |
(b) | if later, the latest date allowed by the relevant law, |
7.2 | Mandatory prepayment - change of control |
7.2.1 | within five days of such date, the Borrower shall give notice of such change of control to the Facility Agent; |
7.2.2 | the Lenders and the Borrower shall immediately enter into negotiations for a period of not more than 45 days from the date of the change of control with a view to agreeing whether the Facility shall continue to be made available and on what terms; |
7.2.3 | if no such agreement is reached within the said period of 45 days then: |
(a) | any Lender may on 10 days' notice to the Facility Agent and to the Borrower require the repayment of its share in each Loan and cancel its Commitment; and |
(b) | the Majority Lenders may on 10 days' notice to the Borrower require repayment in full of all outstanding Loans and cancel the Total Commitments; and |
7.2.4 | a Lender shall not be obliged to fund any further loans under the Facility during the negotiation period set out in sub-clause 7.2.2, and if no agreement is reached within such negotiation period, during the 10 day notice period set out in sub-clause 7.2.3. |
7.3 | Voluntary prepayment |
7.3.1 | The Borrower may, by giving not less than five Business Days' prior written notice to the Facility Agent, prepay any Loan at any time in whole or in part. |
7.3.2 | A prepayment of part of a Loan must be by an amount that reduces the amount of the Loan by a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
7.3.3 | Any prepayment of a Loan pursuant to this Clause 7.3 shall be applied pro rata to each Lender's participation in that Loan. |
7.4 | Automatic cancellation |
7.5 | Voluntary cancellation |
7.5.1 | The Borrower may, by giving not less than three Business Days' prior written notice to the Facility Agent, cancel the unutilised amount of the Total Commitments in whole or in part. |
7.5.2 | Partial cancellation of the Total Commitments must be by an amount that reduces the amount of the Loan by a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
7.5.3 | Any cancellation in part shall be applied against the Commitment of each Lender pro rata. |
7.6 | Involuntary prepayment and cancellation |
7.6.1 | If the Borrower is, or will be, required to pay to a Lender a Tax Payment or an Increased Cost, the Borrower may, while the requirement continues, give notice to the Facility Agent requesting prepayment and cancellation in respect of that Lender. |
7.6.2 | After notification under sub-clause 7.6.1 above: |
(a) | the Available Commitments of that Lender will be immediately cancelled; and |
(b) | the Borrower shall repay or prepay that Lender's participation in each Loan made to it on the last day of the current Term for that Loan or, if earlier, the date specified by the Borrower in its notification and such Lender's Commitment shall be cancelled on the date of such repayment or prepayment. |
7.6.3 | If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent five Business Days' notice of cancellation of the Available Commitment of that Lender. |
7.6.4 | On the notice referred to in sub-clause 7.6.3 above becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero. |
7.6.5 | The Facility Agent shall as soon as practicable after receipt of a notice referred to in sub-clause 7.6.3 above, notify all the Lenders. |
7.7 | No re-borrowing of Loans |
7.8 | Miscellaneous provisions |
7.8.1 | Any notice of prepayment and/or cancellation under this Agreement is irrevocable and must specify the relevant date(s) and the affected Loans and Commitments. The Facility Agent must notify the Lenders promptly of receipt of any such notice. |
7.8.2 | All prepayments under this Agreement must be made with accrued interest on the amount prepaid. No premium or penalty is payable in respect of any prepayment except for Break Costs. |
7.8.3 | The Majority Lenders may agree a shorter notice period for a voluntary prepayment or a voluntary cancellation. |
7.8.4 | No prepayment or cancellation is allowed except in accordance with the express terms of this Agreement. |
7.8.5 | Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may subsequently be reinstated. |
7.8.6 | If all or part of any Lender's participation in a Loan is repaid or prepaid, an amount of that Lender's Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. |
8. | INTEREST |
8.1 | Calculation of interest |
8.1.1 | Margin; and |
8.1.2 | LIBOR. |
8.2 | Payment of interest |
8.3 | Interest on overdue amounts |
8.3.1 | If the Borrower fails to pay any amount payable by it under the Finance Documents on its due date, it must immediately on demand by the Facility Agent pay interest on the overdue amount from its due date up to the date of actual payment, both before, on and after judgment. |
8.3.2 | Interest on an overdue amount is payable at a rate determined by the Facility Agent to be one per cent. per annum above the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan. For this purpose, the Facility Agent may (acting reasonably): |
(a) | select successive Terms of any duration of up to three months; and |
(b) | determine the appropriate Rate Fixing Day for that Term. |
8.3.3 | Notwithstanding sub-clause 8.3.2 above, if the overdue amount is a principal amount of a Loan and becomes due and payable prior to the last day of its current Term, then: |
(a) | the first Term for that overdue amount will be the unexpired portion of that Term; and |
(b) | the rate of interest on the overdue amount for that first Term will be one per cent. per annum above the rate then payable on that Loan. |
8.3.4 | Interest (if unpaid) on an overdue amount will be compounded with that overdue amount at the end of each of its Terms but will remain immediately due and payable. |
8.4 | Notification of rates of interest |
8.4.1 | The Facility Agent must promptly notify each relevant Party of the determination of a rate of interest under this Agreement. |
8.4.2 | The Facility Agent shall promptly notify the Borrower of each Funding Rate relating to a Loan. |
9. | TERMS |
9.1 | Selection |
9.1.1 | The Borrower may select the Term for a Loan in the relevant Request or (if the Loan has already been borrowed) in a Selection Notice. |
9.1.2 | Each Selection Notice for a Loan is irrevocable and must be delivered to the Facility Agent by the Borrower not later than the Specified Time. |
9.1.3 | If the Borrower fails to deliver a Selection Notice to the Facility Agent in accordance with sub-clause 9.1.2 above, the relevant Term will be one month. |
9.1.4 | Subject to this Clause, the Borrower may select a Term for each Loan of one, three or six months or any other period agreed between the Borrower and the Lenders in relation to the relevant Loan. |
9.1.5 | A Term for a Loan shall start on the Drawdown Date for that Loan or (if already made) on the last day of its preceding Term. |
9.2 | No overrunning the Final Maturity Date |
9.3 | Other adjustments |
9.3.1 | The Facility Agent and the Borrower may enter into such other arrangements as they may agree for the adjustment of Terms and the consolidation and/or splitting of Loans. |
9.3.2 | Subject to sub-clause 9.3.3 below, if two or more Terms in respect of Loans end on the same date, those Loans will, unless the Borrower specifies to the contrary in the Selection Notice for the next Term, be consolidated into, and treated as, a single Loan on the last day of the Term. |
9.3.3 | Subject to Clause 4.3 (Maximum Number) and Clause 5.2 (Completion of Requests) if the Borrower requests in a Selection Notice that a Loan be divided into two or more Loans, that Loan will, on the last day of its Term, be so divided into the amounts specified in that Selection Notice, having an aggregate amount equal to the amount of the Loan immediately before its division. |
9.4 | Notification |
10. | CHANGES TO THE CALCULATION OF INTEREST |
10.1 | Unavailability of Screen Rate |
10.1.1 | Interpolated Screen Rate: If no Screen Rate is available for LIBOR for the Term of a Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Term of that Loan. |
10.2 | Market disruption |
10.3 | Cost of funds |
10.3.1 | If this Clause 10.3 applies, the rate of interest on each Lender's share of the relevant Loan for the relevant Term shall be the percentage rate per annum which is the sum of: |
(a) | the Margin; and |
(b) | the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Term, |
10.3.2 | If this Clause 10.3 applies and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. |
10.3.3 | Any alternative basis agreed pursuant to sub-clause 10.3.2 above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties. |
10.3.4 | If this Clause 10.30 applies pursuant to Clause 10.2 (Market disruption) and: |
(a) | a Lender's Funding Rate is less than LIBOR; or |
(b) | a Lender does not supply a quotation by the time specified in paragraph (b) of sub-clause 10.3.1 above, |
10.4 | Notification to Borrower |
10.5 | Break Costs |
10.5.1 | The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of a Term for that Loan or Unpaid Sum. |
10.5.2 | Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Term in which they accrue. |
11. | TAX GROSS-UP AND INDEMNITIES |
11.1 | Definitions |
11.1.1 | In this Agreement: |
(a) | a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is: |
(A) | which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payment apart from section 18A of the CTA 2009; or |
(B) | in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made, and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or |
(A) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009; or |
(C) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA 2009) of that company; or |
(b) | a Lender which is a building society (as defined for the purpose of section 880 of the ITA) making an advance under a Finance Document. |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA 2009) of that company. |
(b) | does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively connected; and |
(c) | meets all other conditions which must be met under the Treaty for residents of such Treaty State to obtain full exemption from tax on interest imposed by the United Kingdom, except that for this purpose it shall be assumed that the following are satisfied: |
(i) | any condition which relates (expressly or by implication) to the amounts or terms of any Loan or the Finance Documents or any condition which relates (expressly or by implication) to there not being a special relationship between the Borrower and the Finance Party or between them both and another person; and |
11.1.2 | Unless a contrary indication appears, in this Clause 11 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination. |
11.2 | Tax gross-up |
11.2.1 | The Borrower shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
11.2.2 | The Borrower shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower. |
11.2.3 | If a Tax Deduction is required by law to be made by the Borrower, the amount of the payment due from the Borrower shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
11.2.4 | A payment shall not be increased under sub-clause 11.2.3 above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due: |
(a) | the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or |
(b) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | an officer of HM Revenue & Customs has given (and not revoked) a direction (a "Direction") under section 931 of the ITA which relates to the payment and that Lender has received from the Borrower a certified copy of that Direction; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or |
(c) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | the relevant Lender has not given a Tax Confirmation to the Borrower; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Borrower on the basis that the Tax Confirmation would have enabled the Borrower to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of section 930 of the ITA; or |
(d) | the relevant Lender is a Treaty Lender and the Borrower making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under sub-clause 11.2.7 below. |
11.2.5 | If the Borrower is required to make a Tax Deduction, the Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
11.2.6 | Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment a statement under Section 975 of the ITA, or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. |
(a) | Subject to paragraph (b) below, a Treaty Lender and the Borrower which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Borrower to obtain authorisation to make that payment without a Tax Deduction. |
(b) | Nothing in paragraph (a) above shall require a Treaty Lender to: |
(i) | register under the HMRC DT Treaty Passport scheme; |
(ii) | apply the HMRC DT Treaty Passport scheme to any Loan if it has so registered; or |
(iii) | file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with sub-clause 11.2. below or sub-clause 11.6.1 of Clause 11.6 (HMRC DT Treaty Passport scheme confirmation) and the Borrower making that payment has not complied with its obligations under sub-clause 11.2.10 below or sub-clause 11.6.2 of Clause 11.6 (HMRC DT Treaty Passport scheme confirmation). |
11.2.8 | A UK Non-Bank Lender shall promptly notify the Borrower and the Facility Agent if there is any change in the position from that set out in the Tax Confirmation. |
11.2.9 | A Treaty Lender which is an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Borrower) by including its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1 (Original Parties). |
11.2.10 | Where a Lender includes the indication described in sub-clause 11.2.9 above in Schedule 1 (Original Parties), the Borrower shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing provided that the Borrower shall not be liable in respect of any non-compliance with its obligations under this sub-clause 11.2.10 where such non-compliance is due to circumstances beyond the control of the Borrower (including, without limitation, any delay, failure or omission on the part of the relevant Lender or the Facility Agent to comply with any obligation owed to the Borrower, or to any inaccuracy in any information provided by the relevant Lender or the Facility Agent in connection with the DT Treaty Passport scheme). |
11.2.11 | Any Lender which has confirmed that it is entitled to use its DT Treaty Passport in accordance with sub-clause 11..9 or sub-clause 11.6.1 of Clause 11.6. (HMRC DT Treaty Passport scheme confirmation) will reasonably promptly notify the Facility Agent and the Borrower if at any time it ceases to holds a passport under the HMRC DT Treaty Passport scheme or if it ceases to be able to use such passport as a Lender. |
11.2.12 | If a Lender has not included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with sub-clause 11.2.9 above or sub-clause 11.6.1 of Clause 11.6 (HMRC DT Treaty Passport scheme confirmation), the Borrower shall not file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment or its participation in any Loan. |
11.3 | Tax indemnity |
11.3.1 | Except as provided below, the Borrower must indemnify a Finance Party, within three Business Days of demand, against any loss or liability which that Finance Party (in its absolute discretion) determines will be or has been suffered (directly or indirectly) by that Finance Party for or on account of Tax in relation to a payment received or receivable (or any payment deemed to be received or receivable) under a Finance Document. |
11.3.2 | Sub-clause 11.3. above does not apply to any Tax assessed on a Finance Party under the laws of the jurisdiction in which: |
(a) | that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(b) | that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
11.3.3 | Sub-clause 11.3.1 above does not apply to any Tax assessed on a Finance Party to the extent the loss or liability: |
(a) | is compensated for by an increased payment under Clause 11.2 (Tax gross-up); |
(b) | would have been compensated for by an increased payment under Clause 11.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in Clause 11.2 (Tax gross-up) applied; or |
(c) | relates to a FATCA Deduction required to be made by a Party. |
11.3.4 | A Finance Party making, or intending to make, a claim under sub-clause 11.3.1 above must promptly notify the Borrower of the event which will give, or has given, rise to the claim. |
11.4 | Tax Credit |
11.4.1 | a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and |
11.4.2 | that Finance Party has obtained and utilised that Tax Credit, |
11.5 | Lender Status Confirmation |
11.5.1 | not a Qualifying Lender; |
11.5.2 | a Qualifying Lender (other than a Treaty Lender); or |
11.5.3 | a Treaty Lender. |
11.6 | HMRC DT Treaty Passport scheme confirmation |
11.6.1 | A Treaty Lender which is not an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Borrower) in the documentation which it executes on becoming a Party as a Lender by including its scheme reference number and its jurisdiction of tax residence in that documentation. |
11.6.2 | Where a New Lender or Increase Lender includes the indication described in sub-clause 11.6.1 above in the relevant documentation which it executes on becoming a Party as a Lender, the Borrower shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the relevant Transfer Date or the date on which such increase takes effect and shall promptly provide the Lender with a copy of that filing. |
11.7 | Stamp taxes |
11.8 | VAT |
11.8.1 | All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply and, accordingly, subject to sub-clause 11.8.2 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party). |
11.8.2 | If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance |
(a) | (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (a) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and |
(b) | (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT. |
11.8.3 | Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. |
11.8.4 | Any reference in this Clause 11.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994). |
11.8.5 | In relation to any supply made by a Finance Party to any Party under a Finance Document if reasonably requested by such Finance Party that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply. |
11.9 | FATCA Information |
11.9.1 | Subject to sub-clause 11.9.3 below, each Party shall, within ten Business Days of a reasonable request by another Party: |
(a) | confirm to that other Party whether it is: |
(i) | a FATCA Exempt Party; or |
(ii) | not a FATCA Exempt Party; |
(b) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and |
(c) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime. |
11.9.2 | If a Party confirms to another Party pursuant to paragraph (a) of sub-clause 11.9.1 above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
11.9.3 | Sub-clause 11.9.1 above shall not oblige any Finance Party to do anything, and paragraph (c) of sub-clause 11.9.1 above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(a) | any law or regulation; |
(b) | any fiduciary duty; or |
(c) | any duty of confidentiality. |
11.9.4 | If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraphs (a) or (b) of sub-clause 11.9.1 above (including, for the avoidance of doubt, where sub-clause 11.9.3 above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
11.10 | FATCA Deduction |
11.10.1 | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. |
11.10.2 | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Facility Agent and the Facility Agent shall notify the other Finance Parties. |
12. | INCREASED COSTS |
12.1 | Increased Costs |
12.1.1 | the introduction of, or any change in, or any change in the interpretation, administration or application of, any law or regulation; |
12.1.2 | compliance with any law or regulation made after the date of this Agreement; |
12.1.3 | the implementation or application of, or compliance with, Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV to the extent such increased costs were not reasonably capable of being accurately calculated prior to the date of this Agreement; or |
12.1.4 | compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any law or regulation made under, or connected with, that Act. |
12.2 | Exceptions |
12.2.1 | compensated for under another Clause or would have been but for an exception to that Clause; |
12.2.2 | attributable to a Tax Deduction required by law to be made by the Borrower; |
12.2.3 | compensated for by Clause 11.3 (Tax indemnity) (or would have been compensated for under Clause 11.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in sub-clause 11.3.2 or 11.3.3 of Clause 11.3 (Tax indemnity) applied); |
12.2.4 | attributable to a FATCA Deduction required to be made by a Party; |
12.2.5 | attributable to a Finance Party or its Affiliate wilfully failing to comply with any law or regulation; or |
12.2.6 | attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) ("Basel II") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates). |
12.3 | Claims |
13. | MITIGATION |
13.1 | Mitigation |
13.1.1 | Each Finance Party shall, in consultation with the Borrower (other than upon the occurrence of an event referred to at paragraph (d) below where no such consultation is required), take all reasonable steps to mitigate any circumstances which arise and which result or would result in the Facility ceasing to be available or: |
(a) | any Tax Payment or Increased Cost being payable to that Finance Party; |
(b) | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
(c) | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; or |
(d) | the occurrence of any market disruption event, |
13.1.2 | A Finance Party is not obliged to take any step under this Clause 13 if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
13.1.3 | Each Finance Party must promptly notify the Borrower of any circumstances as described in paragraphs (a) to (d) of sub-clause 13.1.1 of this Clause 13.1. |
13.1.4 | The Borrower must indemnify each Finance Party for all costs and expenses reasonably incurred by it as a result of any step taken under this Clause 13.1. |
13.1.5 | This Clause does not in any way limit the obligations of the Borrower under the Finance Documents. |
13.2 | Substitution |
13.2.1 | any Tax Payment or Increased Cost being payable to that Finance Party; |
13.2.2 | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
13.2.3 | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; or |
13.2.4 | the occurrence of any market disruption event, |
13.2.5 | the Borrower shall have paid to the Finance Party (or, if applicable, its Affiliate) all amounts accrued and owing to such Finance Party (or, if applicable, its Affiliate) hereunder; |
13.2.6 | the Borrower shall have no right to replace the Facility Agent; |
13.2.7 | neither the Facility Agent nor such Finance Party shall have any obligation to the Borrower to find a Replacement Finance Party; |
13.2.8 | the transfer must take place no later than 14 days after the notice referred to above; |
13.2.9 | in no event shall such Finance Party be required to pay or surrender to the Replacement Finance Party any of the fees received by such Finance Party pursuant to the Finance Documents; and |
13.2.10 | the Finance Party shall only be obligated to transfer its rights and obligations pursuant to this Clause 13.2 once it is satisfied that it has complied with all necessary "know your customer requirements" or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Finance Party. |
13.2.11 | the relevant Finance Party shall have mitigated the effect of the relevant event or circumstance as provided in sub-clause 13.1.1 of Clause 131 (Mitigation), and the novation would have no greater or further mitigating effect; or |
13.2.12 | the relevant event or circumstances are applicable to all Finance Parties. |
13.3 | Conduct of business by a Finance Party |
13.3.1 | interfere with the right of any Finance Party to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit or oblige any Finance Party to investigate or claim any Tax Credit; or |
13.3.2 | oblige any Finance Party to disclose any information relating to its affairs (Tax or otherwise) or any computation in respect of Tax. |
14. | PAYMENTS |
14.1 | Place |
14.2 | Funds |
14.3 | Distribution |
14.3.1 | Each payment received by the Facility Agent under the Finance Documents for another Party must, except as provided below, be made available by the Facility Agent to that Party by payment (as soon as practicable after receipt) to its account with such office or bank in the principal financial centre of the country of that currency, as it may notify to that Party for this purpose by not less than five Business Days' prior notice. |
14.3.2 | The Facility Agent may apply any amount received by it for the Borrower in or towards payment (as soon as practicable after receipt) of any amount due from the Borrower under the Finance Documents or in or towards the purchase of any amount of any currency to be so applied. |
14.3.3 | Where a sum is paid to the Facility Agent under this Agreement for another Party, the Facility Agent is not obliged to pay that sum to that Party (or enter into or perform any related exchange contract) until it has established that it has actually received it. However, the Facility Agent may assume that the sum has been paid to it, and, in reliance on that assumption, make available to that Party a corresponding amount. Unless sub-clause 14.3.4 applies, if it transpires that the sum has not been received by the Facility Agent, that Party must immediately on demand by the Facility Agent refund any corresponding amount made available to it together with interest on that amount from the date of payment to the date of receipt by the Facility Agent at a rate calculated by the Facility Agent to reflect its cost of funds. |
14.3.4 | If the Facility Agent has notified the Lenders that it is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case |
(a) | the Borrower shall on demand refund it to the Facility Agent; and |
(b) | the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender. |
14.4 | Currency of account |
14.4.1 | Subject to sub-clauses 14.4.2 and 14.4.3 below, Sterling is the currency of account and payment for any sum due from the Borrower under any Finance Document. |
14.4.2 | Amounts payable in respect of costs and expenses and Taxes are payable in the currency in which they are incurred. |
14.4.3 | Any amount expressed to be payable in a currency other than Sterling shall be paid in that other currency. |
14.5 | No set-off or counterclaim |
14.6 | Business Days |
14.6.1 | If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment will instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not) or whatever day the Facility Agent determines is market practice. |
14.6.2 | During any extension of the due date for payment of any principal (or overdue amount) under this Agreement interest is payable on that principal (or overdue amount) at the rate payable on the original due date. |
14.7 | Impaired Agent |
14.7.1 | If, at any time, the Facility Agent becomes an Impaired Agent, the Borrower or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with Clause 14.1 (Place) may instead either pay that amount direct to the required recipient or pay that amount to an interest bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Borrower or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents. |
14.7.2 | All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements. |
14.7.3 | A Party which has made a payment in accordance with this Clause 14.7 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account. |
14.7.4 | Promptly upon the appointment of a successor Facility Agent in accordance with Clause 20.13 (Replacement of the Facility Agent), each Party which has made a payment to a trust account in accordance with this Clause 14.7 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Facility Agent for distribution in accordance with Clause 14.3 (Distribution). |
14.7.5 | For the purposes of this Clause 14.7 only, an Acceptable Bank shall include any bank or financial institution approved by the Facility Agent or, if the Facility Agent is an Impaired Agent, the Majority Lenders. |
14.8 | Partial payments |
14.8.1 | If any Administrative Party receives a payment insufficient to discharge all the amounts then due and payable by the Borrower under the Finance Documents, the Administrative Party must apply that payment towards the obligations of the Borrower under the Finance Documents in the following order: |
(a) | first, in or towards payment pro rata of any unpaid amounts owing to the Administrative Parties under the Finance Documents; |
(b) | secondly, in or towards payment pro rata of any accrued interest or fee due but unpaid under this Agreement; |
(c) | thirdly, in or towards payment pro rata of any principal amount due but unpaid under this Agreement; and |
(d) | fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
14.8.2 | The Facility Agent must, if so directed by all the Lenders, vary the order set out in paragraphs (b) to (d) of sub-clause 14.8.1 of this Clause 14.8. |
14.8.3 | This Clause will override any appropriation made by the Borrower. |
14.9 | Timing of payments |
15. | REPRESENTATIONS |
15.1 | Representations |
15.2 | Status |
15.3 | Powers and authority |
15.4 | Legal validity |
15.5 | Non-conflict |
15.5.1 | any law or regulation applicable to it and violation of which has or is likely to have a Material Adverse Effect; or |
15.5.2 | its constitutional documents. |
15.6 | No default |
15.6.1 | No Event of Default is outstanding or might reasonably be expected to result from the making of any Loan. |
15.6.2 | No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which might have a Material Adverse Effect. |
15.7 | Authorisations |
15.7.1 | in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents; and |
15.7.2 | to make the Finance Documents admissible in evidence in England and Wales, |
15.8 | Financial statements |
15.8.1 | have been prepared in accordance with accounting principles and practices generally accepted in its jurisdiction of incorporation, consistently applied; and |
15.8.2 | fairly present its consolidated financial condition as at the date to which they were drawn up, |
15.9 | No material adverse change |
15.10 | Litigation |
15.10.1 | No litigation, arbitration or administrative proceedings are current or, to its knowledge, pending or threatened, which, if adversely determined, are reasonably likely to have a Material Adverse Effect. |
15.10.2 | No judgment or order of a court, arbitral body or agency which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief having made due and careful enquiry) been made against it or any of its Subsidiaries. |
15.11 | Winding Up |
15.12 | Non-Violation of other Agreements |
15.13 | Governing Law and Enforcement |
15.13.1 | The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation. |
15.13.2 | Any judgement obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation. |
15.14 | Deduction of Tax |
15.14.1 | a Qualifying Lender: |
(a) | falling within paragraph (a)(i) of the definition of Qualifying Lender; or |
(b) | except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (a)(ii) of the definition of Qualifying Lender; or |
(c) | falling within paragraph (b) of the definition of Qualifying Lender; or |
15.14.2 | a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488). |
15.15 | No filing or stamp taxes |
15.16 | No misleading information |
15.16.1 | Any factual information provided by any member of the Group to any Finance Party in connection with the Facility was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated. |
15.16.2 | Nothing has occurred or been omitted from the information provided to any Finance Party in connection with the Facility and no information has been given or withheld that results in the information provided being untrue or misleading in any material respect. |
15.17 | Pari Passu ranking |
15.18 | Licence |
15.19 | Anti-corruption law |
15.20 | Sanctions |
15.21 | Times for making representations |
15.21.1 | The representations set out in this Clause are made by the Borrower on the date of this Agreement. |
15.21.2 | The representations in Clauses 15.2 to 15.9 (inclusive), 15.10, 15.12, and 15.13, are deemed to be repeated by the Borrower on the date of each Request and the first day of each Term. |
15.21.3 | When a representation is repeated, it is applied to the circumstances existing at the time of repetition. |
16. | INFORMATION COVENANTS |
16.1 | Financial statements |
16.1.1 | The Borrower must supply to the Facility Agent (in sufficient copies for all the Lenders if the Facility Agent so requests): |
(a) | its and each of the Distribution Companies' audited consolidated financial statements for each of their financial years; and |
(b) | its interim consolidated financial statements for the first half-year of each of its financial years. |
16.1.2 | All financial statements must be supplied as soon as they are available and: |
(a) | in the case of the Borrower's and each of the Distribution Companies' audited consolidated financial statements, within 180 days; and |
(b) | in the case of the Borrower's interim financial statements, within 90 days, |
16.2 | Form of Financial Statement |
16.2.1 | the Borrower and the Facility Agent (on behalf of and after consultation with all the Lenders) shall, on the request of the Facility Agent or the Borrower, negotiate in good faith with a view to agreeing such amendments to the financial ratios and/or the definitions of the terms used in Clause 17 (Financial covenants) as are necessary to give the Lenders comparable protection to that contemplated at the date of this Agreement; |
16.2.2 | if amendments are agreed by the Borrower and the Majority Lenders within 25 days, those amendments shall take effect in accordance with the terms of that agreement; and |
16.2.3 | if such amendments are not so agreed within 25 days, the Borrower shall: |
(a) | within 30 days after the end of that 25 day period; and |
(b) | with all subsequent financial statements to be delivered to the Facility Agent under Clause 16.1, |
16.3 | Compliance Certificate |
16.3.1 | The Borrower must supply to the Facility Agent a Compliance Certificate with each set of its financial statements sent to the Facility Agent under this Agreement. |
16.3.2 | Each Compliance Certificate must be signed by two directors of the Borrower. |
16.4 | Information - miscellaneous |
16.4.1 | copies of all documents despatched by the Borrower to its creditors generally (or any class of them) at the same time as they are despatched; |
16.4.2 | promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group and which might, if adversely determined, have a Material Adverse Effect; |
16.4.3 | promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any member of the Group, and which might have a Material Adverse Effect; |
16.4.4 | promptly, details of the loss of any Licence or any communication from OFGEM or other government agency regarding any potential or threatened loss of any Licence; |
16.4.5 | promptly, details of any modification of an authorisation or other material regulatory notices received by any Distribution Company from OFGEM or any other government agency; |
16.4.6 | a copy of all material information relating to any matter which is reasonably likely to have a Material Adverse Effect which any Distribution Company supplies to, or receives from, any applicable regulatory body (including OFGEM) (at the same time as it is supplied to, or promptly following its receipt from, the applicable regulatory body); |
16.4.7 | written notice of the details of any proposed changes to the Licence as soon as reasonably practicable after becoming aware of the same (other than changes of a formal, minor or technical nature); |
16.4.8 | within five Business Days of receiving them, details of any change to the Rating by Moody's or Standard & Poor's; |
16.4.9 | the Borrower shall deliver to the Facility Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the Borrower), actuarial reports in relation to all pension schemes mentioned in sub-clause 18.15.2 of Clause 18.15 (Pensions). This obligation shall apply to only those pension schemes (or groups of the Electricity Supply Pension Scheme) of which the Borrower is at that time a participating employer and to those reports which have been provided to the Borrower; and |
16.4.10 | promptly on request, such further information regarding the financial condition, business and operations of the Group as any Finance Party through the Facility Agent may reasonably request. |
16.5 | Notification of Default |
16.5.1 | The Borrower must notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. |
16.5.2 | Promptly on request by the Facility Agent, the Borrower must supply to the Facility Agent a certificate signed by two of its directors on its behalf, certifying that no Default is outstanding or, if a Default is outstanding, specifying the Default and the steps, if any, being taken to remedy it. |
16.6 | Use of websites |
16.6.1 | Except as provided below, the Borrower may deliver any information under this Agreement to a Lender by posting it on to an electronic website if: |
(a) | the Facility Agent and the Lender agree; |
(b) | the Borrower and the Facility Agent designate an electronic website for this purpose; |
(c) | the Borrower notifies the Facility Agent of the address of and password for the website; and |
(d) | the information posted is in a format agreed between the Borrower and the Facility Agent. |
16.6.2 | Notwithstanding the above, the Borrower must supply to the Facility Agent in paper form a copy of any information posted on the website together with sufficient copies for: |
(a) | any Lender not agreeing to receive information via the website; and |
(b) | any other Lender within ten Business Days of request by that Lender. |
16.6.3 | The Borrower must promptly upon becoming aware of its occurrence, notify the Facility Agent if: |
(a) | the website cannot be accessed; |
(b) | the website or any information on the website is infected by any electronic virus or similar software; |
(c) | the password for the website is changed; or |
(d) | any information to be supplied under this Agreement is posted on the website or amended after being posted. |
16.7 | Know your customer requirements |
16.7.1 | If: |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(b) | any change in the status of the Borrower (or a Holding Company of a Borrower) after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
17. | FINANCIAL COVENANTS |
17.1 | Definitions |
(a) | that cash is repayable: |
(i) | if that cash is deposited with a Lender, within 180 days after the relevant date of calculation; or |
(ii) | if that cash is deposited with any other lender or financial institution, within 45 days after the relevant date of calculation; |
(b) | repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition; |
(c) | there is no Security Interest over that cash other than Security Interests permitted under paragraph (b) of sub-clause 18.5.3 of Clause 18.5 (Negative pledge); and |
(d) | the cash is freely and (except as mentioned in paragraph (a) above) immediately available to be applied in repayment or prepayment of the Facility. |
(a) | certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank; |
(b) | any investment in marketable debt obligations issued or guaranteed by the government of an Acceptable Jurisdiction or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; |
(c) | commercial paper not convertible or exchangeable to any other security: |
(i) | for which a recognised trading market exists; |
(ii) | issued by an issuer incorporated in an Acceptable Jurisdiction; |
(iii) | which matures within one year after the relevant date of calculation; and |
(iv) | which has a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investors Service Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
(d) | Sterling bills of exchange eligible for rediscount at the Bank of England (or their dematerialised equivalent) and accepted by an Acceptable Bank; |
(e) | any investment in money market funds which: |
(i) | have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investors Service Limited; |
(ii) | invest substantially all their assets in securities of the types described in paragraphs (a) to (d) above; and |
(iii) | can be turned into cash on not more than 30 days' notice; or |
(f) | any other debt security approved by the Majority Lenders, |
(a) | adding back Interest Payable; |
(b) | taking no account of any exceptional or extraordinary item; |
(c) | excluding any amount attributable to minority interests; |
(d) | adding back depreciation and amortisation; and |
(e) | taking no account of any revaluation of an asset or any loss or gain over book value arising on the disposal of an asset (otherwise than in the ordinary course of trading) by a member of the Group during that Measurement Period. |
17.2 | Interpretation |
17.2.1 | Except as provided to the contrary in this Agreement, an accounting term used in this Clause is to be construed in accordance with the principles applied in connection with the Original Financial Statements. |
17.2.2 | Any amount in a currency other than Sterling is to be taken into account at its Sterling equivalent calculated on the basis of: |
(a) | the Agent's spot rate of exchange for the purchase of the relevant currency in the London foreign exchange market with Sterling at or about 11.00 a.m. on the day the relevant amount falls to be calculated; or |
(b) | if the amount is to be calculated on the last day of a financial period of the Borrower, the relevant rates of exchange used by the Borrower in, or in connection with, its financial statements for that period. |
17.2.3 | No item must be credited or deducted more than once in any calculation under this Clause. |
17.3 | Interest cover |
17.4 | Asset Cover |
17.4.1 | for the purpose of the calculations referred to in the Distribution Certificate pursuant to Clause 18.17 (Dividends and Distribution), 85%; and |
17.4.2 | in all other respects, 87.5%, |
17.5 | Calculation of Interest Payable |
18. | GENERAL COVENANTS |
18.1 | General |
18.2 | Authorisations |
18.3 | Compliance with laws |
18.4 | Pari passu ranking |
18.5 | Negative pledge |
18.5.1 | Except as provided below, none of the Borrower, any Distribution Company nor any Holding Company of a Distribution Company may create or allow to exist any Security Interest or Quasi-Security on any of its assets. |
18.5.2 | Except as provided below, none of the Borrower, any Distribution Company nor any Holding Company of a Distribution Company may: |
(a) | sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by the Borrower or any other member of the Group; |
(b) | sell, transfer or otherwise dispose of any of its receivables on recourse terms; |
(c) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
(d) | enter into any other preferential arrangement having a similar effect, |
18.5.3 | Sub-clauses 5.5.1 and 18.5.2 do not apply to: |
(a) | any Security Interest or Quasi-Security created over the assets of or any shares or other ownership interests in any entity which becomes a member of the Group after the date of this Agreement as a result of a Permitted Acquisition provided that the Security Interest or Quasi-Security is removed or discharged within 6 months of the date of such acquisition; |
(b) | any Security Interest or Quasi-Security created under or in connection with or arising out of the Balancing and Settlement Code or any transactions or arrangements entered into in connection with the management of risks relating thereto; |
(c) | in respect of overdue amounts which have not been overdue for more than 30 days and/or are being contested in good faith, liens arising solely by operation of law or by order of a court or tribunal (or by an agreement of similar effect) and/or in the ordinary course of day to day business or operations; |
(d) | any Security Interest or Quasi-Security arising out of title retention provisions in a supplier's standard conditions of supply of goods acquired in the ordinary course of business or operations; |
(e) | any Security Interest or Quasi-Security created on any asset acquired after the date of this Agreement for the sole purpose of financing or re-financing that acquisition and securing a principal, capital or nominal amount not exceeding the cost of that acquisition, provided that the Security Interest or Quasi-Security is removed or discharged within 6 months of the date of acquisition of such asset; |
(f) | any Security Interest or Quasi-Security outstanding on or over any asset acquired after the date of this Agreement and in existence at the date of such acquisition, provided that the Security Interest or Quasi-Security is removed or discharged within 6 months of the date of acquisition of such asset; |
(g) | any Security Interest or Quasi-Security created or outstanding on or over any asset of any company which becomes a Subsidiary of the Borrower after the date of this Agreement where such Security Interest or Quasi-Security is created prior to the date on which such company becomes a Subsidiary of the Borrower and is not created or increased in contemplation of such company being acquired and/or becoming a Subsidiary of the Borrower and the Security Interest or Quasi-Security is removed or discharged within 6 months of the date of such company becoming a Subsidiary of the Borrower; |
(h) | any Security Interest or Quasi-Security created on any asset to secure any Financial Indebtedness incurred in connection with the financing of any asset or project in respect of which the repayment of that Financial Indebtedness is to be made from the revenues arising out of, or other proceeds of realisation from, that asset or project, with recourse to those revenues and proceeds and other assets used in connection with, or forming the subject matter of, that asset or project but without recourse (or with such limited recourse as the Majority Lenders may from time to time agree) to any other assets of the Group; |
(i) | any netting arrangements under any swap or other hedging transaction which is on standard market terms; |
(j) | any Security Interest or Quasi-Security created or outstanding with the prior approval of the Majority Lenders; and |
(k) | any Security Interest or Quasi-Security created or outstanding on or over assets of: |
(i) | the Borrower provided that the aggregate outstanding principal or nominal amount secured by all Security Interests and Quasi-Security created or outstanding under this exception on or over such assets shall not at any time exceed £5,000,000 or its equivalent; and |
(ii) | a Distribution Company provided that the aggregate outstanding principal or nominal amount secured by all Security Interests and Quasi-Security created or outstanding under this exception on or over such assets shall not at any time exceed £20,000,000 or its equivalent for each Distribution Company. |
18.6 | Disposals |
18.6.1 | Except as provided below, no member of the Group may, either in a single transaction or in a series of transactions and whether related or not, dispose of all or any part of its assets (other than cash). |
18.6.2 | Sub-clause 18.6.1 does not apply to: |
(a) | any disposal made in the ordinary course of day to day business or operations of the disposing entity; |
(b) | disposals on normal commercial terms of obsolete assets or assets no longer required for the purpose of the relevant Person's business or operations; |
(c) | any realisation of investments acquired, purchased or made by the temporary application of funds not immediately required in the relevant Person's business or operations; |
(d) | the exchange of assets for other assets of a similar or superior nature and value (other than an exchange of a non-cash asset for cash), or the sale of assets on normal commercial terms for cash which is payable in full on the completion of the sale and is to be, and is, applied in or towards the purchase of similar assets within 6 months; |
(e) | the disposal of assets by one wholly-owned Subsidiary of the Borrower to another or (if the consideration for the disposal does not exceed a normal commercial consideration) to the Borrower by one of its Subsidiaries; |
(f) | disposals in connection with sale-and-leaseback or sale and repurchase transactions or any other form of "off balance sheet" financing, provided that the aggregate book value (in the books of the disposing party) of all assets the subject of all such disposals made during the period commencing on the date of this Agreement and ending on the date when no amount remains payable under this Agreement shall not exceed £100,000,000 or its equivalents; |
(g) | any disposal which the Majority Lenders shall have agreed shall not be taken into account; and |
(h) | any disposal of any assets (including shares) other than: |
(i) | any shares held in any Distribution Company or in any Holding Company of a Distribution Company; and |
(ii) | any assets of a Distribution Company, |
18.7 | Environmental matters |
18.7.1 | The Borrower will and will ensure that each Distribution Company will comply with all applicable Environmental Law and other regulations, orders or other law applicable to the conduct of the business of the supply or distribution of electricity, in each case, where failure to do so would have a Material Adverse Effect. |
18.7.2 | The Borrower will, promptly upon becoming aware of the same, inform the Facility Agent in writing of: |
(a) | any Environmental Claim against it or any Distribution Company which is current, pending or threatened; and |
(b) | any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against it or any Distribution Company, |
18.8 | Insurance |
18.9 | Merger |
18.10 | Change of business |
18.11 | Acquisitions |
18.11.1 | Except as provided below neither the Borrower nor any other member of the Group may acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them). |
18.11.2 | Provided that no Event of Default is outstanding on the date of the acquisition or would occur as a result of the acquisition, sub-clause 18.11.1 does not apply to: |
(a) | an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group as permitted under sub-clause 18.6.2 of Clause 18.6 (Disposals) above; |
(b) | any Permitted Acquisition; or |
(c) | any acquisition which the Majority Lenders shall have consented to in writing. |
18.12 | Prohibition on the Debt Purchase Transactions of the Group |
18.13 | Prohibition on Subsidiary Financial Indebtedness |
18.14 | Arm's length transactions |
18.15 | Pensions |
18.15.1 | The Borrower shall ensure that no action or omission is taken by any member of the Group in relation to a pension scheme which has or is reasonably likely to have a Material Adverse Effect (including, without limitation, the termination or commencement of winding-up proceedings of any such pension scheme). |
18.15.2 | Except in respect of WPD South Wales Plc for the Western Power Utilities Pension Scheme, the Infralec 92 Scheme and the WPD Group Electricity Supply Pension Scheme (and in the case of merger, the CN Group of the ESPS) the Borrower shall |
18.15.3 | The Borrower shall promptly notify the Facility Agent of any material change in the rate of contributions payable or paid by it to any of the pension schemes mentioned in sub-clause 18.15.2 above (whether required by law or otherwise). |
18.15.4 | The Borrower shall immediately notify the Facility Agent of any investigation or proposed investigation by the Pensions Regulator which may lead to the issue of a Financial Support Direction or a Contribution Notice to any member of the Group. |
18.15.5 | The Borrower shall immediately notify the Facility Agent if it receives a Financial Support Direction or a Contribution Notice from the Pensions Regulator. |
18.16 | Licence |
18.16.1 | comply with the terms of its Licence in all material respects; |
18.16.2 | without prejudice to the generality of sub-clause 18.16.1 above, comply with the ring fencing provisions of its Licence in all respects; and |
18.16.3 | not take any action or make any omission which is reasonably likely to result in the revocation or termination of its Licence. |
18.17 | Dividends and Distribution |
(a) | declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); |
(b) | repay or distribute any dividend or share premium reserve; |
(c) | pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of any of the shareholders of the Borrower; or |
(d) | redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so, |
18.18 | Sanctions |
18.18.1 | The Borrower shall ensure that neither it nor any other member of the Group shall be the subject of any Sanctions, and that no member of the Group shall be located, organised or resident in a country or territory that is the subject of country-wide or territory-wide Sanctions. |
18.18.2 | The Borrower undertakes to ensure that no member of the Group will, directly or indirectly, use the proceeds of the Facility, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, to fund any activities of or business with any Person, or in Burma/Myanmar, Syria, Cuba, Iran, North Korea, Sudan, the Crimea region or in any other country or territory, that, at the time of such funding, is the subject of country-wide or territory-wide Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the Facility) of Sanctions. |
18.18.3 | The Borrower shall ensure that the source of any funds for discharging its obligations under this Agreement is not obtained from any designated target of any Sanctions or any of Burma/Myanmar, Syria, Cuba, Iran, North Korea, Sudan, the Crimea region or any other country or territory, that, at the time of such payment, is the subject of country-wide or territory-wide Sanctions. |
18.19 | Anti-corruption law |
18.19.1 | The Borrower shall not (and shall ensure that no other member of the Group will) directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions. |
18.19.2 | The Borrower shall (and shall ensure that each other member of the Group will): |
(a) | conduct its business in compliance with applicable anti-corruption laws; and |
(b) | maintain policies and procedures designed to promote and achieve compliance with such laws. |
19. | DEFAULT |
19.1 | Events of Default |
19.2 | Non-payment |
19.2.1 | administrative or technical error; or |
19.2.2 | a Disruption Event, |
19.3 | Breach of other obligations |
19.3.1 | The Borrower does not perform or comply with its obligations under Clause 17 (Financial Covenants), Clause 18.5 (Negative pledge), Clause 18.6 (Disposals), Clause 18.11 (Acquisitions) or Clause 18.18 (Sanctions). |
19.3.2 | The representation and warranty by the Borrower in Clause 15.20 (Sanctions) is or proves to have been incorrect when made. |
19.3.3 | The Borrower does not perform or comply with any of its other obligations under any Finance Document (other than those referred to in Clause 19.2 (Non-payment) and in sub-clause 19.3.1 above) in any material respect or any representation or warranty by the Borrower in this Agreement (other than that referred to in sub-clause 19.3.2 above) or in any document delivered under this Agreement is or proves to have been incorrect when made or deemed repeated, unless the non‑compliance or circumstance giving rise to the misrepresentation, as the case may be, is capable of remedy and is not remedied within 15 Business Days of the earlier of the Facility Agent giving notice requiring the same to be remedied and the Borrower becoming aware of such non‑compliance or misrepresentation, as the case may be. |
19.4 | Cross-default |
19.4.1 | Any Financial Indebtedness of the Borrower or any Distribution Company is not paid when due nor within any originally applicable grace period. |
19.4.2 | Any Financial Indebtedness of the Borrower or any Distribution Company is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). |
19.4.3 | Any commitment for any Financial Indebtedness of the Borrower or any Distribution Company is cancelled or suspended by a creditor of that member of the Group as a result of an event of default (however described). |
19.4.4 | Any creditor of the Borrower or any Distribution Company becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described). |
19.4.5 | No Event of Default will occur under this Clause 19.4 unless and until the aggregate amount of such Financial Indebtedness falling within sub-clauses 19.4.1 to 19.4.4 above is more than £20,000,000 or its equivalent in any other currency or currencies. |
19.5 | Insolvency |
19.5.1 | Any of the following occurs in respect of the Borrower: |
(a) | it is unable to pay its debts generally as they fall due or it is deemed by a court of competent jurisdiction to be insolvent; |
(b) | it suspends making payments on all or any class of its debts or publicly announces an intention to do so; |
(c) | by reason of actual or anticipated financial difficulties, it begins negotiations with all or any class of its creditors for the general rescheduling of its indebtedness; or |
(d) | a moratorium is declared in respect of any of its indebtedness. |
19.5.2 | If a moratorium occurs in respect of the Borrower, the ending of the moratorium will not remedy any Event of Default caused by the moratorium. |
19.6 | Insolvency proceedings |
19.6.1 | Except as provided below, any of the following occurs in respect of the Borrower: |
(a) | a suspension of payments, a moratorium of any indebtedness or a reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise); |
(b) | any person presents a petition for its winding-up, administration or dissolution; |
(c) | an order for its winding-up, administration or dissolution is made; |
(d) | any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; |
(e) | its directors or other officers request the appointment of a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer; |
(f) | enforcement of any Security over any of its assets; or |
(g) | any other analogous step or procedure is taken in any jurisdiction. |
19.6.2 | Sub-clause 19.6.1 does not apply to: |
(a) | a petition for winding-up presented by a creditor which is being actively contested in good faith and with due diligence and with a reasonable prospect of success; or |
(b) | a voluntary solvent winding-up, amalgamation, reconstruction or reorganisation or otherwise part of a solvent scheme of arrangement, in each case which is on terms approved by the Majority Lenders. |
19.7 | Creditors' process |
19.8 | Licence |
19.8.1 | notice is given to revoke or terminate any Licence unless such termination is being contested in good faith and such notice is revoked or cancelled within 14 days of notice being given; or |
19.8.2 | any Licence is revoked, |
19.9 | Balancing and Settlement Code |
19.9.1 | Any Distribution Company ceases to be a party to the Balancing and Settlement Code Framework Agreement other than in circumstances where that Distribution Company is able to carry on its distribution business. |
19.9.2 | Any Distribution Company breaches the Balancing and Settlement Code and such breach has or is reasonably likely to have a Material Adverse Effect. |
19.10 | Unlawfulness and invalidity |
19.10.1 | It is or becomes unlawful for the Borrower to perform any of its obligations under the Finance Documents in any material respect. |
19.10.2 | Any obligation or obligations of the Borrower under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
19.11 | Cessation of business |
19.12 | Repudiation and rescission of agreements |
19.13 | Ownership of the Distribution Companies |
19.14 | Material Adverse Effect |
19.15 | Acceleration |
19.15.1 | cancel the Total Commitments; and/or |
19.15.2 | declare that all or part of any amounts outstanding under the Finance Documents are: |
(a) | immediately due and payable; and/or |
(b) | payable on demand by the Facility Agent acting on the instructions of the Majority Lenders. |
20. | ROLE OF THE FACILITY AGENT AND THE ARRANGER |
20.1 | Appointment of the Facility Agent |
20.1.1 | Each of the Arranger and the Lenders appoints the Facility Agent to act as its agent under and in connection with the Finance Documents. |
20.1.2 | Each of the Arranger and the Lenders authorises the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. |
20.2 | Instructions |
20.2.1 | The Facility Agent shall: |
(a) | unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by: |
(i) | all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and |
(ii) | in all other cases, the Majority Lenders; and |
(b) | not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (a) above. |
20.2.2 | The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion. The Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested. |
20.2.3 | Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties. |
20.2.4 | The Facility Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions. |
20.2.5 | In the absence of instructions, the Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders. |
20.2.6 | The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. |
20.3 | Duties of the Facility Agent |
20.3.1 | The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature. |
20.3.2 | Subject to sub-clause 20.3.3 below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party. |
20.3.3 | Without prejudice to Clause 27.7 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to the Borrower), sub-clause 20.3.2 above shall not apply to any Transfer Certificate, Assignment Agreement or Increase Confirmation. |
20.3.4 | Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
20.3.5 | If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties. |
20.3.6 | If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent or the Arranger) under this Agreement it shall promptly notify the other Finance Parties. |
20.3.7 | The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied). |
20.4 | Role of the Arranger |
20.5 | No fiduciary duties |
20.5.1 | Nothing in any Finance Document constitutes the Facility Agent or the Arranger as a trustee or fiduciary of any other person. |
20.5.2 | Neither the Facility Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account. |
20.6 | Business with the Group |
20.7 | Rights and discretions |
20.7.1 | The Facility Agent may: |
(a) | rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised; |
(b) | assume that: |
(i) | any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and |
(ii) | unless it has received notice of revocation, that those instructions have not been revoked; and |
(c) | rely on a certificate from any person: |
(i) | as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or |
(ii) | to the effect that such person approves of any particular dealing, transaction, step, action or thing, |
20.7.2 | The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that: |
(a) | no Default has occurred (unless it has actual knowledge of a Default arising under Clause 19.2 (Non-payment)); and |
(b) | any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised. |
20.7.3 | The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts. |
20.7.4 | Without prejudice to the generality of sub-clause 20.7.3 above or sub-clause 20.7.5 below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be necessary. |
20.7.5 | The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying. |
20.7.6 | The Facility Agent may act in relation to the Finance Documents through its officers, employees and agents. |
20.7.7 | Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. |
20.7.8 | Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Arranger is obliged to do or omit to do anything if it would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. |
20.7.9 | Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities |
20.8 | Responsibility for documentation |
20.8.1 | the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Arranger, the Borrower or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; |
20.8.2 | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or |
20.8.3 | any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise. |
20.9 | No duty to monitor |
20.9.1 | whether or not any Default has occurred; |
20.9.2 | as to the performance, default or any breach by any Party of its obligations under any Finance Document; or |
20.9.3 | whether any other event specified in any Finance Document has occurred. |
20.10 | Exclusion of liability |
20.10.1 | Without limiting sub-clause 20.10.2 below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for: |
(a) | any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct; |
(b) | exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document, other than by reason of its gross negligence or wilful misconduct; or |
(c) | without prejudice to the generality of paragraphs (a) and (b) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever (but not including any claim based on the fraud of the Facility Agent) arising as a result of: |
(i) | any act, event or circumstance not reasonably within its control; or |
(ii) | the general risks of investment in, or the holding of assets in, any jurisdiction, |
20.10.2 | No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.3 (Third party rights) and the provisions of the Third Parties Act. |
20.10.3 | The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose. |
20.10.4 | Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out: |
(a) | any "know your customer requirements" or other checks in relation to any person; or |
(b) | any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender or for any Affiliate of any Lender, |
20.10.5 | Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent's liability, any liability of the Facility Agent arising under or in connection with any Finance Document shall be limited to the amount of actual loss which has been suffered (as determined by reference to the date of default of the Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss. In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages. |
20.11 | Lenders' indemnity to the Facility Agent |
20.12 | Resignation of the Facility Agent |
20.12.1 | The Facility Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the Lenders and the Borrower. |
20.12.2 | Alternatively the Facility Agent may resign by giving 30 days' notice to the Lenders and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Facility Agent. |
20.12.3 | If the Majority Lenders have not appointed a successor Facility Agent in accordance with sub-clause 20.12.2 above within 20 days after notice of resignation was given, the retiring Facility Agent (after consultation with the Borrower) may appoint a successor Facility Agent (acting through an office in the United Kingdom). |
20.12.4 | If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under sub-clause 20.12.3 above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 20 and any other term of this Agreement dealing with the rights or obligations of the Facility Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Facility Agent's normal fee rates and those amendments will bind the Parties. |
20.12.5 | The retiring Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. |
20.12.6 | The Facility Agent's resignation notice shall only take effect upon the appointment of a successor. |
20.12.7 | Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under sub-clause 20.12.5 above) but shall remain entitled to the benefit of Clause 24.2.3 (Indemnity to the Facility Agent) and this Clause 20 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
20.12.8 | The Facility Agent shall resign in accordance with sub-clause 20.12.2 above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent pursuant to sub-clause 20.12.3 above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Facility Agent under the Finance Documents, either: |
(a) | the Facility Agent fails to respond to a request under Clause 11.9 (FATCA Information) and the Borrower or a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
(b) | the information supplied by the Facility Agent pursuant to Clause 11.9 (FATCA Information) indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or |
(c) | the Facility Agent notifies the Borrower and the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
20.13 | Replacement of the Facility Agent |
20.13.1 | After consultation with the Borrower, the Majority Lenders may, by giving 30 days' notice to the Facility Agent (or, at any time the Facility Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Facility Agent by appointing a successor Facility Agent (acting through an office in the United Kingdom). |
20.13.2 | The retiring Facility Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. |
20.13.3 | The replacement of the Facility Agent and the appointment of the successor Facility Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Facility Agent. As from this date, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 20.13 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date). |
20.13.4 | Any successor Facility Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
20.14 | Confidentiality |
20.14.1 | In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments. |
20.14.2 | If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or department and the Facility Agent shall not be deemed to have notice of it. |
20.15 | Relationship with the Lenders |
20.15.1 | The Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office: |
(a) | entitled to or liable for any payment due under any Finance Document on that day; and |
(b) | entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, |
20.15.2 | Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 34.4 (Electronic communication)) |
20.16 | Credit appraisal by the Lenders |
20.16.1 | the financial condition, status and nature of each member of the Group; |
20.16.2 | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; |
20.16.3 | whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and |
20.16.4 | the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document. |
20.17 | Facility Agent's management time |
20.18 | Deduction from amounts payable by the Facility Agent |
21. | CONDUCT OF BUSINESS BY THE FINANCE PARTIES |
21.1.1 | interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; |
21.1.2 | oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or |
21.1.3 | oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
22. | EVIDENCE AND CALCULATIONS |
22.1 | Accounts |
22.2 | Certificates and determinations |
22.3 | Calculations |
23. | FEES |
23.1 | Agency fee |
23.2 | Upfront fees |
23.3 | Commitment fee |
23.3.1 | The Borrower must pay a commitment fee computed at the rate of 35 per cent. of the applicable Margin on the undrawn, uncancelled amount of each Lender's Commitment for the Availability Period calculated from the date of this Agreement. |
23.3.2 | The commitment fee is payable quarterly in arrear during the Availability Period and on the last day of the Availability Period. Accrued commitment fee is also payable to the Facility Agent for a Lender on the date its Commitment is cancelled in full. |
23.3.3 | No commitment fee is payable to the Facility Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender. |
24. | OTHER INDEMNITIES |
24.1 | Currency indemnity |
24.1.1 | The Borrower must, as an independent obligation, indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of: |
(a) | that Finance Party receiving an amount in respect of the Borrower's liability under the Finance Documents; or |
(b) | that liability being converted into a claim, proof, judgment or order, |
24.1.2 | Unless otherwise required by law, the Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable. |
24.2 | Other indemnities |
24.2.1 | the occurrence of any Event of Default; |
24.2.2 | (other than by reason of negligence or default by a Finance Party) a Loan not being made after a Request has been delivered for that Loan; or |
24.2.3 | the receipt or recovery by any party (or the Facility Agent on its behalf) of all or any part of a Loan or overdue sum due from the Borrower otherwise than on the Final Maturity Date or, in the case of an overdue sum, the last day of an interest period relating to that overdue sum, as the case may be or a Loan or any part thereof not being prepaid in accordance with a notice of prepayment. |
24.3 | Indemnity to the Facility Agent |
24.3.1 | investigating any event which it reasonably believes is a Default; |
24.3.2 | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or |
24.3.3 | instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement. |
25. | EXPENSES |
25.1 | Initial costs |
25.2 | Subsequent costs |
25.2.1 | the negotiation, preparation, printing and execution of any Finance Document (other than a Transfer Certificate or Assignment Agreement) executed after the date of this Agreement; and |
25.2.2 | any amendment, waiver or consent requested by or on behalf of the Borrower or specifically allowed by this Agreement. |
25.3 | Enforcement costs |
26. | AMENDMENTS AND WAIVERS |
26.1 | Procedure |
26.1.1 | Except as provided in this Clause 26, any term of the Finance Documents may be amended or waived with the agreement of the Borrower and the Majority Lenders. The Facility Agent may effect, on behalf of any Finance Party, an amendment or waiver allowed under this Clause. |
26.1.2 | The Facility Agent must promptly notify the other Parties of any amendment or waiver effected by it under sub-clause 26.1.1 above. Any such amendment or waiver is binding on all the Parties. |
26.1.3 | Sub-clause 27.9.3 (Pro rata interest settlement) shall apply to this Clause 26. |
26.2 | Exceptions |
26.2.1 | An amendment or waiver that has the effect of changing or which relates to: |
(a) | the definition of Majority Lenders in Clause 1.1 (Definitions); |
(b) | an extension of the date of payment of any amount to a Lender under the Finance Documents; |
(c) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fee or other amount payable to a Lender under the Finance Documents; |
(d) | an increase in a Commitment or the Total Commitments, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility; |
(e) | a term of a Finance Document which expressly requires the consent of each Lender; |
(f) | the right of a Lender to assign or transfer its rights or obligations under the Finance Documents; |
(g) | Clause 7.1 (Mandatory prepayment – illegality), Clause 7.2 (Mandatory prepayment – change of control), sub-clause 7.3.3 of Clause 7.3 (Voluntary prepayment) or Clause 31 (Pro rata sharing); |
(h) | Clause 15.20 (Sanctions) or 18.18 (Sanctions); or |
(i) | this Clause 26 (Amendments and Waivers), Clause 36 (Governing law) or Clause 37 (Enforcement), |
26.3 | Other exceptions |
26.4 | Disenfranchisement of Defaulting Lenders |
26.4.1 | For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender's Commitments will be reduced by the amount of its Available Commitment. |
26.4.2 | For the purposes of this Clause 26.3, the Facility Agent may assume that the following Lenders are Defaulting Lenders: |
(a) | any Lender which has notified the Facility Agent that it has become a Defaulting Lender; |
(b) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of "Defaulting Lender" has occurred where, in the case of the events or circumstances referred to in paragraph (a), none of the exceptions to that paragraph apply, |
26.5 | Replacement of a Defaulting Lender |
26.5.1 | The Borrower may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days' prior written notice to the Facility Agent and such Lender, replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 27 (Changes to the Parties) all (and not part only) of its rights and obligations under this Agreement to an Eligible Institution (a "Replacement Lender") which is acceptable to the Facility Agent (acting reasonably) (unless the Facility Agent is an Impaired Agent), which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lender's participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender's participation in the outstanding Loans and all accrued interest (to the extent that the Facility Agent has not given a notification under Clause 27.9 (Pro rata interest settlement)), Break Costs and other amounts payable in relation thereto under the Finance Documents. |
26.5.2 | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions: |
(a) | the Borrower shall have no right to replace the Facility Agent; |
(b) | neither the Facility Agent nor the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender; |
(c) | the transfer must take place no later than 14 days after the notice referred to in sub-clause 26.5.1 above; and |
(d) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents. |
26.6 | Change of currency |
26.7 | Waivers and remedies cumulative |
27. | CHANGES TO THE PARTIES |
27.1 | Assignments and transfers by the Borrower |
27.2 | Assignments and transfers by Lenders |
27.2.1 | A Lender (the "Existing Lender") may, subject to the following provisions of this Clause 27, at any time assign or transfer (including by way of novation) any of its rights and obligations under this Agreement to any bank, financial institution or trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the "New Lender"). |
27.2.2 | Unless the Borrower and the Facility Agent otherwise agree, an assignment or transfer of part of a Commitment or rights and obligations under this Agreement by the Existing Lender must be in a minimum amount of £5,000,000. |
27.2.3 | An Existing Lender must consult with the Borrower for no more than five Business Days before it may make an assignment or transfer unless: |
(a) | the New Lender is another Lender or an Affiliate of a Lender; or |
(b) | an Event of Default has occurred and is outstanding. |
27.2.4 | The Facility Agent is not obliged to execute a Transfer Certificate or Assignment Agreement until it has completed all "know your customer requirements" to its satisfaction. The Facility Agent must promptly notify the Existing Lender and the New Lender if there are any such requirements. |
27.2.5 | An assignment of rights or a transfer of rights and obligations will be effective only if either: |
(a) | the obligations are novated in accordance with the following provisions of this Clause 27; or |
(b) | the New Lender confirms to the Facility Agent and the Borrower in form and substance satisfactory to the Facility Agent that it is bound by the terms of this Agreement as a Lender. On the assignment or transfer becoming effective in this manner the Existing Lender will be released from its rights and obligations under this Agreement to the extent that they are transferred to, or assigned to and assumed by, the New Lender. |
27.2.6 | Unless the Facility Agent otherwise agrees, the New Lender must pay to the Facility Agent for its own account, on or before the date any assignment or transfer occurs, a fee of £1,750. |
27.2.7 | Any reference in this Agreement to a Lender includes a New Lender but excludes a Lender if no amount is or may be owed to or by it under this Agreement. |
27.3 | Procedure for transfer by way of novations |
27.3.1 | A novation is effected if: |
(a) | the Existing Lender and the New Lender deliver to the Facility Agent a duly completed Transfer Certificate; and |
(b) | the Facility Agent executes it. |
27.3.2 | Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to execute any duly completed Transfer Certificate on its behalf. |
27.3.3 | Subject to Clause 27.9 (Pro rata interest settlement), on the Transfer Date: |
(a) | the New Lender will assume the rights and obligations of the Existing Lender expressed to be the subject of the novation in the Transfer Certificate in substitution for the Existing Lender; and |
(b) | the Existing Lender will be released from those obligations and cease to have those rights. |
27.4 | Procedure for assignment |
27.4.1 | Subject to the conditions set out in Clause 27.2 (Assignment and transfers by Lenders), an assignment may be effected in accordance with sub-clause 27.4.2 below when the Facility Agent executes an otherwise duly completed Assignment |
27.4.2 | Subject to Clause 27.9 (Pro rata interest settlement), on the Transfer Date: |
(a) | the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement; |
(b) | the Existing Lender will be released by the Borrower and the other Finance Parties from the obligations owed by it (the "Relevant Obligations") and expressed to be the subject of the release in the Assignment Agreement; and |
(c) | the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations. |
27.4.3 | Lenders may utilise procedures other than those set out in this Clause 27.4 to assign their rights under the Finance Documents (but not, without the consent of the Borrower or unless in accordance with Clause 27.4 (Procedure for transfer by way of novation), to obtain a release by the Borrower from the obligations owed to the Borrower by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 27.2 (Assignments and transfers by Lenders). |
27.5 | Limitation of responsibility of Existing Lender |
27.5.1 | Unless expressly agreed to the contrary, an Existing Lender is not responsible to a New Lender for the legality, validity, adequacy, accuracy, completeness or performance of: |
(a) | any Finance Document or any other document; or |
(b) | any statement or information (whether written or oral) made in or supplied in connection with any Finance Document, |
27.5.2 | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(a) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Borrower and its related entities and the nature and extent of any recourse against any Party or its assets) in connection with its participation in this Agreement; and |
(b) | has not relied exclusively on any information supplied to it by the Existing Lender in connection with any Finance Document. |
27.5.3 | Nothing in any Finance Document requires an Existing Lender to: |
(a) | accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause; or |
(b) | support any losses incurred by the New Lender by reason of the non-performance by the Borrower of its obligations under any Finance Document or otherwise. |
27.6 | Costs resulting from change of Lender or Facility Office |
27.6.1 | If: |
(a) | a Lender assigns or transfers any of its rights and obligations under the Finance Documents or changes its Facility Office; and |
(b) | as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrower would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 11 (Tax gross-up and indemnities) or Clause 12 (Increased costs), |
27.6.2 | This Clause 27.6 shall not apply in relation to Clause 11.2 (Tax gross-up), to a Treaty Lender that has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with sub-clause 11.6.1 of Clause 11.6 (HMRC DT Treaty Passport scheme confirmation) if the Borrower making the payment has not complied with its obligations under sub-clause 11.6.2 of Clause 11.6 (HMRC DT Treaty Passport scheme confirmation). |
27.7 | Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower |
27.8 | Security over Lenders' rights |
27.8.1 | any charge, assignment or other security to secure obligations to a federal reserve, central bank, governmental authority, agency or department (including Her Majesty's Treasury); and |
27.8.2 | any charge, assignment or other security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
(a) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other security for the Lender as a party to any of the Finance Documents; or |
(b) | require any payments to be made by the Borrower or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
27.9 | Pro rata interest settlement |
27.9.1 | If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 27.3 (Procedure for transfer by way of novations) or any assignment pursuant to Clause 27.4 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of a Term): |
(a) | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Term (or, if the Term is longer than six months, on the next of the dates which falls at six monthly intervals after the first day of that Term); and |
(b) | the rights transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt: |
(i) | when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and |
(ii) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 27.9, have been payable to it on that date, but after deduction of the Accrued Amounts. |
27.9.2 | In this Clause 27.9 references to "Term" shall be construed to include a reference to any other period for accrual of fees. |
27.9.3 | An Existing Lender which retains the right to the Accrued Amounts pursuant to this Clause 27.9 but which does not have a Commitment shall be deemed not to be a Lender for the purposes of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents. |
27.10 | Disenfranchisement of Debt Purchase Transactions entered into by Relevant Persons |
27.10.1 | For so long as a Holding Company of the Borrower or any of such Holding Company's Affiliates other than a member of the Group (a "Relevant Person") (i) beneficially owns a Commitment or (ii) has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated: |
(a) | in ascertaining the Majority Lenders or whether any given percentage (including for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents such Commitment shall be deemed to be zero; and |
(b) | for the purposes of Clause 26.2 (Exceptions), such Relevant Person or the person with whom it has entered into such sub-participation, other agreement or arrangement shall be deemed not to be a Lender (unless in the case of a person not being a Relevant Person it is a Lender by a virtue otherwise than by beneficially owning the relevant Commitment). |
27.10.2 | Each Lender shall, unless such Debt Purchase Transaction is an assignment or transfer, promptly notify the Facility Agent in writing if it knowingly enters into a Debt Purchase Transaction with a Relevant Person (a "Notifiable Debt Purchase Transaction"), such notification to be substantially in the form set out in Part I of Schedule 9 (Forms of Notifiable Debt Purchase Transaction Notice). |
27.10.3 | A Lender shall promptly notify the Facility Agent if a Notifiable Debt Purchase Transaction to which it is a party: |
(a) | is terminated; or |
(b) | ceases to be with a Relevant Person, |
27.10.4 | Each Relevant Person that is a Lender agrees that: |
(a) | in relation to any meeting or conference call to which all the Lenders are invited to attend or participate, it shall not attend or participate in the same if so requested by the Facility Agent or, unless the Facility Agent otherwise agrees, be entitled to receive the agenda or any minutes of the same; and |
(b) | in its capacity as Lender, unless the Facility Agent otherwise agrees, it shall not be entitled to receive any report or other document prepared at the request of, or on the instructions of, the Facility Agent or one or more of the Lenders. |
28. | CONFIDENTIALITY AND DISCLOSURE OF INFORMATION |
28.1 | Confidential Information |
28.2 | Disclosure of Confidential Information |
28.2.1 | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this sub-clause 28.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
28.2.2 | to any person: |
(a) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent, and in each case to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(b) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or the Borrower and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(c) | appointed by any Finance Party or by a person to whom paragraphs (a) or (b) of sub-clause 28.2.2 above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf; |
(d) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraphs (a) or (b) of sub-clause 28.2.2 above; |
(e) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
(f) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates security (or may do so) pursuant to Clause 27.8 (Security over Lenders' rights); |
(g) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(h) | who is a Party; or |
(i) | with the consent of the Borrower; |
(i) | in relation to paragraphs (a), (b) and (c) of sub-clause 28.2.2 above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; |
(ii) | in relation to paragraph (d) of sub-clause 28.2.2 above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; |
(iii) | in relation to paragraphs (e), (f) and (g) of sub-clause 28.2.2 above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; |
28.2.3 | to any person appointed by that Finance Party or by a person to whom paragraph (a) or (b) of sub-clause 28.2.2 above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance |
28.2.4 | to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Borrower if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information. |
28.3 | Disclosure to numbering service providers |
28.3.1 | Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or the Borrower the following information: |
(a) | name of the Borrower; |
(b) | country of domicile of the Borrower; |
(c) | place of incorporation of the Borrower; |
(d) | date of this Agreement; |
(e) | Clause 37 (Governing Law); |
(f) | the names of the Facility Agent and the Arranger; |
(g) | date of each amendment and restatement of this Agreement; |
(h) | amount of Total Commitments; |
(i) | currency of the Facility; |
(j) | type of the Facility; |
(k) | ranking of Facility; |
(l) | Final Maturity Date for the Facility; |
(m) | changes to any of the information previously supplied pursuant to paragraphs (a) to (1) above; and |
(n) | such other information agreed between such Finance Party and the Borrower, |
28.3.2 | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or the Borrower by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
28.3.3 | The Borrower represents that none of the information set out in paragraphs (a) to (n) of sub-clause 28.3.1 above is, nor will at any time be, unpublished price-sensitive information. |
28.3.4 | The Facility Agent shall notify the Borrower and the other Finance Parties of: |
(a) | the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or the Borrower; and |
(b) | the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or the Borrower by such numbering service provider. |
29. | CONFIDENTIALITY OF FUNDING RATES |
29.1 | Confidentiality and disclosure |
29.1.1 | The Facility Agent and the Borrower agree to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by sub-clauses 29.1.2 and 29.1.3 below. |
29.1.2 | The Facility Agent may disclose: |
(a) | any Funding Rate to the Borrower pursuant to Clause 8.4 (Notification of rates of interest); and |
(b) | any Funding Rate to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Facility Agent and the relevant Lender. |
29.1.3 | The Facility Agent and the Borrower may disclose any Funding Rate to: |
(a) | any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so |
(b) | any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the Borrower it is not practicable to do so in the circumstances; |
(c) | any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the Borrower it is not practicable to do so in the circumstances; and |
(d) | any person with the consent of the relevant Lender. |
29.2 | Related obligations |
29.2.1 | The Facility Agent and the Borrower acknowledge that each Funding Rate is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and the Borrower undertake not to use any Funding Rate for any unlawful purpose. |
29.2.2 | The Facility Agent and the Borrower agree (to the extent permitted by law and regulation) to inform the relevant Lender: |
(a) | of the circumstances of any disclosure made pursuant to paragraph (b) of sub-clause 29.1.3 except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(b) | upon becoming aware that any information has been disclosed in breach of this Clause 29. |
29.3 | No Event of Default |
30. | SET-OFF |
31. | PRO RATA SHARING |
31.1 | Payments to Finance Parties |
31.1.1 | the Recovering Finance Party must, within three Business Days, supply details of the Recovery to the Facility Agent; |
31.1.2 | the Facility Agent must calculate whether the receipt or recovery is in excess of the amount which the Recovering Finance Party would have received if the receipt or recovery had been received or made by the Facility Agent and distributed in accordance with Clause 14 (Payments), without taking account of any Tax which would have been imposed on the Facility Agent in relation to the receipt, recovery or redistribution; and |
31.1.3 | the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "Redistribution") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 14.8 (Partial payments). |
31.2 | Redistribution of payments |
31.3 | Recovering Finance Party's rights |
31.4 | Reversal of Redistribution |
31.4.1 | each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Redistribution (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Redistribution which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and |
31.4.2 | as between the Borrower and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by the Borrower. |
31.5 | Exceptions |
31.5.1 | This Clause 31 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the Borrower. |
31.5.2 | A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of legal or arbitration proceedings, where: |
(a) | the Recovering Finance Party notified the Facility Agent of those proceedings; and |
(b) | the other Finance Party had an opportunity to participate in those proceedings but did not do so or did not take separate legal or arbitration proceedings as soon as reasonably practicable after receiving notice of them. |
32. | SEVERABILITY |
32.1.1 | the legality, validity or enforceability in that jurisdiction of any other term of the Finance Documents; or |
32.1.2 | the legality, validity or enforceability in other jurisdictions of that or any other term of the Finance Documents. |
33. | COUNTERPARTS |
34. | NOTICES |
34.1 | In writing |
34.1.1 | Any communication in connection with a Finance Document must be in writing and, unless otherwise stated, may be given in person, by post or (in respect of any Party other than the Borrower) by fax. |
34.1.2 | Unless it is agreed to the contrary, any consent or agreement required under a Finance Document must be given in writing. |
34.2 | Contact details |
34.2.1 | Except as provided below, the contact details of each Party for all communications in connection with the Finance Documents are those notified by that Party for this purpose to the Facility Agent on or before the date it becomes a Party. |
34.2.2 | The contact details of the Borrower for this purpose are: |
Address: | Western Power Distribution plc Avonbank Feeder Road Bristol BS2 0TB |
Tel: | 44 117 933 2374 |
E-mail: | wpdtreasuryconfirms@westernpower.co.uk |
Attention: | Treasury Team |
Address: | Mizuho Bank, Ltd. 30 Old Bailey London EC4M 7AU |
Tel: | +44 (0) 207 012 4703 |
Fax number: | +44 (0) 203 147 4118 |
E-mail: | loanagency@mhcb.co.uk |
Attention: | Agency Department |
34.2.3 | Any Party may change its contact details by giving five Business Days' notice to the Facility Agent or (in the case of the Facility Agent) to the other Parties. |
34.2.4 | Where a Party nominates a particular department or officer to receive a communication, a communication will not be effective if it fails to specify that department or officer. |
34.3 | Effectiveness |
34.3.1 | Except as provided below, any communication in connection with a Finance Document will be deemed to be given as follows: |
(a) | if delivered in person, at the time of delivery; |
(b) | if posted, five days after being deposited in the post, postage prepaid, in a correctly addressed envelope; and |
(c) | if by fax, when received in legible form. |
34.3.2 | A communication given under sub-clause 34.3.1 above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place. |
34.3.3 | A communication to the Facility Agent will only be effective on actual receipt by it. |
34.4 | Electronic communication |
34.4.1 | Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties: |
(a) | notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and |
(b) | notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice. |
34.4.2 | Any such electronic communication as specified in sub-clause 34.4.1 above to be made between the Borrower and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication. |
34.4.3 | Any such electronic communication as specified in sub-clause 34.4.1 above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose. |
34.4.4 | Any electronic communication which becomes effective, in accordance with sub-clause 34.4.3 above, after 5:00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day. |
34.4.5 | Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 34.4. |
34.5 | The Borrower |
34.6 | Communication when Facility Agent is Impaired Agent |
35. | LANGUAGE |
35.1.1 | Any notice given in connection with a Finance Document must be in English. |
35.1.2 | Any other document provided in connection with a Finance Document must be: |
(a) | in English; or |
(b) | (unless the Facility Agent otherwise agrees) accompanied by a certified English translation. In this case, the English translation prevails unless the document is a statutory or other official document. |
36. | GOVERNING LAW |
37. | ENFORCEMENT |
37.1 | Jurisdiction |
37.1.1 | The English courts have exclusive jurisdiction to settle any dispute in connection with any Finance Document including a dispute relating to any non-contractual obligation arising out of or in connection with this Agreement. |
37.1.2 | The English courts are the most appropriate and convenient courts to settle any such dispute and the Borrower waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document. |
37.1.3 | Notwithstanding sub-clause 37.1.1 above, no Finance Party shall be prevented from taking proceedings in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. |
Name of Original Lender | Commitment (£) | Treaty Passport scheme reference number and jurisdiction of tax residence (if applicable) |
HSBC Bank plc | 65,000,000 | N/A |
Mizuho Bank, Ltd. | 65,000,000 | N/A |
Total | £130,000,000 |
1. | A certified copy of the constitutional documents of the Borrower. |
2. | A certified copy of a resolution of the board of directors or a committee of the board of directors of the Borrower approving the terms of, and the transactions contemplated by, the Finance Documents. |
3. | A specimen of the signature of each person authorised on behalf of the Borrower to execute or witness the execution of any Finance Document or to sign or send any document or notice in connection with any Finance Document. |
4. | A certificate of the Borrower (signed by a director) confirming that borrowing the Total Commitments would not cause any borrowing limit binding on the Borrower to be exceeded. |
5. | A certificate of an authorised signatory of the Borrower certifying that each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement. |
6. | A legal opinion of Clifford Chance LLP, legal advisers to the Arranger and the Facility Agent addressed to the Finance Parties. |
7. | Duly signed copies of each Finance Document. |
8. | Evidence that all fees and expenses then due and payable from the Borrower under this Agreement have been or will be paid no later than the first Drawdown Date. |
9. | The Original Financial Statements. |
1. | We refer to the Agreement. This is a Request. Terms defined in the Agreement have the same meaning in this Request unless given a different meaning in this Request. |
2. | We wish to borrow a Loan on the following terms: |
(a) | Drawdown Date: [•] |
(b) | Amount: [•] |
(c) | Term: [•] |
3. | Our payment instructions are: [•] |
4. | We confirm that each condition precedent under the Agreement which must be satisfied on the date of this Request is so satisfied. |
5. | The proceeds of this Loan should be credited to [account]. |
6. | We confirm that as at [relevant testing date] Consolidated EBITDA for the Measurement Period ending on such date was [•] and Interest Payable was [•]; therefore, the ratio of Consolidated EBITDA to Interest Payable for the Measurement Period ending on such date was [•] to 1. |
7. | We confirm that as at [relevant testing date] Regulatory Asset Value was [•] and Total Net Debt was [•]; therefore, Total Net Debt does not exceed an amount equal to 87.5% of the Regulatory Asset Value. |
8. | This Request is irrevocable. |
1. | We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice. |
2. | We refer to the following Loan(s) with a Term ending on [•].* |
3. | [We request that the above Loan[s] be divided into [•] Loans with the following Terms:]** |
4. | This Selection Notice is irrevocable. |
From: | [THE EXISTING LENDER] (the "Existing Lender") and [THE NEW LENDER] (the "New Lender") |
1. | The Existing Lender transfers by novation to the New Lender all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment and participations in Loans under the Agreement referred to in the Schedule below in accordance with the terms of the Agreement. |
2. | The proposed Transfer Date is [•]. |
3. | The administrative details of the New Lender for the purposes of the Agreement are set out in the Schedule. |
4. | The New Lender confirms, for the benefit of the Facility Agent and without liability to the Borrower, that it is: |
(a) | [a Qualifying Lender (other than a Treaty Lender);] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender].* |
5. | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; or |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA 2009) of that company.]** |
6. | [The New Lender confirms (for the benefit of the Facility Agent and without liability to the Borrower) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [•]), and is tax resident in [•]*** so that interest payable to it by the Borrower is generally subject to full exemption from UK withholding tax and notifies the Borrower that the Borrower must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
7. | This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law. |
* | Delete as applicable - each New Lender is required to confirm which of these three categories it falls within. |
** | Include if New Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 11.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
[EXISTING LENDER] | [NEW LENDER] |
By: | By: |
From: | [THE EXISTING LENDER] (the "Existing Lender") and [THE NEW LENDER] (the "New Lender") |
1. | We refer to the Agreement. This is an Assignment Agreement. Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement. |
2. | We refer to Clause 27.4 (Procedure for assignment) of the Agreement: |
(a) | The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment and participations in Loans under the Agreement as specified in the Schedule. |
(b) | The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitment and participations in Loans under the Agreement specified in the Schedule. |
(c) | The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above. |
3. | The proposed Transfer Date is [ ]. |
4. | On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender. |
5. | The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 34.2 (Contact Details) of the Agreement are set out in the Schedule. |
6. | The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 27,5 (Limitation of Existing Lender) of the Agreement. |
7. | The New Lender confirms, for the benefit of the Facility Agent and without liability to the Borrower, that it is: |
(a) | [a Qualifying Lender (other than a Treaty Lender);] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender].* |
8. | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]** |
9. | [The New Lender confirms (for the benefit of the Facility Agent and without liability to the Borrower) that it holds a passport under the HMRC DT Treaty passport scheme (reference number [•]) and is tax resident in [•]***, so that interest payable to it by the Borrower is generally subject to full exemption from UK withholding tax and notifies the Borrower that the Borrower must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
10. | This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 27.7 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower) of the Agreement, to the Borrower of the assignment referred to in this Assignment Agreement. |
11. | This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement. |
12. | This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. |
13. | This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement. |
* | Delete as applicable - each New Lender is required to confirm which of these three categories it falls within. |
** | Include if New Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 11.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
[Existing Lender] | [New Lender] |
By: | By: |
1. | We refer to the Agreement. This is a Compliance Certificate. |
2. | We confirm that as at [relevant testing date], Consolidated EBITDA for the Measurement Period ending on such date was [•] and Interest Payable was [•], therefore the ratio of Consolidated EBITDA to Interest Payable for the Measurement Period ending on such date was [•] to 1. |
3. | We confirm that as at [relevant testing date], Regulatory Asset Value was [•] and Total Net Debt was [•]; therefore Total Net Debt does not exceed 87.5% of the Regulatory Asset Value. |
4. | We set out below calculations establishing the figures in paragraphs 2 and 3 above: |
5. | [We confirm that no Default is outstanding as at [relevant testing date].] 1. |
To: | Mizuho Bank, Ltd. as Facility Agent, and Western Power Distribution plc as Borrower |
1. | We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation. |
2. | We refer to Clause 2.2 (Increase) of the Agreement. |
3. | In accordance with the terms of the Agreement, the Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the "Relevant Commitment") as if it had been an Original Lender under the Agreement in respect of the Relevant Commitments. |
4. | The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the "Increase Date") is [•]. |
5. | On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender. |
6. | The Facility Office and address, fax number and attention details for notices to the Increase Lender for the purposes of Clause 34 (Notices) of the Agreement are set out in the Schedule. |
7. | The Increase Lender expressly acknowledges the limitations on the Lenders' obligations referred to in Clause 2.2 (Increase) of the Agreement. |
8. | The Increase Lender confirms, for the benefit of the Facility Agent and without liability to the Borrower, that it is: |
(a) | [a Qualifying Lender (other than a Treaty Lender);] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender].* |
9. | [The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; or |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA 2009; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA 2009) of that company.]** |
10. | [The Increase Lender confirms (for the benefit of the Facility Agent and without liability to the Borrower) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [•]), and is tax resident in [•] *** so that interest payable to it by the Borrower is generally subject to full exemption from UK withholding tax and notifies the Borrower that the Borrower must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
11. | This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation. |
12. | This Increase Confirmation and any non-contractual obligations arising out of or in connection with it are governed by English law. |
13. | This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation. |
* | Delete as applicable - each Increase Lender is required to confirm which of these three categories it falls within. |
** | Include if Increase Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 11.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the Increase Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
Delivery of a duly completed Request in accordance with Clause 5.1 (Giving of Requests) or a Selection Notice (Clause 10.1 (Selection)) | Initial Request D 8:30am Further Requests D -1 10:00am |
Facility Agent notifies the Lenders of the Loan in accordance with Clause 5.4 (Advance of Loan) | Initial Request D 8:30am Further Requests D -1 4:00pm |
LIBOR is fixed | Rate Fixing Day as of 11:00am |
1. | We refer to sub-clause 27.10.2 of Clause 27.10 (Disenfranchisement of Debt Purchase Transactions entered into by Relevant Persons) of the Agreement. Terms defined in the Agreement have the same meaning in this notice unless given a different meaning in this notice. |
2. | We have entered into a Notifiable Debt Purchase Transaction. |
3. | The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to [insert amount (of that Commitment) to which the relevant Debt Purchase Transaction applies] |
1. | We refer to sub-clause 27.10.3 of Clause 27.10 (Disenfranchisement of Debt Purchase Transactions entered into by Relevant Persons) of the Agreement. Terms defined in the Agreement have the same meaning in this notice unless given a different meaning in this notice. |
2. | A Notifiable Debt Purchase Transaction which we entered into and which we notified you of in a notice dated [ • ] has [terminated]/[ceased to be with a Relevant Person]. |
3. | The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to [insert amount (of that Commitment) to which the relevant Debt Purchase Transaction applies] |
(1) | WESTERN POWER DISTRIBUTION PLC (registered number 09223384) (the Company); |
(3) | MIZUHO BANK, LTD., as Facility Agent acting on behalf of the Lenders (each as defined below) (the Facility Agent). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | the repayment or prepayment of any principal amount (or capitalised interest) outstanding under the Subordinated Finance Document; |
(b) | the payment of any interest, fee or charge accrued or due under or any other amount payable in connection with the Subordinated Finance Document; or |
(c) | the purchase, redemption, defeasance or discharge of any amount outstanding under the Subordinated Finance Document, |
1.2 | Construction |
(a) | Capitalised terms defined in the Agreement have the same meaning in this Deed, unless given a different meaning in this Deed. |
(b) | The principles of construction set out in the Agreement will have effect as if set out in this Deed. |
(c) | Any undertaking by the Subordinated Creditor in this Deed remains in force from the date of this Deed to the Senior Debt Discharge Date. |
1.3 | Third Party rights |
2. | SUBORDINATION |
2.1 | Ranking |
2.2 | Undertakings of the Company |
(a) | make any payment whatsoever in respect of the Subordinated Debt other than a Permitted Subordinated Debt Payment; or |
(b) | secure, in any manner, all or any part of the Subordinated Debt; or |
(c) | defease, in any manner, all or any part of the Subordinated Debt; or |
(d) | give any financial support (including the taking of any participation, the giving of any guarantee or other assurance or the making of any deposit) to any person in connection with all or any part of the Subordinated Debt; or |
(e) | procure any other person to do any of the acts or take any of the actions referred to paragraphs (a) to (d) above. |
2.3 | Undertakings of the Subordinated Creditor |
(a) | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(i) | allow to exist or receive the benefit of any Security Interest, guarantee, indemnity or other assurance against loss in respect of all or any of the Subordinated Debt or all or any rights which it may have against the Company in respect of all or any part of the Subordinated Debt; or |
(ii) | take or omit to take any action or step whereby the subordination of all or any of the Subordinated Debt might be terminated, impaired or adversely affected. |
(b) | The Subordinated Creditor will not without the prior written consent of the Lenders receive any payment save where such payment is a Permitted Subordinated Debt Payment. |
(c) | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(i) | demand payment, declare prematurely due and payable or otherwise seek to accelerate payment of or place on demand all or any part of the Subordinated Debt or enforce the Subordinated Debt by execution or otherwise; |
(ii) | initiate or support or take any steps with a view to, or which may lead to: |
(A) | any insolvency, liquidation, reorganisation, administration or dissolution proceedings; |
(B) | any voluntary arrangement or assignment for the benefit of creditors; or |
(C) | any similar proceedings, |
(iii) | bring or support any legal proceedings against the Company or any of its Subsidiaries; or |
(iv) | otherwise exercise any remedy for the recovery of all or any part of the Subordinated Debt (including, without limitation, the exercise of any right of set-off, counterclaim or lien). |
(d) | If the Subordinated Creditor receives any payment which is in breach of any Finance Document, it shall hold such sums on trust for the Facility Agent (acting on behalf of the Lenders) and pay them immediately to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt. |
(e) | The Subordinated Creditor and the Company hereby agree for the benefit of the Facility Agent and the Lenders that, notwithstanding the terms of the Subordinated Finance Document and any agreement relating to the Subordinated Debt, the Subordinated Debt is made available on terms such that it is not, save for a Permitted Subordinated Debt Payment or otherwise with the consent of the Lenders, repayable unless and until the Senior Debt Discharge Date shall have occurred. |
2.4 | Subordination on insolvency |
(a) | the Subordinated Debt shall continue to be subordinated to the Senior Debt; |
(b) | any payment or distribution of any kind or character and all and any rights in respect thereof, whether in cash, securities or other property which is payable or deliverable upon or with respect to the Subordinated Debt or any part thereof by a liquidator, administrator or receiver (or the equivalent thereof) of the Company or its estate (the "rights") made to or paid to, or received by the Subordinated Creditor or to which the Subordinated Creditor is entitled shall be held on trust by the Subordinated Creditor for the Lenders and shall forthwith be paid or, as the case may be, transferred or assigned to the Lenders to be applied against the Senior Debt; |
(c) | if the trust referred to in paragraph (b) above or paragraph (d) of Clause 2.3 above fails or cannot be given effect to or if the Subordinated Creditor receives and retains the relevant payment or distribution, the Subordinated Creditor will pay over such rights in the form received to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt; |
(d) | the Subordinated Creditor acknowledges the rights of the Facility Agent (acting on behalf of the Lenders) to demand, sue and prove for, collect and receive every payment or distribution referred to in paragraph (b) above and give acquittance therefore and to file claims and take such other proceedings, in the Facility Agent's own name or otherwise, as the Facility Agent may deem necessary or advisable for the enforcement of this Deed; and |
(e) | the Subordinated Creditor by way of security for its obligations under this Deed irrevocably appoints the Facility Agent to be its attorney in order to enable the Facility Agent to enforce any and all claims upon or with respect to the Subordinated Debt or any part thereof, and to collect and receive any and all payments or distributions referred to in paragraph (b) above or to do anything |
3. | SET-OFF |
(a) | The Subordinated Creditor shall not set off against the Subordinated Debt any amount payable by the Subordinated Creditor to the Company. |
(b) | If any part of the Subordinated Debt is discharged in whole or in part by way of set-off, the Subordinated Creditor will promptly pay to the Facility Agent for application in accordance with the terms of paragraph (b) of Clause 2.4 (Subordination on insolvency) an amount equal to the amount of the Subordinated Debt discharged by such set-off. |
4. | NEW MONEY |
5. | PROTECTION OF SUBORDINATION |
(a) | The subordination in this Deed is a continuing subordination and benefits the ultimate balance of the Senior Debt. |
(b) | Except as provided in this Deed, the subordination is, and the Subordinated Creditor's obligations under this Deed will, not be affected by any act, omission or thing which, but for this provision, would reduce, release or prejudice the subordination or any of the Subordinated Creditor's obligations under this Deed. |
6. | MISCELLANEOUS |
(a) | This Deed overrides anything in any Subordinated Finance Document to the contrary. |
(b) | Any communication in respect of this Deed must be in writing. Contact details for each Party are set out opposite their name, below. |
(c) | This Deed is a Finance Document. |
7. | ASSIGNMENT |
(a) | The Facility Agent (acting on behalf of the Lenders) shall have the full and unfettered right to assign or otherwise transfer the whole or any part of the benefit of this Deed to any person to whom all or a corresponding part of its rights, benefits and obligations under any of the Finance Documents are assigned or transferred in accordance with their provisions. |
(b) | The Subordinated Creditor shall not assign or transfer all or any of its rights, title, benefit and interest in or to all or any part of the Subordinated Debt unless in full and on or prior to such assignment or transfer the assignee or transferee accedes to this Deed as Subordinated Creditor pursuant to the Subordinated Creditor Accession Deed. |
8. | TRUSTS |
9. | TERMINATION |
10. | GOVERNING LAW |
11. | JURISDICTION |
To: | MIZUHO BANK, LTD., as Facility Agent acting on behalf of the Lenders. |
From: | [Acceding Subordinated Creditor] |
EXECUTED as a DEED | ) | |
by WESTERN POWER DISTRIBUTION PLC | ) | |
acting by | ) | |
Director |
Witness's Signature | |
Name: | |
Address: |
Address: | [●] |
Fax number: | [●] |
Phone number: | [●] |
E-mail: | [●] |
Attention: | [●] |
EXECUTED as a DEED | ) | |
by [ACCEDING SUBORDINATED CREDITOR] | ) | |
acting by | ) | |
Director |
Witness's Signature | |
Name: | |
Address: |
Address: | [●] |
Fax number: | [●] |
Phone number: | [●] |
E-mail: | [●] |
Attention: | [●] |
Facility Agent | ||
EXECUTED as a DEED | ) | |
by MIZUHO BANK, LTD. | ) | |
acting by | ) | |
Director |
Witness's Signature | |
Name: | |
Address: |
Address: | 30 Old Bailey |
London | |
EC4M 7AU | |
Fax number: | 44 0 203 147 4118 |
Phone number: | 44 207 012 4703 |
E-mail: | loanagency@mhcb.co.uk |
Attention: | Agency Department |
1. | We refer to the Agreement and the Deed. Capitalised terms defined in the Deed have the same meaning in this Certificate, unless given a different meaning in this Certificate. |
2. | We confirm that the Company will make [insert type of payment] of [insert amount and currency] under [insert description of relevant Subordinated Finance Document] on [insert date of payment]. |
3. | We confirm that, taking into account such payment, the Company will be in compliance with its obligations under Clause 17 (Financial Covenants) of the Agreement on each of the next two Measurement Dates (as such term is defined in the Agreement). |
EXECUTED as a DEED | ) | |
by WESTERN POWER DISTRIBUTION PLC | ) | |
acting by | ) | |
Director |
Witness's Signature | |
Name: | |
Address: |
Address: | [●] |
Phone number: | [●] |
E-mail: | [●] |
Attention: | [●] |
EXECUTED as a DEED | ) | |
by [SUBORDINATED CREDITOR] | ) | |
acting by | ) | |
Director |
Witness's Signature | |
Name: | |
Address: |
Address: | [●] |
Fax number: | [●] |
Phone number: | [●] |
E-mail: | [●] |
Attention: | [●] |
EXECUTED as a DEED | ) | |
by MIZUHO BANK, LTD. | ) | |
acting by | ) | |
Director |
Witness's Signature | |
Name: | |
Address: |
Address: | 30 Old Bailey |
London | |
EC4M 7AU | |
Fax number: | 44 0 203 147 4118 |
Phone number: | 44 207 012 4703 |
E-mail: | loanagency@mhcb.co.uk |
Attention: | Agency Department |
1. | We refer to the Agreement. Capitalised terms defined in the Agreement have the same meaning in this Distribution Certificate, unless given a different meaning in this Distribution Certificate. |
2. | We confirm that the Company will make [insert type of payment] of [insert amount and currency] on [insert date of payment]. |
3. | We confirm that, taking into account such payment, the Borrower will be in compliance with its obligations under Clause 17 (Financial Covenants) of the Agreement on each of the next two Measurement Dates. |
Signed by | ) | IAN WILLIAMS |
for and on behalf of | ) | RESOURCES AND EXTERNAL AFFAIRS |
) | DIRECTOR | |
WESTERN POWER DISTRIBUTION PLC | ) | |
Address: | Western Power Distribution plc |
Avonbank | |
Feeder Road | |
Bristol BS2 0TB | |
Tel: | 44 117 933 2374 |
E-mail: | wpdtreasuryconfirms@westernpower.co.uk |
Attention: | Treasury Team |
Signed by | ) | NICK BAKER |
for and on behalf of | ) | ASSOCIATE DIRECTOR |
) | ||
HSBC BANK PLC | ) | |
Address: | 3 Rivergate |
Temple Quay | |
Bristol BS1 3ER | |
United Kingdom | |
Tel: | 44 345 583 9817 |
E-mail: | sharondaw@hsbc.com |
Signed by | ) | ROBERT PETTITT |
for and on behalf of | ) | MANAGING DIRECTOR |
) | ||
MIZUHO BANK, LTD. | ) | |
Address: | 30 Old Bailey |
London | |
EC4M 7AU | |
E-mail: | csg@mhcb.co.uk |
Signed by | ) | NICK BAKER |
for and on behalf of | ) | ASSOCIATE DIRECTOR |
) | ||
HSBC BANK PLC | ) | |
Address: | 3 Rivergate |
Temple Quay | |
Bristol BS1 3ER | |
United Kingdom | |
Tel: | +44 345 583 9817 |
E-mail: | sharondaw@hsbc.com |
Signed by | ) | ROBERT PETTITT |
for and on behalf of | ) | MANAGING DIRECTOR |
) | ||
MIZUHO BANK, LTD. | ) | |
Address: | 30 Old Bailey |
London | |
EC4M 7AU | |
E-mail: | csg@mhcb.co.uk |
Signed by | ) | ROBERT PETTITT |
for and on behalf of | ) | MANAGING DIRECTOR |
) | ||
MIZUHO BANK, LTD. | ) | |
Address: | 30 Old Bailey |
London | |
EC4M 7AU | |
Tel: | +44 (0) 207 012 4703 |
Fax: | +44 0 207 147 4118 |
E-mail: | loanagency@mhcb.co.uk |
Conformed Copy | |||
DATED 12 JANUARY 2012 (AS AMENDED AND RESTATED ON 29 JULY 2014 AND AS AMENDED ON 21 MARCH 2018) | |||
WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC AS THE COMPANY HSBC BANK PLC AND MIZUHO BANK, LTD. AS JOINT COORDINATORS ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) BARCLAYS BANK PLC HSBC BANK PLC LLOYDS BANK PLC MIZUHO BANK, LTD. ROYAL BANK OF CANADA THE ROYAL BANK OF SCOTLAND PLC THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. AS BOOKRUNNERS AND MANDATED LEAD ARRANGERS AND MIZUHO BANK, LTD. AS FACILITY AGENT | |||
£245,000,000 MULTICURRENCY REVOLVING FACILITY AGREEMENT |
CONTENTS | |
Clause | Page |
1 | Interpretation | 9 |
2 | The Facility | 33 |
3 | Purpose | 35 |
4 | Conditions Precedent | 35 |
5 | Utilisation | 36 |
6 | Extension option | 38 |
7 | Optional Currencies | 39 |
8 | Ancillary Facilities | 40 |
9 | Repayment | 44 |
10 | Prepayment and Cancellation | 45 |
11 | Interest | 48 |
12 | Terms | 49 |
13 | Market Disruption | 50 |
14 | Tax gross-up and indemnities | 51 |
15 | Increased Costs | 59 |
16 | Mitigation | 60 |
17 | Payments | 62 |
18 | Representations | 65 |
19 | Information Covenants | 69 |
20 | Financial Covenants | 73 |
21 | General Covenants | 76 |
22 | Default | 83 |
23 | The Administrative Parties | 87 |
24 | Evidence and Calculations | 93 |
25 | Fees | 94 |
26 | Indemnities and Break Costs | 95 |
27 | Expenses | 96 |
28 | Amendments and Waivers | 97 |
29 | Changes to the Parties | 100 |
30 | Confidentiality and Disclosure of Information | 104 |
31 | Confidentiality of Funding Rates and Reference Bank Quotations | 107 |
32 | Set-off | 109 |
33 | Pro rata sharing | 109 |
34 | Severability | 111 |
35 | Counterparts | 111 |
36 | Notices | 111 |
37 | Language | 113 |
38 | Governing law | 113 |
39 | Enforcement | 113 |
Schedule 1 Original Parties | 115 | |
Schedule 2 Conditions Precedent Documents | 116 | |
Schedule 3 Requests | 117 |
Schedule 4 Form of Transfer Certificate | 118 | |
Schedule 5 Form of Compliance Certificate | 121 | |
Schedule 6 Form of Increase Confirmation | 122 | |
Schedule 7 Timetables | 126 | |
Schedule 8 Form of Subordination Deed | 127 |
(1) | WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC (registered number 02366894) (the "Company"); |
(2) | HSBC BANK PLC and MIZUHO BANK, LTD. as joint coordinators (the "Joint Coordinators"); |
(3) | ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS), BARCLAYS BANK PLC, HSBC BANK PLC, LLOYDS BANK PLC, MIZUHO BANK, LTD., ROYAL BANK OF CANADA, THE ROYAL BANK OF SCOTLAND PLC and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. as bookrunners and mandated lead arrangers (the "Arrangers"); |
(4) | THE FINANCIAL INSTITUTIONS listed in Schedule 1 (Original Parties) as original lenders (the "Original Lenders"); and |
(5) | MIZUHO BANK, LTD. as facility agent (the "Facility Agent"). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | an Effective Date Lender (as defined in the Amendment Agreement); |
(b) | a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor’s Rating Services or A- or higher by Fitch Ratings Ltd or A3 or higher by Moody’s Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or |
(c) | any other bank or financial institution approved by the Facility Agent (acting reasonably). |
(a) | the United States of America; |
(b) | the United Kingdom; or |
(c) | any other member state of the European Union or any Participating Member State where such country has long term sovereign credit rating of A- or higher by Standard & Poor's Rating Services or A3 or higher from Moody's Investor Services Limited or A- or higher from Fitch Ratings Ltd. |
(a) | the principal amount under each overdraft facility and on-demand short term loan facility (net of any Available Credit Balance); |
(b) | the face amount of each guarantee, bond and letter of credit under that Ancillary Facility; and |
(c) | the amount fairly representing the aggregate exposure (excluding interest and similar charges) of that Ancillary Lender under each other type of accommodation provided under that Ancillary Facility, |
(a) | the Base Currency Amount of its participation in any outstanding Loans and the Base Currency Amount of the aggregate of its (and its Affiliate's) Ancillary Commitments; and |
(b) | in relation to any proposed Loans, the Base Currency Amount of its participation in any Loans that are due to be made on or before the proposed Drawdown Date and the Base Currency Amount of its (and its Affiliate's) Ancillary Commitment in relation to any new Ancillary Facility that is due to be made available on or before the proposed Drawdown Date, |
(a) | in relation to a Loan, the amount specified in the Request delivered by the Company for that Loan (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before the Drawdown Date or, if later, on the date the Facility Agent receives the Request adjusted to reflect any repayment, prepayment, consolidation or division of the Loan, or as the case may be, cancellation or reduction of an Ancillary Facility; and |
(b) | in relation to an Ancillary Commitment, the amount specified as such in the notice delivered to the Facility Agent by the Company pursuant to Clause 8.2 (Availability) (or, if the amount specified is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before the Ancillary Commencement Date for that Ancillary Facility or, if later, the date the Facility Agent receives the notice of the Ancillary Commitment in accordance with the terms of this Agreement). |
(a) | the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; |
(b) | the rules for global systematically important banks contained in "Global systematically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on |
(c) | any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III". |
(a) | if on that day a payment in or a purchase of a currency (other than euro) is to be made, the principal financial centre of the country of that currency; or |
(b) | if on that day a payment in or purchase of euro is to be made, which is also a TARGET Day. |
(a) | in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading "Commitment" in Schedule 1 (Original Parties) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and |
(b) | in relation to any other Lender, the amount in the Base Currency of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase), |
(a) | any member of the Group or any of its advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers, |
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 30 (Confidentiality and disclosure of information); or |
(ii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
(iii) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality. |
(a) | Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and |
(b) | Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC. |
(a) | purchases by way of assignment or transfer; |
(b) | enters into any sub-participation in respect of; or |
(c) | enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of, |
(a) | an Event of Default; or |
(b) | an event which would be (with the lapse of time, the expiry of a grace period, the giving of notice or the making of any determination under the Finance Documents or any combination of them) an Event of Default. |
(a) | which has failed to make its participation in a Loan available or has notified the Facility Agent that it will not make its participation in a Loan available by the Drawdown Date of that Loan in accordance with Clause 5.4 (Advance of Loan); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Finance Documents (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(a) | air (including, without limitation, air within natural or man-made structures, whether above or below ground); |
(b) | water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and |
(c) | land (including, without limitation, land under water). |
(a) | the pollution or protection of the Environment; |
(b) | the conditions of the workplace; or |
(c) | the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste. |
(a) | the applicable Screen Rate; |
(b) | (if no Screen Rate is available for the Term of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | if: |
(i) | no Screen Rate is available for the Term of that Loan; and |
(ii) | it is not possible to calculate an Interpolated Screen Rate for that Loan, |
(a) | on or before the date it becomes a Lender; or |
(b) | by not less than five Business Days' notice, |
(a) | sections 1471 to 1474 of the Code or any associated regulations or other official guidance; |
(b) | any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or |
(c) | any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction. |
(a) | in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; |
(b) | in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or |
(c) | in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017, |
(a) | any letter entered into by reference to the Facility between one or more Administrative Parties and the Company setting out the amount of certain fees referred to in the Agreement; and |
(b) | any agreement setting out fees payable to a Finance Party referred to in Clause 25 (Fees) of this Agreement or under any other Finance Document. |
(a) | this Agreement; |
(b) | any Ancillary Document; |
(c) | a Fee Letter; |
(d) | a Transfer Certificate; or |
(e) | any other document designated as such by the Facility Agent and the Company. |
(a) | moneys borrowed; |
(b) | any acceptance credit; |
(c) | any bond, note, debenture, loan stock or other similar instrument; |
(d) | any redeemable preference share; |
(e) | any finance or capital lease; |
(f) | receivables sold or discounted (otherwise than on a non-recourse basis); |
(g) | the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset; |
(h) | any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, except for non-payment of an amount, the then mark to market value of the derivative transaction will be used to calculate its amount); |
(i) | any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing; |
(j) | any counter-indemnity obligation in respect of any guarantee, indemnity, bond, letter of credit or any other instrument issued by a bank or financial institution; or |
(k) | any guarantee, indemnity or similar assurance against financial loss of any person in respect of any item referred to in paragraphs (a) to (j) above. |
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; |
(b) | the Facility Agent otherwise rescinds or repudiates a Finance Document; |
(c) | (if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of "Defaulting Lender"; or |
(d) | an Insolvency Event has occurred and is continuing with respect to the Facility Agent; |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event, |
(ii) | the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | an additional or increased cost; |
(b) | a reduction in the rate of return under a Finance Document or on a Finance Party's (or its Affiliate's) overall capital; or |
(c) | a reduction of an amount due and payable under any Finance Document, |
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation by it or such regulator, supervisor or similar official; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has a resolution passed for its winding up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(g) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; |
(h) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; |
(i) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or |
(j) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Term of that Loan; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Term of that Loan, |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; |
(c) | similar principles, rights and defences under the laws of any jurisdiction in which a member of the Group or a Holding Company of the Company is incorporated; and |
(d) | any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinion provided under Schedule 2 (Conditions Precedent Documents). |
(a) | an Original Lender; or |
(b) | any person which becomes a Lender after the date of this Agreement in accordance with Clause 2.2 (Increase) or Clause 29 (Changes to the Parties), |
(a) | the applicable Screen Rate; |
(b) | (if no Screen Rate is available for the Term of that Loan) the Interpolated Screen Rate for that Loan; or |
(c) | if: |
(i) | no Screen Rate is available for the currency of that Loan; or |
(ii) | no Screen Rate is available for the Term of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan, |
(a) | the electricity distribution licence made and treated as granted to the Company under Section 6(1)(c) of the Act pursuant to a licensing scheme made by the Secretary of State under Part II of Schedule 7 to the Utilities Act 2000 on 28 September, 2001; or |
(b) | any statutory amendment or replacement licence or licences granted pursuant to the Utilities Act 2000 which permit the Company to distribute electricity in the area it is certified to operate in. |
(a) | whose share in the outstanding Loans and whose undrawn Commitments then aggregate 662/3 per cent. or more of the aggregate of all the outstanding Loans and the undrawn Commitments of all the Lenders; |
(b) | if there are no Loans then outstanding, whose undrawn Commitments then aggregate 662/3 per cent. or more of the Total Commitments; or |
(c) | if there are no Loans then outstanding and the Total Commitments have been reduced to zero, whose Commitments aggregated 662/3 per cent. or more of the Total Commitments immediately before the reduction. |
(a) | at least one of Moody's Investor Services Limited ("Moody's") and Standard & Poor's Ratings Services ("Standard & Poor's") has provided a current rating in respect of the long-term, unsecured and non credit-enhanced debt obligations of the Company; and |
(b) | no Event of Default is outstanding, |
Rating (Moody's) | Rating (Standard & Poor's) | Margin (per annum) |
Less than Baa3 | Less than BBB- | 1.15% |
Baa3 | BBB- | 0.95% |
Baa2 | BBB | 0.85% |
Baa1 | BBB+ | 0.75% |
A3 or higher | A- or higher | 0.65% |
Rating (Moody's) | Rating (Standard & Poor's) | Margin (per annum) |
Less than Baa3 | Less than BBB- | 0.90% |
Baa3 | BBB- | 0.70% |
Baa2 | BBB | 0.55% |
Baa1 | BBB+ | 0.45% |
A3 or higher | A- or higher | 0.35% |
(a) | the business, assets or financial condition of the Group taken as a whole; |
(b) | the ability of the Company to perform its payment obligations under the Finance Documents or its obligations under Clauses 20.3 (Interest Cover) or 20.4 (Asset Cover) of this Agreement; or |
(c) | the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
(a) | the gross assets or gross revenues of a Subsidiary of the Company will be determined from its financial statements (consolidated if it has Subsidiaries) upon which the latest audited financial statements of the Group have been based; |
(b) | if a Subsidiary of the Company becomes a member of the Group after the date on which the latest audited financial statements of the Group have been prepared, the gross assets or gross revenues of that Subsidiary will be determined from its latest financial statements; |
(c) | the gross assets or gross revenues of the Group will be determined from the Company’s latest audited financial statements, adjusted (where appropriate) to reflect the gross assets or gross revenues of any company or business subsequently acquired or disposed of; and |
(d) | if a Material Subsidiary disposes of all or substantially all of its assets to another Subsidiary of the Company, it will immediately cease to be a Material Subsidiary |
(a) | in the case the consent, waiver or amendment in question requires the approval of all the Lenders, Lenders whose Commitments aggregate more than 85% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 85% of the Total Commitments prior to that reduction); or |
(b) | in the case the consent, waiver or amendment in question requires the approval of the Majority Lenders, Lenders whose Commitments aggregate more than 60% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 60% of the Total Commitments prior to that reduction), |
(a) | for the purpose of determining a Lender's share in a Loan, the proportion which its Available Commitment bears to the Available Facility immediately prior to making the Loan; and |
(b) | for any other purpose on a particular date: |
(i) | the proportion which its Commitment bears to the Total Commitments on that date; or |
(ii) | if the Total Commitments have been cancelled, the proportion which its Commitments bore to the Total Commitments immediately before being cancelled. |
(a) | (if the currency is Sterling) the first day of that period; |
(b) | (if the currency is euro) two TARGET Days before the first day of that period; or |
(c) | (for any other currency) two Business Days before the first day of that period, |
(a) | in relation to LIBOR, as the rate at which the relevant Reference Bank could borrow funds in the London interbank market; or |
(b) | in relation to EURIBOR, as the rate at which the relevant Reference Bank could borrow funds in the European interbank market, |
(a) | made or to be made on the same day that a maturing Loan is due to be repaid; |
(b) | the aggregate amount of which is equal to or less than the amount of the maturing Loan; |
(c) | in the same currency as the maturing Loan (unless it arose as a result of the operation of Clause 7.2 (Revocation of a currency); and |
(d) | made or to be made to the Company for the purpose of refinancing that maturing Loan. |
(a) | in relation to LIBOR, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate); and |
(b) | in relation to EURIBOR, the euro interbank offered rate administered by the Banking Federation of the European Union (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Reuters screen (or any replacement Reuters page which displays that rate), |
(a) | a subsidiary within the meaning of section 1159 of the Companies Act 2006; and |
(b) | unless the context otherwise requires, a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006. |
(a) | the proposed Transfer Date specified in the relevant Transfer Certificate; and |
(b) | the date on which the Facility Agent executes the relevant Transfer Certificate. |
(a) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112; and |
(b) | any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere. |
1.2 | Construction |
1.2.1 | The following definitions have the meanings given to them in Clause 20 (Financial Covenants): |
(a) | Cash; |
(b) | Cash Equivalent Investments; |
(c) | Consolidated EBITDA; |
(d) | Interest Payable; |
(e) | Measurement Period; |
(f) | Regulatory Asset Base; and |
(g) | Total Net Debt. |
1.2.2 | In this Agreement, unless the contrary intention appears, a reference to: |
(a) | an amendment includes a supplement, novation, restatement or re-enactment and amended will be construed accordingly; |
(b) | assets includes present and future properties, revenues and rights of every description; |
(c) | an authorisation includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation; |
(d) | disposal means a sale, transfer, grant, lease or other disposal, whether voluntary or involuntary, and dispose will be construed accordingly; |
(e) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money; |
(f) | know your customer requirements are the identification checks that a Finance Party requests in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer; |
(g) | a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, joint venture or consortium), government, state, agency, organisation or other entity whether or not having separate legal personality; |
(h) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; |
(i) | the winding-up of a person includes the administration, dissolution or liquidation or other like process of that person, any composition or arrangement with the creditors, amalgamation, reconstruction, reorganisation or consolidation pursuant to Part XXVI of the Companies Act 2006 proposed or carried out in respect of that person or a company voluntary arrangement pursuant to the Insolvency Act 1986 carried out or proposed in respect of that person; |
(j) | a currency is a reference to the lawful currency for the time being of the relevant country; |
(k) | save as set out in the definition of Margin in Clause 1.1 (Definitions), a Default (other than an Event of Default) being outstanding means that it has not been remedied or waived and an Event of Default being outstanding means that it has not been waived; |
(l) | a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation; |
(m) | a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Agreement; |
(n) | a person includes its successors in title, permitted assigns and permitted transferees; |
(o) | a Finance Document or another document is a reference to that Finance Document or other document as amended; and |
(p) | a time of day is a reference to London time. |
1.2.3 | Unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: |
(a) | if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is not); |
(b) | if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and |
(c) | notwithstanding sub-clause 1.2.3(a) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month in which it is to end, as appropriate. |
1.2.4 | Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999 and notwithstanding any term of any Finance Document, the consent of any third party is not required for any variation (including any release or compromise of any liability) or termination of that Finance Document. |
1.2.5 | Unless the contrary intention appears: |
(a) | a reference to a Party will not include that Party if it has ceased to be a Party under this Agreement; |
(b) | a word or expression used in any other Finance Document or in any notice given in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement; and |
(c) | any obligation of the Company under the Finance Documents which is not a payment obligation remains in force for so long as any payment obligation of the Company is or may be outstanding under the Finance Documents. |
1.2.6 | The headings in this Agreement do not affect its interpretation. |
1.2.7 | The Company providing cash cover for an Ancillary Facility means the Company paying an amount in the currency of the Ancillary Facility to an interest-bearing account in the name of the Company and the following conditions being met: |
(a) | the account is with the Ancillary Lender for which that cash cover is to be provided; |
(b) | until no amount is or may be outstanding under that Ancillary Facility, withdrawals from the account may only be made to pay the relevant Finance Party amounts due and payable to it under this Agreement in respect of that Ancillary Facility; and |
(c) | the Company has executed a security document over that account, in form and substance satisfactory to the Ancillary Lender with which that account is held, creating a first ranking security interest over that account. |
1.2.8 | The Company repaying or prepaying any Ancillary Outstandings means: |
(a) | the Company providing cash cover in respect of the Ancillary Outstandings; |
(b) | the maximum amount payable under the Ancillary Facility being reduced or cancelled in accordance with its terms; or |
(c) | the Ancillary Lender being satisfied (acting reasonably) that it has no further liability under that Ancillary Facility, |
1.2.9 | An amount borrowed includes any amount utilised under an Ancillary Facility. |
2. | THE FACILITY |
2.1 | The Facility |
2.1.1 | Subject to the terms of this Agreement, the Lenders make available to the Company a multicurrency revolving credit facility in an aggregate amount the Base Currency Amount of which is equal to the Total Commitments. |
2.1.2 | Subject to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make all or part of its Commitment available to the Company as an Ancillary Facility. |
2.2 | Increase |
2.2.1 | The Company may by giving prior notice to the Facility Agent by no later than the date falling 10 Business Days after the effective date of a cancellation of: |
(a) | the Available Commitments of a Defaulting Lender in accordance with sub-clause 10.6.4 of Clause 10.6 (Involuntary prepayment and cancellation); or |
(b) | the Commitments of a Lender in accordance with: |
(i) | Clause 10.1 (Mandatory prepayment – illegality); or |
(ii) | sub-clause 10.6.2 of Clause 10.6 (Involuntary prepayment and cancellation), |
(c) | the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an "Increase Lender") selected by the Company (each of which shall not be a member of the Group and which is further acceptable to the Facility Agent (acting reasonably)) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender; |
(d) | the Company and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Company and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(e) | each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender; |
(f) | the Commitments of the other Lenders shall continue in full force and effect; and |
(g) | any increase in the Total Commitments shall take effect on the date specified by the Company in the notice referred to above or any later date on which the conditions set out in sub-clause 2.2.2 below are satisfied. |
2.2.2 | An increase in the Total Commitments will only be effective on: |
(a) | the execution by the Facility Agent of an Increase Confirmation from the relevant Increase Lender; and |
(b) | in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase the performance by the Facility Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Facility Agent shall promptly notify to the Company and the Increase Lender. |
2.2.3 | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective. |
2.2.4 | Unless the Facility Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Company shall, on the date upon which the increase takes effect, pay to the Facility Agent (for its own account) a fee of £1,750 and the Company shall promptly on demand pay the Facility Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.2. |
2.2.5 | The Company may pay to the Increase Lender a fee in the amount and at the times agreed between the Company and the Increase Lender in a letter between the Company and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph. |
2.2.6 | Clause 29.4 (Limitation of responsibility of Existing Lender) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: |
(a) | an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase; |
(b) | the "New Lender" were references to that "Increase Lender"; and |
(c) | a "re‑transfer" and "re-assignment" were references to respectively a "transfer" and "assignment"." |
2.2.7 | Each Party (other than the Increase Lender) irrevocably authorises the Facility Agent to execute any duly completed Increase Confirmation on its behalf. |
2.3 | Nature of a Finance Party's rights and obligations |
2.3.1 | the obligations of a Finance Party under the Finance Documents are several; |
2.3.2 | failure by a Finance Party to perform its obligations does not affect the obligations of any other Party under the Finance Documents; |
2.3.3 | no Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents; |
2.3.4 | the rights of a Finance Party under the Finance Documents are separate and independent rights; |
2.3.5 | a debt arising under the Finance Documents to a Finance Party is a separate and independent debt; and |
2.3.6 | a Finance Party may, except as otherwise stated in the Finance Documents, separately enforce those rights. |
3. | PURPOSE |
3.1 | Purpose |
3.2 | No obligation to monitor |
4. | CONDITIONS PRECEDENT |
4.1 | Conditions precedent documents |
4.2 | Further conditions precedent |
4.2.1 | the Repeating Representations are correct in all material respects; and |
4.2.2 | no Default or, in the case of a Rollover Loan, no Event of Default is outstanding or would result from the Loan. |
4.3 | Conditions relating to Optional Currencies |
4.3.1 | A currency will constitute an Optional Currency in relation to a Loan if: |
(a) | it is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market on the Quotation Day and the Drawdown Date for that Loan; and |
(b) | it is euros or U.S. Dollars or has been approved by the Facility Agent (acting on the instructions of all the Lenders) on or prior to receipt by the Facility Agent of the relevant Request for that Loan. |
4.3.2 | If the Facility Agent has received a written request from the Company for a currency to be approved under paragraph (b) of sub-clause 4.3.1 above, the Facility Agent will confirm to the Company by the Specified Time: |
(a) | whether or not the Lenders have granted their approval; and |
(b) | if approval has been granted, the minimum amount (and, if required, integral multiples) for any subsequent Loan in that currency. |
4.4 | Maximum number |
5. | UTILISATION |
5.1 | Giving of Requests |
5.1.1 | The Company may borrow a Loan by giving to the Facility Agent a duly completed Request not later than the Specified Time. |
5.1.2 | Each Request is irrevocable. |
5.2 | Completion of Requests |
5.2.1 | A Request for a Loan will not be regarded as having been duly completed unless: |
(a) | the Drawdown Date is a Business Day falling within the Availability Period; |
(b) | the currency and amount of the Loan comply with Clause 5.3 (Currency and amount); and |
(c) | the proposed Term complies with this Agreement. |
5.2.2 | Only one Loan may be requested in a Request. |
5.3 | Currency and amount |
5.3.1 | The currency specified in a Request must be either the Base Currency or an Optional Currency. |
5.3.2 | The amount of the proposed Loan must be: |
(a) | if the currency selected is the Base Currency, a minimum of £5,000,000 and an integral multiple of £1,000,000 or, if less, the Available Facility (or such other amount as the Facility Agent may agree); or |
(b) | if the currency selected is an Optional Currency, the minimum amount (and if required, integral multiple) specified by the Facility Agent pursuant to paragraph (b) of sub-clause 4.3.2 of Clause 4.3 (Conditions relating to Optional Currencies) or, if less, the Available Facility. |
5.4 | Advance of Loan |
5.4.1 | The Facility Agent must promptly notify each Lender of the details of the requested Loan and the amount of its share in that Loan. |
5.4.2 | If the conditions set out in this Agreement have been met, and subject to Clause 9.2 (Cashless Rollover), each Lender shall make its participation in each Loan available by no later than 2.00pm on the Drawdown Date through its Facility Office. |
5.4.3 | Save as set out in sub-clause 5.4.4 below, the amount of each Lender's share of the Loan will be its Pro Rata Share on the proposed Drawdown Date. |
5.4.4 | If a Loan is made to repay Ancillary Outstandings, each Lender's participation in that Loan will be in an amount (as determined by the Facility Agent) which will result as nearly as possible in the aggregate amount of its participation in the Loans then outstanding bearing the same proportion to the aggregate amount of the Loans then outstanding as its Commitment bears to the Total Commitments. |
5.4.5 | No Lender is obliged to participate in a Loan if as a result: |
(a) | the Base Currency Amount of its share in the aggregate amount of the Loans would exceed its Commitment; or |
(b) | the Base Currency Amount of the Loans would exceed the Total Commitments. |
5.4.6 | The Facility Agent shall determine the Base Currency Amount of each Loan which is to be made in an Optional Currency and shall notify each Lender of the amount, currency and the Base Currency Amount of each Loan, the amount of its participation in that Loan and, if different, the amount of that participation to be made available in accordance with Clause 17 (Payments), in each case by the Specified Time. |
6. | EXTENSION OPTION |
6.1 | The Company may by notice to the Facility Agent (the Initial Extension Request) not more than 60 days and not less than 30 days before the first anniversary of the date of |
6.2 | The Company may by notice to the Facility Agent (the Second Extension Request) no more than 60 days and not less than 30 days before the second anniversary of the date of the Amendment Agreement (the Second Anniversary), request that the Final Maturity Date: |
(a) | with respect to Lenders who have agreed to the Initial Extension Request, be extended for a further period of one year; and/or |
(b) | if no Initial Extension Request has been made, or with respect to Lenders who refused the Initial Extension Request: |
(i) | be extended for a period of one year; or |
(ii) | be extended for a period of two years, |
6.3 | The Facility Agent must promptly notify the Lenders of any Initial Extension Request or Second Extension Request (an Extension Request). |
6.4 | Each Lender may, in its sole discretion, agree to any Extension Request. Each Lender that agrees to an Extension Request by the date falling 15 days before, the relevant anniversary of the date of this Agreement, will extend its Commitment for a further period of one year or two years, as set out in the relevant Extension Request, from the then current Final Maturity Date and the Final Maturity Date of that Lender will be extended accordingly. |
6.5 | If any Lender fails to reply to an Extension Request on or before the date falling 15 days before the relevant anniversary of the date of this Agreement, it will be deemed to have refused that Extension Request and its Commitment will not be extended. |
6.6 | Subject to Clause 6.8 below, each Extension Request is irrevocable. |
6.7 | If one or more (but not all) of the Lenders agree to an Extension Request, then the Facility Agent must notify the Company and the Lenders which have agreed to the extension, identifying in that notification which Lenders have not agreed to the Extension Request. |
6.8 | The Company may, on the basis that one or more of the Lenders have not agreed to the Extension Request and no later than the date falling 5 days before the relevant anniversary of the date of this Agreement, withdraw the request by notice to the Facility Agent which will promptly notify the Lenders. |
7. | OPTIONAL CURRENCIES |
7.1 | Selection |
7.1.1 | The Company must select the currency of a Loan in its Request. The Company may select the Base Currency or an Optional Currency for a Loan. |
7.1.2 | Unless the Facility Agent otherwise agrees, the Loans may not be denominated at any one time in more than three currencies. |
7.2 | Revocation of currency |
7.2.1 | Notwithstanding any other term of this Agreement, if before the Specified Time on any Quotation Day the Facility Agent receives notice from a Lender that: |
(a) | the Optional Currency requested is not readily available to it in the relevant interbank market in the amount and for the period required; or |
(b) | participating in a Loan in the proposed Optional Currency might contravene any law or regulation applicable to it, |
7.2.2 | In this event: |
(a) | that Lender must participate in the Loan in the Base Currency (in an amount equal to that Lender's proportion of the Base Currency Amount or, in respect of a Rollover Loan, an amount equal to that Lender's proportion of the Base Currency Amount of the Rollover Loan that is due to be made); and |
(b) | the share of that Lender in the Loan and any other similarly affected Lender(s) will be treated as a separate Loan denominated in the Base Currency during that Term. |
7.2.3 | Any part of a Loan treated as a separate Loan under this sub-clause will not be taken into account for the purposes of any limit on the number of Loans or currencies outstanding at any one time. |
7.2.4 | A Loan will still be treated as a Rollover Loan if it is not denominated in the same currency as the maturing Loan by reason only of the operation of this sub-clause. |
7.3 | Optional Currency equivalents |
7.3.1 | whether any limit under this Agreement has been exceeded; |
7.3.2 | the amount of a Loan; |
7.3.3 | the share of a Lender in a Loan; |
7.3.4 | the amount of any repayment of a Loan; or |
7.3.5 | the undrawn amount of a Lender's Commitment, |
8. | ANCILLARY FACILITIES |
8.1 | Type of Facility |
8.1.1 | a multicurrency overdraft facility; |
8.1.2 | a multicurrency guarantee, bonding, documentary or stand-by letter of credit facility; |
8.1.3 | a short term multicurrency loan facility; |
8.1.4 | a derivatives facility; |
8.1.5 | a foreign exchange facility; or |
8.1.6 | any other multicurrency facility or accommodation required in connection with the business of the Group and which is agreed by the Company with an Ancillary Lender. |
8.2 | Availability |
8.2.1 | If the Company and a Lender agree and except as otherwise provided in this Agreement, the Lender may provide all or part of its Commitment as an Ancillary Facility. |
8.2.2 | An Ancillary Facility shall not be made available unless, not later than three Business Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Facility Agent has received from the Company: |
(a) | a notice in writing of the establishment of an Ancillary Facility and specifying: |
(i) | the proposed Ancillary Commencement Date and expiry date of the Ancillary Facility; |
(ii) | the proposed type of Ancillary Facility to be provided; |
(iii) | the proposed Ancillary Lender; |
(iv) | the proposed Ancillary Commitment, the maximum amount of the Ancillary Facility and, in the case of a Multi‑account Overdraft, its Designated Gross Amount and its Designated Net Amount; |
(v) | the proposed currency of the Ancillary Facility (if not denominated in the Base Currency); and |
(b) | any other information which the Facility Agent may reasonably request in connection with the Ancillary Facility. |
8.2.3 | The Facility Agent shall promptly notify the Ancillary Lender and the other Lenders of the establishment of an Ancillary Facility. |
8.2.4 | Subject to compliance with sub-clause 8.2.2 above: |
(a) | the Lender concerned will become an Ancillary Lender; and |
(b) | the Ancillary Facility will be available, |
8.3 | Terms of Ancillary Facilities |
8.3.1 | Except as provided below, the terms of any Ancillary Facility will be those agreed by the Ancillary Lender and the Company. |
8.3.2 | Those terms: |
(a) | must be based upon normal commercial terms at that time (except as varied by this Agreement); |
(b) | may only allow the Company to use the Ancillary Facility; |
(c) | may not allow the Ancillary Outstandings to exceed the Ancillary Commitment; |
(d) | may not allow the Ancillary Commitment of a Lender to exceed the Available Commitment of that Lender (before taking into account the effect of the Ancillary Facility on that Available Commitment); and |
(e) | must require that the Ancillary Commitment is reduced to nil, and that all Ancillary Outstandings are repaid not later than the Final Maturity Date (or such earlier date as the Commitment of the relevant Ancillary Lender (or its Affiliate) is reduced to zero). |
8.3.3 | If there is any inconsistency between any term of an Ancillary Facility and any term of this Agreement, this Agreement shall prevail except for (i) Clause 24.3 (Calculations) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Ancillary Facility; (ii) an Ancillary Facility comprising more than one account where the terms of the Ancillary Documents shall prevail to the extent required to permit the netting of balances on those accounts; and (iii) where the relevant term of this Agreement would be contrary to, or inconsistent with, the law governing the relevant Ancillary Document, in which case that term of this Agreement shall not prevail. |
8.3.4 | Interest, commission and fees on Ancillary Facilities are dealt with in Clause 25.6 (Interest, commission and fees on Ancillary Facilities). |
8.4 | Repayment of Ancillary Facility |
8.4.1 | An Ancillary Facility shall cease to be available on the Final Maturity Date or such earlier date on which its expiry date occurs or on which it is cancelled in accordance with the terms of this Agreement. |
8.4.2 | If an Ancillary Facility expires or is cancelled in accordance with its terms the Ancillary Commitment of the Ancillary Lender shall be reduced to zero. |
8.4.3 | No Ancillary Lender may demand repayment or prepayment of any Ancillary Outstandings prior to the expiry date of the relevant Ancillary Facility unless: |
(a) | required to reduce the Permitted Gross Outstandings of a Multi-account Overdraft to or towards an amount equal to its Designated Net Amount; |
(b) | the Total Commitments have been cancelled in full, or all outstanding Loans have become due and payable in accordance with the terms of this Agreement; |
(c) | it becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in its Ancillary Facility (or it becomes unlawful for any Affiliate of the Ancillary Lender for the Ancillary Lender to do so); or |
(d) | both: |
(i) | the Available Commitments; and |
(ii) | the notice of the demand given by the Ancillary Lender, |
8.4.4 | If a Loan is made to repay Ancillary Outstandings in full, the relevant Ancillary Commitment shall be reduced to zero. |
8.5 | Limitations on Ancillary Outstandings |
8.5.1 | the Ancillary Outstandings under any Ancillary Facility shall not exceed the Ancillary Commitment applicable to that Ancillary Facility; and |
8.5.2 | in relation to a Multi-account Overdraft: |
(a) | the Ancillary Outstandings shall not exceed the Designated Net Amount applicable to that Multi-account Overdraft; and |
(b) | the Gross Outstandings shall not exceed the Designated Gross Amount applicable to that Multi-account Overdraft. |
8.6 | Information |
8.7 | Affiliates of Lenders as Ancillary Lenders |
8.7.1 | Subject to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender. In such case, the Lender and its Affiliate shall be treated as a single Lender whose Commitment is the amount set out opposite the relevant Lender's name in Schedule 1 (Original Parties) and/or the amount of any Commitment transferred to or assumed by that Lender under this Agreement, to the extent (in each case) not cancelled, reduced or transferred by it under this Agreement. |
8.7.2 | The Company shall specify any relevant Affiliate of a Lender in any notice delivered by the Company to the Facility Agent pursuant to paragraph 8.2.2(a) of Clause 8.2 (Availability). |
8.7.3 | If a Lender assigns all of its rights and benefits or transfers all of its rights and obligations to a New Lender, its Affiliate shall cease to have any obligations under this Agreement or any Ancillary Document. |
8.7.4 | Where this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that document, the relevant Lender shall ensure that the obligation is performed by its Affiliate. |
8.8 | Commitment amounts |
8.9 | Amendments and Waivers – Ancillary Facilities |
9. | REPAYMENT |
9.1 | Repayment of Loans |
9.1.1 | The Company must repay each Loan in full on its Maturity Date. No Loan may be outstanding after the Final Maturity Date. |
9.1.2 | Subject to the other terms of this Agreement, any amounts repaid under sub-clause 9.1.1 above may be re-borrowed. |
9.2 | Cashless Rollover |
9.2.1 | Without prejudice to the Company's obligation under Clause 9.1 above, if one or more Loans are to be made available to the Company: |
(a) | on the same day that a maturing Loan is due to be repaid by the Company; |
(b) | in the same currency as the maturing Loan (unless it arose as a result of the operation of Clause 7.2 (Revocation of currency); and |
(c) | in whole or in part for the purpose of refinancing the maturing Loan, |
(i) | if the amount of the maturing Loan exceeds the aggregate amount of the new Loans: |
(A) | the Company will only be required to pay an amount in cash in the relevant currency equal to that excess; and |
(B) | each Lender's participation (if any) in the new Loans shall be treated as having been made available and applied by the Company in or towards repayment of that Lender's participation (if any) in the maturing Loan and that Lender will not be required to make its participation in the new Loans available in cash; and |
(ii) | if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans: |
(A) | the Company will not be required to make any payment in cash; and |
(B) | each Lender will be required to make its participation in the new Loans available in cash only to the extent that its participation (if any) in the new Loans exceeds that Lender's participation (if any) in the maturing Loan and the remainder of that Lender's participation in the new Loans shall be treated as having been made available and applied by the Company in or towards repayment of that Lender's participation in the maturing Loan. |
10. | PREPAYMENT AND CANCELLATION |
10.1 | Mandatory prepayment - illegality |
10.1.1 | A Lender must notify the Company promptly if it becomes aware that it is unlawful in any jurisdiction for that Lender to perform any of its obligations under a Finance Document or to fund or maintain its share in any Loan. |
10.1.2 | After notification under clause 10.1.1 above: |
(a) | the Company must repay or prepay the share of that Lender in each Loan made to it on the date specified in clause 10.1.3 below; and |
(b) | the Commitments of that Lender will be immediately cancelled. |
10.1.3 | The date for repayment or prepayment of a Lender's share in a Loan will be: |
(a) | the Business Day following receipt by the Company of notice from the Lender under sub-clause 10.1.1 above; or |
(b) | if later, the latest date allowed by the relevant law. |
10.2 | Mandatory prepayment - change of control |
10.2.1 | within five days of such date, the Company shall give notice of such change of control to the Facility Agent; |
10.2.2 | the Lenders and the Company shall immediately enter into negotiations for a period of not more than 45 days from the date of the change of control with a view to agreeing whether the Facility shall continue to be made available and on what terms; |
10.2.3 | if no such agreement is reached within the said period of 45 days then: |
(a) | any Lender may on 10 days' notice to the Facility Agent and to the Company require the repayment of its share in each Loan and the repayment of its Ancillary Outstandings and cancel its Commitment; and |
(b) | the Majority Lenders may on 10 days' notice to the Company require repayment in full of all outstanding Loans and Ancillary Outstandings and cancel the Total Commitments; and |
10.2.4 | a Lender shall not be obliged to fund any further loans under the Facility (except for a Rollover Loan) during the negotiation period set out in sub-clause 10.2.2, |
10.3 | Voluntary prepayment |
10.3.1 | The Company may, by giving not less than five Business Days' prior written notice to the Facility Agent, prepay any Loan at any time in whole or in part. |
10.3.2 | A prepayment of part of a Loan drawn in US Dollars must be in a minimum amount of $5,000,000 and an integral multiple of U.S. $1,000,000. |
10.3.3 | A prepayment of part of a Loan drawn in Sterling must be in a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
10.3.4 | A prepayment of part of a Loan drawn in euros must be in a minimum amount of €5,000,000 and an integral multiple of €1,000,000. |
10.4 | Automatic cancellation |
10.5 | Voluntary cancellation |
10.5.1 | The Company may, by giving not less than three Business Days' prior written notice to the Facility Agent, cancel the unutilised amount of the Total Commitments in whole or in part. |
10.5.2 | Partial cancellation of the Total Commitments must be in a minimum amount of £5,000,000 and an integral multiple of £1,000,000. |
10.5.3 | Any cancellation in part shall be applied against the Commitment of each Lender pro rata. |
10.6 | Involuntary prepayment and cancellation |
10.6.1 | If the Company is, or will be, required to pay to a Lender a Tax Payment or an Increased Cost, the Company may, while the requirement continues, give notice to the Facility Agent requesting prepayment and cancellation in respect of that Lender. |
10.6.2 | After notification under sub-clause 10.6.1 above: |
(a) | the Company must repay or prepay that Lender's share in each Loan made to it on the date specified in sub-clause 10.6.3 below; and |
(b) | the Commitments of that Lender will be immediately cancelled. |
10.6.3 | The date for repayment or prepayment of a Lender's share in a Loan will be the last day of the current Term for that Loan or, if earlier, the date specified by the Company in its notification. |
10.6.4 |
(a) | If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent 5 Business Days' notice of cancellation of the Available Commitment of that Lender. |
(b) | On the notice referred to in paragraph (a) above becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero. |
(c) | The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders. |
10.7 | Re-borrowing of Loans |
10.8 | Miscellaneous provisions |
10.8.1 | Any notice of prepayment and/or cancellation under this Agreement is irrevocable and must specify the relevant date(s) and the affected Loans and Commitments. The Facility Agent must notify the Lenders promptly of receipt of any such notice. |
10.8.2 | All prepayments made under Clause 10.2 (Mandatory prepayment - change of control) shall be applied pro rata to each Lender's participation in such Loan. |
10.8.3 | All prepayments under this Agreement must be made with accrued interest on the amount prepaid. No premium or penalty is payable in respect of any prepayment except for Break Costs. |
10.8.4 | The Majority Lenders may agree a shorter notice period for a voluntary prepayment or a voluntary cancellation. |
10.8.5 | No prepayment or cancellation is allowed except in accordance with the express terms of this Agreement. |
10.8.6 | Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may subsequently be reinstated. |
11. | INTEREST |
11.1 | Calculation of interest |
11.1.1 | Margin; and |
11.1.2 | LIBOR or, in relation to any Loan in euro, EURIBOR. |
11.2 | Payment of interest |
11.3 | Interest on overdue amounts |
11.3.1 | If the Company fails to pay any amount payable by it under the Finance Documents, it must immediately on demand by the Facility Agent pay interest on the overdue amount from its due date up to the date of actual payment, both before, on and after judgment. |
11.3.2 | Interest on an overdue amount is payable at a rate determined by the Facility Agent to be one per cent. per annum above the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount. For this purpose, the Facility Agent may (acting reasonably): |
(a) | select successive Terms of any duration of up to three months; and |
(b) | determine the appropriate Quotation Day for that Term. |
11.3.3 | Notwithstanding sub-clause 11.3.2 above, if the overdue amount is a principal amount of a Loan and becomes due and payable prior to the last day of its current Term, then: |
(a) | the first Term for that overdue amount will be the unexpired portion of that Term; and |
(b) | the rate of interest on the overdue amount for that first Term will be one per cent. per annum above the rate then payable on that Loan. |
11.3.4 | Interest (if unpaid) on an overdue amount will be compounded with that overdue amount at the end of each of its Terms but will remain immediately due and payable. |
11.4 | Notification of rates of interest |
12. | TERMS |
12.1 | Selection |
12.1.1 | Each Loan has one Term only. |
12.1.2 | The Company must select the Term for a Loan in the relevant Request. |
12.1.3 | Subject to the following provisions of this Clause, each Term for a Loan will be one, two, three or six months or for a period of one to thirty days or any other period agreed between the Company and the Lenders. |
12.1.4 | The Company shall not use its right under paragraph 12.1.3 above to select for a Loan a Term of less than one month's duration more than six times in any calendar year. |
12.1.5 | A Term for a Loan shall start on the Drawdown Date for that Loan. |
12.2 | No overrunning the Final Maturity Date |
12.3 | Other adjustments |
12.3.1 | The Facility Agent and the Company may enter into such other arrangements as they may agree for the adjustment of Terms and the consolidation and/or splitting of Loans. |
12.3.2 | Subject to Clause 12.3.3 below, if two or more Terms end on the same date, those Loans will, unless the Company specifies to the contrary in the Request for the next Term, be consolidated into, and treated as, a single Loan on the last day of the Term. |
12.3.3 | Subject to Clause 4.4 (Maximum Number) and Clause 5.2 (Completion of Requests) if the Company requests in a Request that a Loan be divided into two or more Loans, that Loan will, on the last day of its Term, be so divided into the Base Currency Amounts specified in that Request, having an aggregate Base Currency Amount equal to the Base Currency Amount of the Loan immediately before its division. |
12.4 | Notification |
13. | MARKET DISRUPTION |
13.1 | Failure of a Reference Bank to supply a rate |
13.2 | Market disruption |
13.2.1 | In this Clause, each of the following events is a market disruption event: |
(a) | at or about noon on the Quotation Day for the relevant Term, LIBOR or if applicable EURIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR or, if applicable, EURIBOR for the relevant currency and Term; or |
(b) | before close of business in London on the Quotation Day for the relevant Term, the Facility Agent receives notification from a Lender or Lenders whose participations in the relevant Loan exceed 50% of that Loan that the cost to it (or them) of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR or, if applicable, EURIBOR for the relevant Term. |
13.2.2 | The Facility Agent must promptly notify the Company and the Lenders of a market disruption event. |
13.2.3 | After notification under sub-clause 13.2.1(a) above, the rate of interest on each Lender's share in the affected Loan for the relevant Term will be the aggregate of the applicable: |
(a) | Margin; and |
(b) | rate notified to the Facility Agent by that Lender as soon as practicable, and in any event before interest is due to be paid in respect of that Term, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its share in that Loan from whatever source it may reasonably select. |
13.3 | Alternative basis of interest or funding |
13.3.1 | If a market disruption event occurs and the Facility Agent or the Company so requires, the Company and the Facility Agent must enter into negotiations for a period of not more than 30 days with a view to agreeing an alternative basis for determining the rate of interest and/or funding for the affected Loan and any future Loan. |
13.3.2 | Any alternative basis agreed will be, with the prior consent of all the Lenders, binding on all the Parties. |
14. | TAX GROSS-UP AND INDEMNITIES |
14.1 | Definitions |
14.1.1 | In this Agreement: |
(a) | a Lender (other than a Lender within paragraph (b) below) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is: |
(i) | a Lender: |
(A) | which is a bank (as defined for the purpose of section 879 of ITA) making an advance under a Finance Document; or |
(B) | in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of ITA) at the time that that advance was made, |
(ii) | a Lender which is: |
(A) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(B) | a partnership each member of which is: |
(1) | a company so resident in the United Kingdom; or |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(C) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or |
(iii) | a Treaty Lender; or |
(b) | a Lender which is a building society (as defined for the purpose of section 880 of ITA) making an advance under a Finance Document. |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company. |
(a) | is treated as a resident of a Treaty State for the purposes of the Treaty; |
(b) | does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively connected; and |
(c) | meets all other conditions which must be met under the Treaty for residents of such Treaty State to obtain full exemption from tax on interest imposed by the United Kingdom, except that for this purpose it shall be assumed that the following are satisfied: |
(i) | any condition which relates (expressly or by implication) to the amounts or terms of any Loan or the Finance Documents or any condition which relates (expressly or by implication) to there not being a special relationship between the Company and the Finance Party or between them both and another person; and |
(ii) | any necessary procedural formality. |
14.1.2 | Unless a contrary indication appears, in this Clause 14 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination. |
14.2 | Tax gross-up |
14.2.1 | The Company shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
14.2.2 | The Company shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Company. |
14.2.3 | If a Tax Deduction is required by law to be made by the Company, the amount of the payment due from the Company shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
14.2.4 | A payment shall not be increased under sub-clause 14.2.3 above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due: |
(a) | the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or |
(b) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | an officer of HM Revenue & Customs has given (and not revoked) a direction (a "Direction") under section 931 of the ITA which relates to the payment and that Lender has received from the Company a certified copy of that Direction; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or |
(c) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (a)(ii) of the definition of Qualifying Lender and: |
(i) | the relevant Lender has not given a Tax Confirmation to the Company; and |
(ii) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Company on the basis that the Tax Confirmation would have enabled the Company to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of section 930 of the ITA; or |
(d) | the relevant Lender is a Treaty Lender and the Company making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under sub-clause 14.2.7 below. |
14.2.5 | If the Company is required to make a Tax Deduction, the Company shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
14.2.6 | Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Company making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment a statement under Section 975 of the ITA, or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. |
(a) | Subject to paragraph (b) below, a Treaty Lender and the Company which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Company to obtain authorisation to make that payment without a Tax Deduction. |
(b) | Nothing in paragraph (a) above shall require a Treaty Lender to: |
(i) | register under the HMRC DT Treaty Passport scheme; |
(ii) | apply the HMRC DT Treaty Passport scheme to any Loan if it has so registered; or |
(iii) | file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph 14.2.10 below or paragraph 14.6.1 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation) and the Company making that payment has not complied with its obligations under paragraph 14.2.11 below or paragraph 14.6.2 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation). |
14.2.8 | A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is entered into gives a Tax Confirmation to the Company by entering into this Agreement. |
14.2.9 | A UK Non-Bank Lender shall promptly notify the Company and the Facility Agent if there is any change in the position from that set out in the Tax Confirmation. |
14.2.10 | A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Company) by including its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 1 (Original Parties). |
14.2.11 | Where a Lender includes the indication described in paragraph 14.2.10 above in Schedule 1 (Original Parties), the Company shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing provided that the Company shall not be liable in respect of any non-compliance with its obligations under this Clause 14.2.11 where such non-compliance is due to circumstances beyond the control of the Company (including, without limitation, any delay, failure or omission on the part of the relevant Lender or the Facility Agent to comply with any obligation owed to the Company, or to any inaccuracy in any information provided by the relevant Lender or the Facility Agent in connection with the DT Treaty Passport scheme). |
14.2.12 | Any Lender which has confirmed that it is entitled to use its DT Treaty Passport in accordance with Clause 14.2.10 or Clause 14.6.1 will reasonably promptly notify the Facility Agent and the Company if at any time it ceases to holds a passport under the HMRC DT Treaty Passport scheme or if it ceases to be able to use such passport as a Lender. |
14.2.13 | If a Lender has not included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with sub-clause 14.2.10 above or sub-clause 14.6.1 of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation), the Company shall not file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment or its participation in any Loan. |
14.3 | Tax indemnity |
14.3.1 | Except as provided below, the Company must, within three Business Days of demand, indemnify a Finance Party against any loss or liability which that Finance Party (in its absolute discretion) determines will be or has been suffered (directly or indirectly) by that Finance Party for or on account of Tax in relation to a payment received or receivable (or any payment deemed to be received or receivable) under a Finance Document. |
14.3.2 | Sub-clause 14.3.1 above does not apply to any Tax assessed on a Finance Party under the laws of the jurisdiction in which: |
(a) | that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(b) | that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
14.3.3 | Sub-clause 14.3.1 above does not apply to any Tax assessed on a Finance Party to the extent the loss or liability: |
(a) | is compensated for by an increased payment under Clause 14.2 (Tax gross-up); |
(b) | would have been compensated for by an increased payment under Clause 14.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in Clause 14.2 (Tax gross-up) applied; or |
(c) | relates to a FATCA Deduction required to be made by a Party. |
14.3.4 | A Finance Party making, or intending to make, a claim under sub-clause 14.3.1 above must promptly notify the Company of the event which will give, or has given, rise to the claim. |
14.4 | Tax Credit |
14.5 | Lender Status Confirmation |
14.5.1 | not a Qualifying Lender; |
14.5.2 | a Qualifying Lender (other than a Treaty Lender); or |
14.5.3 | a Treaty Lender. |
14.6 | HMRC DT Treaty Passport scheme confirmation |
14.6.1 | A New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Facility Agent and without liability to the Company) in the Transfer Certificate or Increase Confirmation which it executes by including its scheme reference number and its jurisdiction of tax residence in that Transfer Certificate or Increase Confirmation. |
14.6.2 | Where a New Lender includes the indication described in sub-clause 14.6.1 above in the relevant Transfer Certificate or Increase Confirmation the Company shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the relevant Transfer Date and shall promptly provide the Lender with a copy of that filing. |
14.7 | Stamp taxes |
14.8 | VAT |
14.8.1 | All amounts set out, or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to sub-clause 14.8.2 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall |
14.8.2 | If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Subject Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT. |
14.8.3 | Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. |
14.8.4 | Any reference in this Clause 14.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994). |
14.9 | FATCA Information |
14.9.1 | Subject to sub-clause 14.9.3 below, each Party shall, within ten Business Days of a reasonable request by another Party: |
(a) | confirm to that other Party whether it is: |
(i) | a FATCA Exempt Party; or |
(ii) | not a FATCA Exempt Party; and |
(b) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; |
(c) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime. |
14.9.2 | If a Party confirms to another Party pursuant to paragraph (a) of sub-clause 14.9.1 above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
14.9.3 | Sub-clause 14.9.1 above shall not oblige any Finance Party to do anything, and paragraph (c) of sub-clause 14.91. above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(a) | any law or regulation; |
(b) | any fiduciary duty; or |
(c) | any duty of confidentiality. |
14.9.4 | If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a) or (b) of sub-clause 14.9.1 above (including, for the avoidance of doubt, where sub-clause 14.9.3 above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
14.10 | FATCA Deduction |
14.10.1 | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction, or otherwise compensate the recipient of the payment for that FATCA Deduction. |
14.10.2 | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Company, the Facility Agent and the other Finance Parties. |
15. | INCREASED COSTS |
15.1 | Increased Costs |
15.1.1 | the introduction of, or any change in, or any change in the interpretation or application of, any law or regulation; |
15.1.2 | compliance with any law or regulation made after the date of this Agreement provided that for the purposes of this Agreement and any other Finance |
15.1.3 | the implementation or application of, or compliance with, Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV. |
15.2 | Exceptions |
15.2.1 | compensated for under another Clause or would have been but for an exception to that Clause; |
15.2.2 | a Tax on the overall net income of a Finance Party or any of its Affiliates; |
15.2.3 | attributable to a FATCA Deduction required to be made by a Party; |
15.2.4 | attributable to a Finance Party or its Affiliate wilfully failing to comply with any law or regulation; |
15.2.5 | attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates); or |
15.2.6 | not notified by the relevant Finance Party to the Facility Agent and the Company within three Months of that Finance Party becoming aware of such Increased Cost. |
15.3 | Claims |
16. | MITIGATION |
16.1 | Mitigation |
16.1.1 | Each Finance Party must, in consultation with the Company (other than upon the occurrence of an event referred to at paragraph (d) below where no such consultation is required), take all reasonable steps to mitigate any circumstances which arise and which result or would result in the Facility ceasing to be available or: |
(a) | any Tax Payment or Increased Cost being payable to that Finance Party; |
(b) | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
(c) | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; or |
(d) | the occurrence of any market disruption event, |
16.1.2 | A Finance Party is not obliged to take any step under this Clause 16 if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
16.1.3 | Each Finance Party must promptly notify the Company of any circumstances as described in paragraphs (a) to (d) of sub-clause 16.1.1 of this Clause 16.1. |
16.1.4 | The Company must indemnify each Finance Party for all costs and expenses reasonably incurred by it as a result of any step taken under this Clause 16.1. |
16.1.5 | This Clause does not in any way limit the obligations of the Company under the Finance Documents. |
16.2 | Substitution |
16.2.1 | any Tax Payment or Increased Cost being payable to that Finance Party; |
16.2.2 | that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; |
16.2.3 | that Finance Party incurring any cost of complying with the minimum reserve requirements of the European Central Bank; |
16.2.4 | the occurrence of any market disruption event; or |
16.2.5 | any Lender becoming a Non-Consenting Lender, |
16.2.6 | the Company shall have no right to replace the Facility Agent; |
16.2.7 | neither the Facility Agent nor such Finance Party shall have any obligation to the Company to find a Replacement Finance Party; |
16.2.8 | the transfer must take place no later than 14 days after the notice referred to above; |
16.2.9 | in no event shall such Finance Party be required to pay or surrender to the Replacement Finance Party any of the fees received by such Finance Party pursuant to the Finance Documents; and |
16.2.10 | the Finance Party shall only be obliged to transfer its rights and obligations pursuant to this Clause 16.2 once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Finance Party. |
16.3 | Conduct of business by a Finance Party |
16.3.1 | interfere with the right of any Finance Party to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit or oblige any Finance Party to investigate or claim any Tax Credit; or |
16.3.2 | oblige any Finance Party to disclose any information relating to its affairs (Tax or otherwise) or any computation in respect of Tax. |
17. | PAYMENTS |
17.1 | Place |
17.1.1 | in the principal financial centre of the country of the relevant currency; or |
17.1.2 | in the case of euro, in the principal financial centre of a Participating Member State or London, |
17.2 | Funds |
17.3 | Distribution |
17.3.1 | Each payment received by the Facility Agent under the Finance Documents for another Party must, except as provided below, be made available by the Facility Agent to that Party by payment (as soon as practicable after receipt) to its account with such office or bank: |
(a) | in the principal financial centre of the country of the relevant currency; or |
(b) | in the case of euro, in the principal financial centre of a Participating Member State or London, |
17.3.2 | The Facility Agent may apply any amount received by it for the Company in or towards payment (as soon as practicable after receipt) of any amount due from the Company under the Finance Documents or in or towards the purchase of any amount of any currency to be so applied. |
17.3.3 | Where a sum is paid to the Facility Agent under this Agreement for another Party, the Facility Agent is not obliged to pay that sum to that Party until it has established that it has actually received it. However, the Facility Agent may assume that the sum has been paid to it, and, in reliance on that assumption, make available to that Party a corresponding amount. If it transpires that the sum has not been received by the Facility Agent, that Party must immediately on demand by the Facility Agent refund any corresponding amount made available to it together with interest on that amount from the date of payment to the date of receipt by the Facility Agent at a rate calculated by the Facility Agent to reflect its cost of funds. |
17.4 | Currency of account |
17.4.1 | Unless a Finance Document specifies that payments under it are to be made in a different manner, the currency of each amount payable under the Finance Documents is determined under this Clause. |
17.4.2 | Interest is payable in the currency in which the relevant amount in respect of which it is payable is denominated. |
17.4.3 | A repayment or prepayment of any principal amount (or overdue amount) is payable in the currency in which that principal amount (or overdue amount) is denominated on its due date. |
17.4.4 | Amounts payable in respect of costs and expenses and Taxes are payable in the currency in which they are incurred. |
17.4.5 | Each other amount payable under the Finance Documents is payable in Sterling. |
17.4.6 | Any amount expressed to be payable in a currency other than Sterling shall be paid in that other currency. |
17.5 | No set-off or counterclaim |
17.6 | Business Days |
17.6.1 | If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment will instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not) or whatever day the Facility Agent determines is market practice. |
17.6.2 | During any extension of the due date for payment of any principal (or overdue amount) under this Agreement interest is payable on that principal (or overdue amount) at the rate payable on the original due date. |
17.7 | Impaired Agent |
17.7.1 | If, at any time, the Facility Agent becomes an Impaired Agent, the Company or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with Clause 17.1 (Place) may instead either pay that amount direct to the required recipient or pay that amount to an interest bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Company or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents. |
17.7.2 | All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements. |
17.7.3 | A Party which has made a payment in accordance with this Clause 17.7 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account. |
17.7.4 | Promptly upon the appointment of a successor Facility Agent in accordance with Clause 23.14 (Replacement of the Facility Agent), each Party which has made a payment to a trust account in accordance with this Clause 17.7 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Facility Agent for distribution in accordance with Clause 17.3 (Distribution). |
17.7.5 | For the purposes of this Clause 17.7 only, an Acceptable Bank shall include any bank or financial institution approved by the Facility Agent or, if the Facility Agent is an Impaired Agent, the Majority Lenders. |
17.8 | Partial payments |
17.8.1 | If any Administrative Party receives a payment insufficient to discharge all the amounts then due and payable by the Company under the Finance Documents, the Administrative Party must apply that payment towards the obligations of the Company under the Finance Documents in the following order: |
(a) | first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Administrative Parties under the Finance Documents; |
(b) | secondly, in or towards payment pro rata of any accrued interest or fee due but unpaid under this Agreement; |
(c) | thirdly, in or towards payment pro rata of any principal amount due but unpaid under this Agreement; and |
(d) | fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
17.8.2 | The Facility Agent must, if so directed by all the Lenders, vary the order set out in paragraphs (a) to (d) of sub-clause 17.8.1 of this Clause 17.8. |
17.8.3 | This Clause will override any appropriation made by the Company. |
17.9 | Timing of payments |
18. | REPRESENTATIONS |
18.1 | Representations |
18.2 | Status |
18.3 | Powers and authority |
18.4 | Legal validity |
18.5 | Non-conflict |
18.5.1 | any law or regulation applicable to it and violation of which has or is likely to have a Material Adverse Effect; or |
18.5.2 | its constitutional documents. |
18.6 | No default |
18.6.1 | No Event of Default is outstanding or might reasonably be expected to result from the making of any Loan. |
18.6.2 | No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which might have a Material Adverse Effect. |
18.7 | Authorisations |
18.7.1 | in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents; and |
18.7.2 | to make the Finance Documents admissible in evidence in England and Wales, |
18.8 | Financial statements |
18.8.1 | have been prepared in accordance with accounting principles and practices generally accepted in its jurisdiction of incorporation, consistently applied; and |
18.8.2 | fairly represent its consolidated financial condition as at the date to which they were drawn up, |
18.9 | No material adverse change |
18.10 | Litigation |
18.11 | Winding Up |
18.12 | Non-Violation of other Agreements: |
18.13 | Governing Law and Enforcement |
18.13.1 | The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation. |
18.13.2 | Any judgement obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation. |
18.14 | Deduction of Tax |
18.14.1 | a Qualifying Lender: |
(a) | falling within paragraph (a)(i) of the definition of Qualifying Lender; or |
(b) | except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (a)(ii) of the definition of Qualifying Lender; or |
(c) | falling within paragraph (b) of the definition of Qualifying Lender or; |
18.14.2 | a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488). |
18.15 | No filing or stamp taxes |
18.16 | No misleading information |
18.16.1 | any written factual information provided by any member of the Group or on its behalf was true and accurate in all material respects as at the date of the relevant report or document or as at the date (if any) at which it is stated to be given; |
18.16.2 | the financial projections provided have been prepared on the basis of recent historical information and on the basis of reasonable assumptions as at the date provided; and |
18.16.3 | no event or circumstance has occurred or arisen and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in such written information being untrue or misleading in any material respect. |
18.17 | Pari Passu ranking |
18.18 | Licence |
18.19 | Sanctions |
18.20 | Anti- Corruption |
18.21 | Times for making representations |
18.21.1 | The representations set out in this Clause are made by the Company on the date of this Agreement. |
18.21.2 | The Repeating Representations are deemed to be repeated by the Company on the date of each Request and the first day of each Term. |
18.21.3 | When a representation is repeated, it is applied to the circumstances existing at the time of repetition. |
19. | INFORMATION COVENANTS |
19.1 | Financial statements |
19.1.1 | The Company must supply to the Facility Agent (in sufficient copies for all the Lenders if the Facility Agent so requests): |
(a) | its audited consolidated financial statements for each of its financial years; and |
(b) | its interim consolidated financial statements for the first half-year of each of its financial years. |
19.1.2 | All financial statements must be supplied as soon as they are available and: |
(a) | in the case of the Company's audited consolidated financial statements, within 180 days; and |
(b) | in the case of the Company's interim financial statements, within 90 days, |
19.2 | Form of Financial Statement |
19.2.1 | the Company and the Facility Agent (on behalf of and after consultation with all the Lenders) shall, on the request of the Facility Agent or the Company, negotiate in good faith with a view to agreeing such amendments to the financial ratios and/or the definitions of the terms used in Clause 20 (Financial covenants) as are necessary to give the Lenders comparable protection to that contemplated at the date of this Agreement; |
19.2.2 | if amendments are agreed by the Company and the Majority Lenders within 25 days, those amendments shall take effect in accordance with the terms of that agreement; and |
19.2.3 | if such amendments are not so agreed within 25 days, the Company shall: |
(a) | within 30 days after the end of that 25 day period; and |
(b) | with all subsequent financial statements to be delivered to the Facility Agent under Clause 19.1, |
19.3 | Compliance Certificate |
19.3.1 | The Company must supply to the Facility Agent a Compliance Certificate with each set of its financial statements sent to the Facility Agent under this Agreement. |
19.3.2 | Each Compliance Certificate must be signed by two directors of the Company. |
19.4 | Information - miscellaneous |
19.4.1 | copies of all documents despatched by the Company to its creditors generally (or any class of them) in each case at the same time as they are despatched; |
19.4.2 | promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any |
19.4.3 | promptly, details of the loss of the Licence or any communication from OFGEM or other government agency regarding any potential or threatened loss of the Licence; |
19.4.4 | promptly on receiving them, details of any modification of an Authorisation or other material regulatory notices from OFGEM or other government agency; |
19.4.5 | a copy of all material information relating to any matter which is reasonably likely to have a Material Adverse Effect which the Company supplies to, or receives from, any applicable regulatory body (including OFGEM) (at the same time as it is supplied to, or promptly following its receipt from, the applicable regulatory body); |
19.4.6 | written notice of the details of any proposed changes to the Licence as soon as reasonably practicable after becoming aware of the same (other than changes of a formal, minor or technical nature); |
19.4.7 | within 5 Business Days of receiving them, details of any change to the rating by Moody's or Standard & Poor's of the long-term, unsecured and non credit-enhanced debt obligations of the Company; |
19.4.8 | the Company shall deliver to the Facility Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the Company), actuarial reports in relation to all pension schemes mentioned in sub-clause 21.15.1 of Clause 21.15 (Pensions). This obligation shall apply to only those pension schemes (or groups of the Electricity Supply Pension Scheme) of which the Company is at that time a participating employer and to those reports which have been provided to the Company; |
19.4.9 | promptly on request, a list of the then current Material Subsidiaries; and |
19.4.10 | promptly on request, such further information regarding the financial condition, business and operations of the Group as any Finance Party through the Facility Agent may reasonably request. |
19.5 | Notification of Default |
19.5.1 | The Company must notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. |
19.5.2 | Promptly on request by the Facility Agent, the Company must supply to the Facility Agent a certificate signed by two of its directors on its behalf, certifying that no Default is outstanding or, if a Default is outstanding, specifying the Default and the steps, if any, being taken to remedy it. |
19.6 | Use of websites |
19.6.1 | Except as provided below, the Company may deliver any information under this Agreement to a Lender by posting it on to an electronic website if: |
(a) | the Facility Agent and the Lender agree; |
(b) | the Company and the Facility Agent designate an electronic website for this purpose; |
(c) | the Company notifies the Facility Agent of the address of and password for the website; and |
(d) | the information posted is in a format agreed between the Company and the Facility Agent. |
19.6.2 | Notwithstanding the above, the Company must supply to the Facility Agent in paper form a copy of any information posted on the website together with sufficient copies for: |
(a) | any Lender not agreeing to receive information via the website; and |
(b) | any other Lender within ten Business Days of request by that Lender. |
19.6.3 | The Company must promptly upon becoming aware of its occurrence, notify the Facility Agent if: |
(a) | the website cannot be accessed; |
(b) | the website or any information on the website is infected by any electronic virus or similar software; |
(c) | the password for the website is changed; or |
(d) | any information to be supplied under this Agreement is posted on the website or amended after being posted. |
19.7 | Know your customer requirements |
19.7.1 | If: |
(a) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(b) | any change in the status of the Company after the date of this Agreement; or |
(c) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
20. | FINANCIAL COVENANTS |
20.1 | Definitions |
(a) | that cash is repayable: |
(i) | if that cash is deposited with a Lender, within 180 days after the relevant date of calculation; or |
(ii) | if that cash is deposited with any other lender or financial institution, within 45 days after the relevant date of calculation; |
(b) | repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition; |
(c) | there is no Security Interest over that cash other than Security Interests permitted under sub-clause 21.5.3(k) of Clause 21.5 (Negative pledge); and |
(d) | the cash is freely and (except as mentioned in paragraph (a) above) immediately available to be applied in repayment or prepayment of the Facility. |
(a) | certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank; |
(b) | any investment in marketable debt obligations issued or guaranteed by the government of an Acceptable Jurisdiction or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; |
(c) | commercial paper not convertible or exchangeable to any other security: |
(i) | for which a recognised trading market exists; |
(ii) | issued by an issuer incorporated in an Acceptable Jurisdiction; |
(iii) | which matures within one year after the relevant date of calculation; and |
(iv) | which has a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
(d) | sterling bills of exchange eligible for rediscount at the Bank of England (or their dematerialised equivalent) and accepted by an Acceptable Bank; |
(e) | any investment in money market funds which: |
(i) | have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investor Services Limited; |
(ii) | which invest substantially all their assets in securities of the types described in paragraphs (a) to (d) above; and |
(iii) | can be turned into cash on not more than 30 days' notice; or |
(f) | any other debt security approved by the Majority Lenders, |
(a) | adding back Interest Payable; |
(b) | taking no account of any exceptional or extraordinary item; |
(c) | excluding any amount attributable to minority interests; |
(d) | adding back depreciation and amortisation; and |
(e) | taking no account of any revaluation of an asset or any loss or gain over book value arising on the disposal of an asset (otherwise than in the ordinary course of trading) by a member of the Group during that Measurement Period. |
20.2 | Interpretation |
20.2.1 | Except as provided to the contrary in this Agreement, an accounting term used in this Clause is to be construed in accordance with the principles applied in connection with the Original Financial Statements. |
20.2.2 | Any amount in a currency other than the Base Currency is to be taken into account at its Base Currency equivalent calculated on the basis of: |
(a) | the Agent's Spot Rate of Exchange on the day the relevant amount falls to be calculated; or |
(b) | if the amount is to be calculated on the last day of a financial period of the Company, the relevant rates of exchange used by the Company in, or in connection with, its financial statements for that period. |
20.2.3 | No item must be credited or deducted more than once in any calculation under this Clause. |
20.3 | Interest cover |
20.4 | Asset Cover |
21. | GENERAL COVENANTS |
21.1 | General |
21.2 | Authorisations |
21.3 | Compliance with laws |
21.4 | Pari passu ranking |
21.5 | Negative pledge |
21.5.1 | Except as provided below, neither the Company nor any Material Subsidiary may create or allow to exist any Security Interest or Quasi-Security Interest on any of its assets. |
21.5.2 | Except as provided below, neither the Company nor any Material Subsidiary may: |
(a) | sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by the Company or any Material Subsidiary; |
(b) | sell, transfer or otherwise dispose of any of its receivables on recourse terms; |
(c) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
(d) | enter into any other preferential arrangement having a similar effect, |
21.5.3 | Sub-clauses 21.5.1 and 21.5.2 do not apply to: |
(a) | any lien arising by operation of law and in the ordinary course of trading; |
(b) | any netting or set-off arrangement entered into by the Company in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances (including a Multi-Account Overdraft) of members of the Group; |
(c) | any Security Interest or Quasi-Security Interest created under or in connection with or arising out of the Balancing and Settlement Code or any transactions or arrangements entered into in connection with the management of risks relating thereto; |
(d) | in respect of overdue amounts which have not been overdue for more than 30 days and/or are being contested in good faith, liens arising solely by operation of law or by order of a court or tribunal (or by an agreement of similar effect) and/or in the ordinary course of day to day business or operations; |
(e) | any Security Interest or Quasi-Security Interest arising out of title retention provisions in a supplier's standard conditions of supply of goods acquired in the ordinary course of business or operations; |
(f) | any Security Interest or Quasi-Security Interest created on any asset acquired after the date of this Agreement for the sole purpose of financing or re-financing that acquisition and securing a principal, capital or |
(g) | any Security Interest or Quasi-Security Interest outstanding on or over any asset acquired after the date of this Agreement and in existence at the date of such acquisition, provided that the Security Interest or Quasi-Security Interest is removed or discharged within 6 months of the date of acquisition of such asset; |
(h) | any Security Interest or Quasi-Security Interest created or outstanding on or over any asset of any company which becomes a Material Subsidiary of the Company after the date of this Agreement where such Security Interest or Quasi-Security Interest is created prior to the date on which such company becomes a Material Subsidiary of the Company and is not created or increased in contemplation of such company being acquired and/or becoming a Material Subsidiary of the Company and the Security Interest or Quasi-Security Interest is removed or discharged within 6 months of the date of such company becoming a Material Subsidiary of the Company; |
(i) | any Quasi-Security Interest arising as a result of a disposal which is a disposal permitted under sub-clause 21.6.2; |
(j) | any netting arrangements under any swap or other hedging transaction which is on standard market terms; |
(k) | any Security Interest or Quasi-Security Interest over bank accounts of the Company in favour of the account holding bank with whom it maintains a banking relationship in the ordinary course of trade and granted as part of that bank's standard terms and conditions; |
(l) | any Security Interest or Quasi-Security Interest created or outstanding with the prior approval of the Majority Lenders; and |
(m) | any Security Interest or Quasi-Security Interest created or outstanding on or over assets of the Company or any of its Material Subsidiaries provided that the aggregate outstanding principal or nominal amount secured by all Security Interests and Quasi-Security Interest created or outstanding under this exception on or over such assets shall not at any time exceed £25,000,000 or its equivalent. |
21.6 | Disposals |
21.6.1 | Except as provided below, no member of the Group may, either in a single transaction or in a series of transactions and whether related or not, dispose of all or any part of its assets (other than cash) where the higher of the market value and the net consideration receivable (when aggregated with the higher of the market value and the net consideration receivable from any previous disposal by |
21.6.2 | Sub-clause 21.6.1 does not apply to: |
(a) | any disposal made in the ordinary course of day to day business or operations of the disposing entity (including, without limitation, disposals of subsidiaries or lines of business, provided that this shall not include a disposal of the core electricity distribution business); |
(b) | disposals on normal commercial terms of obsolete assets or assets no longer required for the purpose of the relevant Person's business or operations; |
(c) | any realisation of investments acquired, purchased or made by the temporary application of funds not immediately required in the relevant Person's business or operations; |
(d) | the exchange of assets for other assets of a similar or superior nature and value, or the sale of assets on normal commercial terms for cash which is payable in full on the completion of the sale and is to be, and is, applied in or towards the purchase of similar assets within 12 months of that disposal (or, if contractually committed to be used within 12 months, are actually used within 18 months of that disposal); |
(e) | the disposal of assets by one wholly-owned Subsidiary of the Company to another or (if the consideration for the disposal does not exceed a normal commercial consideration) to the Company by one of its Subsidiaries; |
(f) | disposals in connection with sale-and-leaseback or sale and repurchase transactions or any other form of "off balance sheet" financing, provided that the aggregate book value (in the books of the disposing party) of all assets the subject of all such disposals made during the period commencing on the date of this Agreement and ending on the date when no amount remains to be lent or remains payable under this Agreement shall not exceed £50,000,000; |
(g) | any disposal which the Majority Lenders shall have agreed shall not be taken into account; |
(h) | arising as a result of any Security Interest or Quasi-Security Interest permitted under sub-clause 21.5.3 above; |
(i) | the application or disposal of cash not otherwise prohibited under the Finance Documents; |
(j) | any disposal by a member of Group compulsorily required by law or regulation having the force of law or any order of any government entity |
(i) | such disposal is made for fair market value; and |
(ii) | such disposal does not have a Material Adverse Effect. |
21.7 | Environmental matters |
21.7.1 | The Company will and will ensure that its Material Subsidiaries will comply with all applicable Environmental Law and other regulations, orders or other law applicable to the conduct of the business of the supply or distribution of electricity, in each case, where failure to do so would have a Material Adverse Effect. |
21.7.2 | The Company will, promptly upon becoming aware of the same, inform the Facility Agent in writing of: |
(a) | any Environmental Claim against any member of the Group which is current, pending or threatened; and |
(b) | any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group, |
21.8 | Insurance |
21.9 | Merger |
21.10 | Change of business |
21.11 | Acquisitions |
21.11.1 | Except as provided below, neither the Company nor any Material Subsidiary may acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them). |
21.11.2 | Provided that no Event of Default is outstanding on the date of the acquisition or would occur as a result of the acquisition, sub-clause 21.11.1 does not apply to: |
(a) | an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group as permitted under sub-clause 21.6.2 of Clause 21.6 (Disposals) above; |
(b) | an acquisition where the consideration (including associated costs and expenses) for the acquisition (when aggregated with the consideration (including associated costs and expenses) for any other acquisition permitted under this paragraph) during the term of this Agreement does not exceed 2.5% of the sum of the issued share capital, share premium and consolidated reserves (including retained earnings) of the Company, as shown by its most recent audited consolidated financial statements; and |
(c) | any acquisition which the Majority Lenders shall have consented to in writing. |
21.12 | Prohibition on the Debt Purchase Transactions of the Group |
21.13 | Prohibition on Subsidiary Financial Indebtedness |
21.14 | Arm's length transactions |
21.15 | Pensions |
21.15.1 | The Company shall ensure that no action or omission is taken by any member of the Group in relation to a pension scheme which has or is reasonably likely |
21.15.2 | Except for in respect of WPD South Wales Plc of the Western Power Utilities Pension Scheme and the Infralec 92 Scheme, the WPD Group of the Electricity Supply Pension Scheme (and in the case of merger, the CN Group of the ESPS) the Company shall ensure that no member of the Group is an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993) or "connected" with or an "associate" of (as those terms are used in sections 38 or 43 of the Pensions Act 2004) such an employer. |
21.15.3 | The Company shall promptly notify the Facility Agent of any material change in the rate of contributions payable to any of the pension schemes mentioned in sub-clause 21.15.2 above paid or required (by law or otherwise). |
21.15.4 | The Company shall immediately notify the Facility Agent of any investigation or proposed investigation by the Pensions Regulator which may lead to the issue of a Financial Support Direction or a Contribution Notice to any member of the Group. |
21.15.5 | The Company shall immediately notify the Facility Agent if it receives a Financial Support Direction or a Contribution Notice from the Pensions Regulator. |
21.16 | Licence |
21.16.1 | comply with the terms of the Licence in all material respects; |
21.16.2 | without prejudice to the generality of sub-clause 21.16.1 above, comply with the ring fencing provisions of the Licence in all respects; and |
21.16.3 | not take any action or make any omission which is reasonably likely to result in the revocation or termination of the Licence. |
21.17 | Investment Grade Rating |
21.18 | Sanctions |
21.18.1 | Neither the Company, nor any other member of the Group, shall be the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (the "OFAC"), the United Nations Security Council (the "UNSC"), the European Union, Her Majesty’s Treasury (the |
21.18.2 | The Company undertakes that no member of the Group will, directly or indirectly, use the proceeds of the transaction, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity (the "Person"), to fund any activities of or business with any Person, or in Syria, Cuba, Iran, North Korea, Sudan or in any other country or territory, that, at the time of such funding, is the subject of country-wide or territory-wide Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. |
21.18.3 | The Company shall ensure that the source of any funds for discharging its obligations under this Agreement is not obtained from any designated target of any Sanctions or any of Syria, Cuba, Iran, North Korea, Sudan or any other country or territory, that, at the time of such payment, is the subject of country-wide or territory-wide Sanctions. |
21.19 | Anti-Corruption |
21.19.1 | The Company shall not (and shall ensure that no other member of the Group will) use the proceeds, or cause or permit the proceeds of any Loan to be used, directly or indirectly, in any way that would be in breach of applicable anti‑corruption laws. |
21.19.2 | The Company shall (and shall ensure that each other member of the Group will): |
(a) | conduct its businesses in compliance with applicable anti-corruption laws; and |
(b) | maintain policies and procedures designed to promote and achieve compliance with such laws. |
22. | DEFAULT |
22.1 | Events of Default |
22.2 | Non-payment |
(a) | administrative or technical error; or |
(b) | a Disruption Event, |
22.3 | Breach of other obligations |
22.3.1 | The Company does not perform or comply with its obligations under Clause 20 (Financial Covenants), Clause 21.5 (Negative pledge), Clause 21.6 (Disposals) or Clause 21.11 (Acquisitions). |
22.3.2 | The Company does not perform or comply with any of its other obligations under any Finance Document in any material respect or any representation or warranty by the Company in this Agreement or in any document delivered under it is or proves to have been incorrect when made or deemed repeated, unless the non‑compliance or circumstances giving rise to the misrepresentation, as the case may be, is capable of remedy and is not remedied within 20 Business Days of the earlier of the Facility Agent giving notice requiring the same to be remedied and the Company becoming aware of such non‑compliance or misrepresentation, as the case may be. |
22.4 | Cross-default |
22.4.1 | Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period. |
22.4.2 | Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). |
22.4.3 | Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of that member of the Group as a result of an event of default (however described). |
22.4.4 | Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described). |
22.4.5 | No Event of Default will occur under this Clause 22.4 unless and until the aggregate amount of such Financial Indebtedness falling within sub-clauses 22.4.1 to 22.4.4 above is more than £20,000,000 or its equivalent in any other currency or currencies. |
22.5 | Insolvency |
22.5.1 | Any of the following occurs in respect of the Company: |
(a) | it is unable to pay its debts generally as they fall due or it is deemed by a court of competent jurisdiction to be insolvent; |
(b) | it suspends making payments on all or any class of its debts or publicly announces an intention to do so; |
(c) | by reason of actual or anticipated financial difficulties, it begins negotiations with all or any class of its creditors for the general rescheduling of its indebtedness; or |
(d) | a moratorium is declared in respect of any of its indebtedness. |
22.5.2 | If a moratorium occurs in respect of the Company, the ending of the moratorium will not remedy any Event of Default caused by the moratorium. |
22.6 | Insolvency proceedings |
22.6.1 | Except as provided below, any of the following occurs in respect of the Company: |
(a) | a suspension of payments, a moratorium of any indebtedness or a reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise); |
(b) | any person presents a petition for its winding-up, administration or dissolution; |
(c) | an order for its winding-up, administration or dissolution is made; |
(d) | any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; |
(e) | its directors or other officers request the appointment of a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer; |
(f) | enforcement of any Security over any of its assets; or |
(g) | any other analogous step or procedure is taken in any jurisdiction. |
22.6.2 | Sub-clause 22.6.1 does not apply to: |
(a) | a petition for winding-up presented by a creditor which is being actively contested in good faith and with due diligence and with a reasonable prospect of success; or |
(b) | a voluntary solvent winding-up, amalgamation, reconstruction or reorganisation or otherwise part of a solvent scheme of arrangement, in each case which is on terms approved by the Majority Lenders. |
22.7 | Creditors' process |
22.8 | Licence |
22.8.1 | notice is given to revoke or terminate the Licence unless such termination is being contested in good faith and such notice is revoked or cancelled within 14 days of notice being given; or |
22.8.2 | the Licence is revoked, |
22.9 | Balancing and Settlement Code |
22.9.1 | The Company ceases to be a party to the Balancing and Settlement Code Framework Agreement other than in circumstances where the Company is able to carry on its distribution business; or |
22.9.2 | the Company breaches the Balancing and Settlement Code and such breach has or is reasonably likely to have a Material Adverse Effect. |
22.10 | Unlawfulness and invalidity |
22.10.1 | It is or becomes unlawful for the Company to perform any of its obligations under the Finance Documents in any material respect. |
22.10.2 | Any obligation or obligations of the Company under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
22.11 | Cessation of business |
22.12 | Repudiation and rescission of agreements |
22.13 | Ownership of other Group companies |
(a) | which is engaged in the core electricity distribution business; or |
(b) | in respect of which it has any actual or contingent financial obligations other than as a result of a solvent liquidation or reorganisation so long as any payments or assets distributed as a result of such solvent liquidation or reorganisation are distributed to other members of the Group. |
22.14 | Material Adverse Effect |
22.15 | Acceleration |
22.15.1 | cancel the Total Commitments and/or Ancillary Commitments; and/or |
22.15.2 | declare that all or part of any amounts outstanding under the Finance Documents are: |
(a) | immediately due and payable; and/or |
(b) | payable on demand by the Facility Agent acting on the instructions of the Majority Lenders; and/or |
22.15.3 | declare that full cash cover in respect of all or part of the amounts outstanding under the Ancillary Facilities is immediately due and payable whereupon it shall become immediately due and payable or payable on demand at which time it shall become payable on demand by the Facility Agent on the instructions of the Majority Lenders. |
23. | THE ADMINISTRATIVE PARTIES |
23.1 | Appointment and duties of the Facility Agent |
23.1.1 | Each Finance Party (other than the Facility Agent) irrevocably appoints the Facility Agent to act as its agent under the Finance Documents. |
23.1.2 | Each Finance Party irrevocably authorises the Facility Agent to: |
(a) | perform the duties and to exercise the rights, powers and discretions that are specifically given to it under the Finance Documents, together with any other incidental rights, powers and discretions; and |
(b) | execute each Finance Document expressed to be executed by the Facility Agent. |
23.1.3 | The Facility Agent has only those duties which are expressly specified in the Finance Documents. Those duties are solely of a mechanical and administrative nature. |
23.1.4 | The Facility Agent shall provide to the Company within three Business Days of a request by the Company (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Facility Agent to that Lender under the Finance Documents. |
23.2 | Role of the Arrangers |
23.3 | No fiduciary duties |
23.4 | Individual position of an Administrative Party |
23.4.1 | If it is also a Lender, each Administrative Party has the same rights and powers under the Finance Documents as any other Lender and may exercise those rights and powers as though it were not an Administrative Party. |
23.4.2 | Each Administrative Party and each Ancillary Lender may: |
(a) | carry on any business with the Company or its related entities (including acting as an agent or a trustee for any other financing); and |
(b) | retain any profits or remuneration it receives under the Finance Documents or in relation to any other business it carries on with the Company or its related entities. |
23.5 | Reliance |
23.5.1 | rely on any notice or document believed by it to be genuine and correct and to have been signed by, or with the authority of, the proper person; |
23.5.2 | rely on any statement made by any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify; |
23.5.3 | engage, pay for and rely on professional advisers selected by it (including those representing a Party other than the Facility Agent); and |
23.5.4 | act under the Finance Documents through its personnel and agents. |
23.6 | Majority Lenders' instructions |
23.6.1 | The Facility Agent is fully protected if it acts on the instructions of the Majority Lenders in the exercise of any right, power or discretion or any matter not expressly provided for in the Finance Documents. Any such instructions given by the Majority Lenders will be binding on all the Lenders. In the absence of instructions, the Facility Agent may act as it considers to be in the best interests of all the Lenders. |
23.6.2 | The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings in connection with any Finance Document. |
23.6.3 | The Facility Agent may require the receipt of security satisfactory to it, whether by way of payment in advance or otherwise, against any liability or loss which it may incur in complying with the instructions of the Majority Lenders. |
23.7 | Responsibility |
23.7.1 | No Administrative Party and no Ancillary Lender is responsible to any other Finance Party for the adequacy, accuracy or completeness of: |
(a) | any Finance Document or any other document; or |
(b) | any statement or information (whether written or oral) made in or supplied in connection with any Finance Document. |
23.7.2 | Without affecting the responsibility of the Company for information supplied by it or on its behalf in connection with any Finance Document, each Lender and each Ancillary Lender confirms that it: |
(a) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Company and its related entities and the nature and extent of any recourse against any Party or its assets); and |
(b) | has not relied exclusively on any information provided to it by any Administrative Party in connection with any Finance Document. |
(a) | Nothing in this Agreement will oblige the Facility Agent to satisfy any know your customer requirement in relation to the identity of any person on behalf of any Finance Party. |
(b) | Each Finance Party confirms to the Facility Agent that it is solely responsible for any know your customer requirements it is required to carry out and that it may not rely on any statement in relation to those requirements made by any other person. |
23.8 | Exclusion of liability |
23.8.1 | Neither the Facility Agent nor any Ancillary Lender is liable or responsible to any other Finance Party for any action taken or not taken by it in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct. |
23.8.2 | The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent, if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose. |
23.8.3 | No Party (other than the Facility Agent or the Ancillary Lender) may take any proceedings against any officer, employee or agent of the Facility Agent or any Ancillary Lender in respect of any claim it might have against the Facility Agent or any Ancillary Lender or in respect of any act or omission of any kind by that officer, employee or agent in connection with any Finance Document. Any officer, employee or agent of the Facility Agent or any Ancillary Lender may rely on this sub-clause and enforce its terms under the Contracts (Rights of Third Parties) Act 1999. |
23.9 | Default |
23.9.1 | The Facility Agent is not obliged to monitor or enquire whether a Default has occurred. The Facility Agent is not deemed to have knowledge of the occurrence of a Default. |
23.9.2 | If the Facility Agent: |
(a) | receives notice from a Party referring to this Agreement, describing a Default and stating that the event is a Default; or |
(b) | is aware of the non-payment of any principal or interest or any fee payable to a Lender under this Agreement, |
23.10 | Information |
23.10.1 | The Facility Agent must promptly forward to the person concerned the original or a copy of any document which is delivered to the Facility Agent by a Party for that person. |
23.10.2 | Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
23.10.3 | Except as provided above, the Facility Agent has no duty: |
(a) | either initially or on a continuing basis to provide any Lender with any credit or other information concerning the risks arising under or in connection with the Finance Documents (including any information relating to the financial condition or affairs of the Company or its related entities or the nature or extent of recourse against any Party or its assets) whether coming into its possession before, on or after the date of this Agreement; or |
(b) | unless specifically requested to do so by a Lender in accordance with a Finance Document, to request any certificate or other document from the Company. |
23.10.4 | In acting as the Facility Agent, the agency division of the Facility Agent is treated as a separate entity from its other divisions and departments. Any information acquired by the Facility Agent which, in its opinion, is acquired by it otherwise than in its capacity as the Facility Agent may be treated as confidential by the Facility Agent and will not be treated as information possessed by the Facility Agent in its capacity as such. |
23.10.5 | The Facility Agent is not obliged to disclose to any person any confidential information supplied to it by a member of the Group solely for the purpose of evaluating whether any waiver or amendment is required to any term of the Finance Documents. |
23.10.6 | The Company irrevocably authorises the Facility Agent to disclose to the other Finance Parties any information which, in its opinion, is received by it in its capacity as the Facility Agent. |
23.10.7 | Without prejudice to the generality of the foregoing, the Facility Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Company and shall disclose the same upon the written request of the Company or the Majority Lenders. |
23.11 | Indemnities |
23.11.1 | Without limiting the liability of the Company under the Finance Documents, each Lender must indemnify the Facility Agent for that Lender's Pro Rata Share of any loss or liability incurred by the Facility Agent in acting as the Facility Agent, except to the extent that the loss or liability is caused by the Facility |
23.11.2 | The Facility Agent may deduct from any amount received by it for a Lender any amount due to the Facility Agent from that Lender under a Finance Document but unpaid. |
23.11.3 | The Company must indemnify the Facility Agent against any loss or liability properly incurred by the Facility Agent as a result of: |
(a) | investigating any event which the Facility Agent reasonably believes to be a Default; or |
(b) | acting or relying on any notice which the Facility Agent reasonably believes to be genuine, correct and appropriately authorised. |
23.12 | Compliance |
23.13 | Resignation of the Facility Agent |
23.13.1 | The Facility Agent may resign and appoint any of its Affiliates as successor Facility Agent by giving notice to the Lenders and the Company. |
23.13.2 | Alternatively, the Facility Agent may resign by giving notice to the Lenders and the Company, in which case the Majority Lenders may appoint a successor Facility Agent. |
23.13.3 | If no successor Facility Agent has been appointed under sub-clause 23.13.2 above within 30 days after notice of resignation was given, the Facility Agent may appoint a successor Facility Agent. |
23.13.4 | The person(s) appointing a successor Facility Agent must, if practicable, consult with the Company prior to the appointment. Any successor Facility Agent must have an office in the U.K. |
23.13.5 | The resignation of the Facility Agent and the appointment of any successor Facility Agent will both become effective only when the successor Facility Agent notifies all the Parties that it accepts its appointment. On giving the notification, the successor Facility Agent will succeed to the position of the Facility Agent and the term "Facility Agent" will mean the successor Facility Agent. |
23.13.6 | The retiring Facility Agent must, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as the Facility Agent under the Finance Documents. |
23.13.7 | Upon its resignation becoming effective, this Clause will continue to benefit the retiring Facility Agent in respect of any action taken or not taken by it in connection with the Finance Documents while it was the Facility Agent, and, subject to sub-clause 23.13.6 above, it will have no further obligations under any Finance Document. |
23.14 | Replacement of the Facility Agent |
23.14.1 | After consultation with the Company, the Majority Lenders may, by giving 30 days' notice to the Facility Agent (or, at any time the Facility Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Facility Agent by appointing a successor Facility Agent (acting through an office in the United Kingdom). |
23.14.2 | The retiring Facility Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. |
23.14.3 | The replacement of the Facility Agent and the appointment of the successor Facility Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Facility Agent. As from this date, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 23 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date). |
23.14.4 | Any successor Facility Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
23.15 | Relationship with Lenders |
23.15.1 | Subject to Clause 29.9 (Pro rata interest settlement), the Facility Agent may treat each Lender as a Lender, entitled to payments under this Agreement and as acting through its Facility Office(s) until it has received not less than five Business Days' prior notice from that Lender to the contrary. |
23.15.2 | The Facility Agent may at any time, and must if requested to do so by the Majority Lenders, convene a meeting of the Lenders. |
23.15.3 | The Facility Agent must keep a register of all the Parties and supply any other Party with a copy of the register on request. The register will include each Lender's Facility Office(s) and contact details for the purposes of this Agreement. |
23.16 | Facility Agent's management time |
23.17 | Notice period |
23.18 | Subordination Deed |
24. | EVIDENCE AND CALCULATIONS |
24.1 | Accounts |
24.2 | Certificates and determinations |
24.3 | Calculations |
25. | FEES |
25.1 | Agency fee |
25.2 | Arrangement and participation fees |
25.3 | Co-ordination fee |
25.4 | Commitment fee |
25.4.1 | The Company must pay a commitment fee computed at the rate of 35 per cent. of the applicable Margin on the undrawn, uncancelled amount of each Lender's Commitment for the Availability Period calculated from the date of this Agreement. |
25.4.2 | The commitment fee is payable quarterly in arrears during the Availability Period and on the last day of the Availability Period. Accrued commitment fee is also payable to the Facility Agent for a Lender on the date its Commitment is cancelled in full. |
25.4.3 | No commitment fee is payable to the Facility Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender. |
25.5 | Utilisation fee |
25.5.1 | The Company must pay to the Facility Agent for each Lender a utilisation fee computed at the rate of 0.20 per cent. per annum on the aggregate principal amount of the Loans for each day on which the aggregate Base Currency Amount of all Loans exceeds 33.3 per cent. of the Total Commitments. |
25.5.2 | The Company must pay to the Facility Agent for each Lender a utilisation fee computed at the rate of 0.40 per cent. per annum on the aggregate principal amount of the Loans for each day on which the Base Currency Amount of all Loans exceeds 66.6 per cent. of the Total Commitments. For the avoidance of doubt, the fee described in sub-clause 25.5.1 above is not payable in respect of any day for which the fee described in this sub-clause 25.5.2 is payable. |
25.5.3 | Utilisation fee is payable on the amount of each Lender's share in the Loans. |
25.5.4 | Accrued utilisation fee is payable quarterly in arrears. Accrued utilisation fee is also payable to the Facility Agent for a Lender on the date its Commitment is cancelled in full. |
25.6 | Interest, commission and fees on Ancillary Facilities |
26. | INDEMNITIES AND BREAK COSTS |
26.1 | Currency indemnity |
26.1.1 | The Company must, as an independent obligation, indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of: |
(a) | that Finance Party receiving an amount in respect of the Company's liability under the Finance Documents; or |
(b) | that liability being converted into a claim, proof, judgment or order, |
26.1.2 | Unless otherwise required by law, the Company waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable. |
26.2 | Other indemnities |
26.2.1 | the occurrence of any Event of Default; |
26.2.2 | (other than by reason of negligence or default by a Finance Party) a Loan not being made after a Request has been delivered for that Loan; or |
26.2.3 | the receipt or recovery by any party (or the Facility Agent on its behalf) of all or any part of a Loan or overdue sum due from the Company otherwise than on the Final Maturity Date or Maturity Date of that Loan or, in the case of an overdue sum, the last day of an interest period relating to that overdue sum, as the case may be or a Loan or any part thereof not being prepaid in accordance with a notice of prepayment. |
26.3 | Break Costs |
26.3.1 | The Company must pay to each Lender its Break Costs within three Business Days of demand. |
26.3.2 | Break Costs are the amount (if any) determined by the relevant Lender by which: |
(a) | the interest (excluding Margin) which that Lender would have received for the period from the date of receipt of any part of its share in a Loan or overdue amount to the last day of the applicable Term for that Loan or overdue amount if the principal or overdue amount received had been paid on the last day of that Term; |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Term. |
26.3.3 | Each Lender must supply to the Facility Agent for the Company details of the amount of any Break Costs claimed by it under this Clause. |
27. | EXPENSES |
27.1 | Initial costs |
27.2 | Subsequent costs |
27.2.1 | the negotiation, preparation, printing and execution of any Finance Document (other than a Transfer Certificate or Increase Confirmation) executed after the date of this Agreement; and |
27.2.2 | any amendment, waiver or consent requested by or on behalf of the Company or specifically allowed by this Agreement. |
27.3 | Enforcement costs |
28. | AMENDMENTS AND WAIVERS |
28.1 | Procedure |
28.1.1 | Except as provided in this Clause 28, any term of the Finance Documents (other than the Fee Letters) may be amended or waived with the agreement of the Company and the Majority Lenders. The Facility Agent may effect, on behalf of any Finance Party, an amendment or waiver allowed under this Clause. |
28.1.2 | The Facility Agent must promptly notify the other Parties of any amendment or waiver effected by it under sub-clause 28.1.1 above. Any such amendment or waiver is binding on all the Parties. |
28.2 | Exceptions |
28.2.1 | An amendment or waiver which relates to: |
(a) | the definition of Majority Lenders in Clause 1.1 (Definitions); |
(b) | Clause 2.3 (Nature of a Finance Party's rights and obligations); |
(c) | an extension of the date of payment of any amount to a Lender under the Finance Documents; |
(d) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fee or other amount payable to a Lender under the Finance Documents; |
(e) | an increase in, or an extension of, a Commitment or the Total Commitments; |
(f) | a term of a Finance Document which expressly requires the consent of each Lender; |
(g) | the right of a Lender to assign or transfer its rights or obligations under the Finance Documents; |
(h) | Clause 10.1 (Mandatory prepayment – illegality) or Clause 10.2 (Mandatory prepayment – change of control); or |
(i) | this Clause, |
28.2.2 | An amendment or waiver which relates to the rights or obligations of an Administrative Party or an Ancillary Lender may only be made with the consent of that Administrative Party or Ancillary Lender. |
28.3 | Disenfranchisement of Defaulting Lenders |
28.3.1 | For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender's Commitments will be reduced by the amount of its Available Commitments. |
28.3.2 | For the purposes of this Clause 28.3, the Facility Agent may assume that the following Lenders are Defaulting Lenders: |
(a) | any Lender which has notified the Facility Agent that it has become a Defaulting Lender; |
(b) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of "Defaulting Lender" has occurred where, in the case of the events or circumstances referred to in paragraph (a), none of the exceptions to that paragraph apply, |
28.4 | Replacement of a Defaulting Lender |
28.4.1 | The Company may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days' prior written notice to the Facility Agent and such Lender: |
(a) | replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 29 (Changes to the Parties) all (and not part only) of its rights and obligations under this Agreement; or |
(b) | require such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 29 (Changes to the Parties) all (and not part only) of the undrawn Commitment of the Lender. |
28.4.2 | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions: |
(a) | the Company shall have no right to replace the Facility Agent; |
(b) | neither the Facility Agent nor the Defaulting Lender shall have any obligation to the Company to find a Replacement Lender; |
(c) | the transfer must take place no later than 14 days after the notice referred to in sub-clause 28.4.1 above; |
(d) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and |
(e) | the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to sub-clause 28.4.1 above once it is satisfied that it has complied with all necessary "know your customer" or other similar |
28.5 | Excluded Commitments |
28.6 | Change of currency |
28.7 | Waivers and remedies cumulative |
28.7.1 | may be exercised as often as necessary; |
28.7.2 | are cumulative and not exclusive of its rights under the general law; and |
28.7.3 | may be waived only in writing and specifically. |
29. | CHANGES TO THE PARTIES |
29.1 | Assignments and transfers by the Company |
29.2 | Assignments and transfers by Lenders |
29.2.1 | A Lender (the Existing Lender) may, subject to the following provisions of this Clause 29, at any time assign or transfer (including by way of novation) any of its rights and obligations under this Agreement to any bank, financial institution or trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the New Lender). |
29.2.2 | Unless the Company and the Facility Agent otherwise agree, an assignment or transfer of part of a Commitment or rights and obligations under this Agreement by the Existing Lender must be in a minimum amount of £5,000,000. |
29.2.3 | An Existing Lender must consult with the Company for no more than five Business Days before it may make an assignment or transfer unless the New Lender is another Lender or an Affiliate of a Lender or an Event of Default has occurred and is outstanding. |
29.2.4 | The Facility Agent is not obliged to accept an assignment or execute a Transfer Certificate until it has completed all know your customer requirements to its satisfaction. The Facility Agent must promptly notify the Existing Lender and the New Lender if there are any such requirements. |
29.2.5 | An assignment of rights or a transfer of rights and obligations will be effective only if either: |
(a) | the obligations are novated in accordance with the following provisions of this Clause 29; or |
(b) | the New Lender confirms to the Facility Agent and the Company in form and substance satisfactory to the Facility Agent that it is bound by the terms of this Agreement as a Lender. On the assignment or transfer becoming effective in this manner the Existing Lender will be released from its rights and obligations under this Agreement to the extent that they are assigned or transferred to the New Lender. |
29.2.6 | Unless the Facility Agent otherwise agrees, the New Lender must pay to the Facility Agent for its own account, on or before the date any assignment or transfer occurs, a fee of £1,750. |
29.2.7 | Any reference in this Agreement to a Lender includes a New Lender but excludes a Lender if no amount is or may be owed to or by it under this Agreement. |
29.3 | Procedure for transfer by way of novations |
29.3.1 | In this Clause: |
(a) | the proposed Transfer Date specified in that Transfer Certificate; and |
(b) | the date on which the Facility Agent executes that Transfer Certificate. |
29.3.2 | A novation is effected if: |
(a) | the Existing Lender and the New Lender deliver to the Facility Agent a duly completed Transfer Certificate; and |
(b) | the Facility Agent executes it. |
29.3.3 | Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to execute any duly completed Transfer Certificate on its behalf. |
29.3.4 | 29.3.4 Subject to Clause 29.9 (Pro rata interest settlement), on the Transfer Date: |
(a) | the New Lender will assume the rights and obligations of the Existing Lender expressed to be the subject of the novation in the Transfer Certificate in substitution for the Existing Lender; and |
(b) | the Existing Lender will be released from those obligations and cease to have those rights. |
29.4 | Limitation of responsibility of Existing Lender |
29.4.1 | Unless expressly agreed to the contrary, an Existing Lender is not responsible to a New Lender for the legality, validity, adequacy, accuracy, completeness or performance of: |
(a) | any Finance Document or any other document; or |
(b) | any statement or information (whether written or oral) made in or supplied in connection with any Finance Document, |
29.4.2 | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(a) | has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and affairs of the Company and its related entities and the nature and extent of any recourse against any Party or its assets) in connection with its participation in this Agreement; and |
(b) | has not relied exclusively on any information supplied to it by the Existing Lender in connection with any Finance Document. |
29.4.3 | Nothing in any Finance Document requires an Existing Lender to: |
(a) | accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause; or |
(b) | support any losses incurred by the New Lender by reason of the non-performance by the Company of its obligations under any Finance Document or otherwise. |
29.5 | Costs resulting from change of Lender or Facility Office |
29.5.1 | a Lender assigns or transfers any of its rights and obligations under the Finance Documents or changes its Facility Office; and |
29.5.2 | as a result of circumstances existing at the date the assignment, transfer or change occurs, the Company would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased costs), |
29.6 | Changes to the Reference Banks |
29.6.1 | If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent must (in consultation with the Company) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank. |
29.6.2 | If a Reference Bank ceases to have a London office or novates or assigns all its rights and obligations under this Agreement or if any Commitments of any Reference Bank are cancelled or if Loans it has advanced are prepaid it shall be replaced as a Reference Bank by such other Lender or an Affiliate of a Lender with an office in London as the Facility Agent (after consultation with the Company) shall designate by notice to the Company and the Lenders. |
29.7 | Copy of Transfer Certificate or Increase Confirmation to Company |
29.8 | Security over Lenders' rights |
(a) | any charge, assignment or other security to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other security for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by the Company or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
29.9 | Pro rata interest settlement |
29.9.1 | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Term (or, if the Term is longer than six months, on the next of the dates which falls at six monthly intervals after the first day of that Term); and |
29.9.2 | the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt: |
(i) | when the Accrued Amounts become payable, those Accrued Amounts will be payable for the account of the Existing Lender; and |
(ii) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 29.9, have been payable to it on that date, but after deduction of the Accrued Amounts. |
30. | CONFIDENTIALITY AND DISCLOSURE OF INFORMATION |
30.1 | Confidential Information |
30.2 | Disclosure of Confidential Information |
30.2.1 | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this sub-clause 30.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
30.2.2 | to any person: |
(a) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(b) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or the Company and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(c) | appointed by any Finance Party or by a person to whom sub-clause 30.2.2 (a) or (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf; |
(d) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-clause 30.2.2 (a) or (b) above; |
(e) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
(f) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates security (or may do so) pursuant to Clause 29.8 (Security over Lenders' rights) ; |
(g) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(h) | who is a Party; or |
(i) | with the consent of the Company; |
(i) | in relation to sub-clause 30.2.2 (a), (b) and (c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; |
(ii) | in relation to sub-clause 30.2.2 (d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; |
(iii) | in relation to sub-clause 30.2.2 (e), (f) and (g) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; |
30.2.3 | to any person appointed by that Finance Party or by a person to whom sub-clause 30.2.2 (a) or (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this sub-clause 30.2.3 if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Company and the relevant Finance Party; |
30.2.4 | to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to |
30.3 | Disclosure to numbering service providers |
30.3.1 | Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or the Company the following information: |
(a) | name of the Company; |
(b) | country of domicile of the Company; |
(c) | place of incorporation of the Company; |
(d) | date of this Agreement; |
(e) | the names of the Facility Agent and the Arranger; |
(f) | date of each amendment and restatement of this Agreement; |
(g) | amount of Total Commitments; |
(h) | currencies of the Facility; |
(i) | type of Facility; |
(j) | ranking of Facility; |
(k) | Final Maturity Date for the Facility; |
(l) | changes to any of the information previously supplied pursuant to paragraphs (a) to (k) above; and |
(m) | such other information agreed between such Finance Party and the Company, |
30.3.2 | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or the Company by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
30.3.3 | The Company represents that none of the information set out in paragraphs (a) to (m) of sub-clause 30.3.1 above is, nor will at any time be, unpublished price-sensitive information. |
30.3.4 | The Facility Agent shall notify the Company and the other Finance Parties of: |
(a) | the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or the Company; and |
(b) | the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or the Company by such numbering service provider. |
31. | CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS |
31.1 | Confidentiality and disclosure |
31.1.1 | The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by sub-clause 31.1.2, 31.1.3 and 31.1.4 below. |
31.1.2 | The Facility Agent may disclose: |
(a) | any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Company pursuant to Clause 11.4 (Notification of rates of interest); and |
(b) | any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a Confidentiality Undertaking. |
31.1.3 | The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to: |
(a) | any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors and partners if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it; |
(b) | any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; |
(c) | any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and |
(d) | any person with the consent of the relevant Lender or Reference Bank, as the case may be. |
31.1.4 | The Facility Agent's obligations in this Clause 31 (Confidentiality of Funding Rates and Reference Bank Quotations) relating to Reference Bank Quotations |
31.2 | Other obligations |
31.2.1 | The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose. |
31.2.2 | The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be: |
(a) | of the circumstances of any disclosure made pursuant to paragraph (b) of sub-clause 31.1.3 above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(b) | upon becoming aware that any information has been disclosed in breach of this Clause 31 (Confidentiality of Funding Rates and Reference Bank Quotations). |
32. | SET-OFF |
32.1.1 | A Finance Party may set off any matured obligation owed to it by the Company under the Finance Documents (to the extent beneficially owned by that Finance Party) against any obligation (whether or not matured) owed by that Finance Party to the Company, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. |
32.1.2 | Any credit balances taken into account by an Ancillary Lender when operating a net limit in respect of any overdraft under an Ancillary Facility shall on enforcement of the Finance Documents be applied first in reduction of the overdraft provided under that Ancillary Facility in accordance with its terms. |
33. | PRO RATA SHARING |
33.1 | Redistribution |
33.1.1 | If any amount owing by the Company under this Agreement to a Lender (the "recovering Lender") is discharged by payment, set-off or any other manner other than through the Facility Agent under this Agreement (a "recovery"), then: |
(a) | the recovering Lender must, within three Business Days, supply details of the recovery to the Facility Agent; |
(b) | the Facility Agent must calculate whether the recovery is in excess of the amount which the recovering Lender would have received if the recovery had been received by the Facility Agent under this Agreement; and |
(c) | the recovering Lender must pay to the Facility Agent an amount equal to the excess (the "redistribution"). |
33.2 | Effect of redistribution |
33.2.1 | The Facility Agent must treat a redistribution as if it were a payment by the Company under this Agreement and distribute it among the Lenders, other than the recovering Lender, accordingly. |
33.2.2 | When the Facility Agent makes a distribution under sub-clause 33.2.1 above, the recovering Lender will be subrogated to the rights of the Finance Parties which have shared in that redistribution. |
33.2.3 | If and to the extent that the recovering Lender is not able to rely on any rights of subrogation under sub-clause 33.2.2 above, the Company will owe the recovering Lender a debt which is equal to the redistribution, immediately payable and of the type originally discharged. |
33.2.4 | If: |
(a) | a recovering Lender must subsequently return a recovery, or an amount measured by reference to a recovery, to the Company; and |
(b) | the recovering Lender has paid a redistribution in relation to that recovery, |
33.3 | Exceptions |
33.3.1 | it would not, after the payment, have a valid claim against the Company in the amount of the redistribution; or |
33.3.2 | it would be sharing with another Finance Party any amount which the recovering Lender has received or recovered as a result of legal or arbitration proceedings, where: |
(a) | the recovering Lender notified the Facility Agent of those proceedings; and |
(b) | the other Finance Party had an opportunity to participate in those proceedings but did not do so or did not take separate legal or arbitration proceedings as soon as reasonably practicable after receiving notice of them. |
33.4 | Ancillary Lenders |
33.4.1 | This Clause 32 shall not apply to any receipt or recovery by a Lender in its capacity as an Ancillary Lender at any time prior to service of notice under Clause 22.15 (Acceleration). |
33.4.2 | Following service of notice under Clause 22.15 (Acceleration), this Clause 32 shall apply to all receipts or recoveries by Ancillary Lenders except to the extent that the receipt or recovery represents a reduction from the Permitted Gross Outstandings of a Multi-account Overdraft to or towards an amount equal to its Designated Net Amount. |
34. | SEVERABILITY |
34.1 | If a term of a Finance Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: |
34.1.1 | the legality, validity or enforceability in that jurisdiction of any other term of the Finance Documents; or |
34.1.2 | the legality, validity or enforceability in other jurisdictions of that or any other term of the Finance Documents. |
35. | COUNTERPARTS |
36. | NOTICES |
36.1 | In writing |
36.1.1 | Any communication in connection with a Finance Document must be in writing and, unless otherwise stated, may be given: |
(a) | in person, by post, or fax or any other electronic communication approved by the Facility Agent; or |
(b) | if between the Facility Agent and a Lender and the Facility Agent and the Lender agree, by e-mail or other electronic communication. |
36.1.2 | For the purpose of the Finance Documents, an electronic communication will be treated as being in writing. |
36.1.3 | Unless it is agreed to the contrary, any consent or agreement required under a Finance Document must be given in writing. |
36.2 | Contact details |
36.2.1 | Except as provided below, the contact details of each Party for all communications in connection with the Finance Documents are those notified by that Party for this purpose to the Facility Agent on or before the date it becomes a Party. |
36.2.2 | The contact details of the Company for this purpose are: |
36.2.3 | Any Party may change its contact details by giving five Business Days' notice to the Facility Agent or (in the case of the Facility Agent) to the other Parties. |
36.2.4 | Where a Party nominates a particular department or officer to receive a communication, a communication will not be effective if it fails to specify that department or officer. |
36.3 | Effectiveness |
36.3.1 | Except as provided below, any communication in connection with a Finance Document will be deemed to be given as follows: |
(a) | if delivered in person, at the time of delivery; |
(b) | if posted, five days after being deposited in the post, postage prepaid, in a correctly addressed envelope; and |
(c) | if by fax, when received in legible form. |
36.3.2 | A communication given under sub-clause 36.3.1 above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place. |
36.3.3 | A communication to the Facility Agent will only be effective on actual receipt by it. |
36.4 | The Company |
36.5 | Communication when Facility Agent is Impaired Agent |
37. | LANGUAGE |
37.1.1 | Any notice given in connection with a Finance Document must be in English. |
37.1.2 | Any other document provided in connection with a Finance Document must be: |
(a) | in English; or |
(b) | (unless the Facility Agent otherwise agrees) accompanied by a certified English translation. In this case, the English translation prevails unless the document is a statutory or other official document. |
38. | GOVERNING LAW |
39. | ENFORCEMENT |
39.1 | Jurisdiction |
39.1.1 | The English courts have exclusive jurisdiction to settle any dispute in connection with any Finance Document including a dispute relating to any non-contractual obligation arising out of or in connection with this Agreement. |
39.1.2 | The English courts are the most appropriate and convenient courts to settle any such dispute and the Company waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document. |
39.1.3 | This Clause is for the benefit of the Finance Parties only. To the extent allowed by law, a Finance Party may take: |
(a) | proceedings in any other court; and |
(b) | concurrent proceedings in any number of jurisdictions. |
Name of Original Lender | Commitment | Treaty Passport scheme reference number and jurisdiction of tax residence (if applicable) |
Abbey National Treasury Services plc (trading as Santander Global Banking & Markets) Barclays Bank PLC HSBC Bank plc Lloyds Bank plc Mizuho Bank, Ltd. Royal Bank of Canada The Royal Bank of Scotland plc The Bank of Tokyo-Mitsubishi UFJ, Ltd. | £30,625,000 £30,625,000 £30,625,000 £30,625,000 £30,625,000 £30,625,000 £30,625,000 £30,625,000 | |
Total | £245,000,000 |
1. | We refer to the Agreement. This is a Request. Terms defined in the Agreement have the same meaning in this Request unless given a different meaning in this Request. |
2. | We wish to borrow a Loan on the following terms: |
(a) | Drawdown Date: [•] |
(b) | Amount/currency: [•] |
(c) | Term: [•] |
3. | Our payment instructions are: [•] |
4. | We confirm that each condition precedent under the Agreement which must be satisfied on the date of this Request is so satisfied. |
5. | We confirm that as at [relevant testing date] Consolidated EBITDA was [•] and Interest Payable was [•]; therefore, the ratio of Consolidated EBITDA to Interest Payable was [•] to 1. |
6. | We confirm that as at [relevant testing date] Regulatory Asset Base was [•] and Total Net Debt was [•]; therefore, Total Net Debt does not exceed an amount equal to 85% of the Regulatory Asset Base. |
7. | This Request is irrevocable. |
From: | [THE EXISTING LENDER] (the Existing Lender) and [THE NEW LENDER] (the New Lender) |
1. | The Existing Lender and the New Lender agree to the Existing Lender transferring by novation to the New Lender, and in accordance with Clause 29.3 (Procedure for transfer by way of novation), all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in Loans under the Agreement as specified in the Schedule below. |
2. | The proposed Transfer Date is [•]. |
3. | The administrative details of the New Lender for the purposes of the Agreement are set out in the Schedule. |
4. | The New Lender confirms, for the benefit of the Facility Agent and without liability to the Company, that it is: |
(a) | [a Qualifying Lender falling within paragraph (a)(i) or paragraph (b) of the definition of Qualifying Lender;] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender].* |
5. | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; or |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]** |
6. | [The New Lender confirms (for the benefit of the Facility Agent and without liability to the Company) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [•]), and is tax resident in [•] *** so that interest payable to it by the Company is generally subject to full exemption from UK withholding tax and notifies the Company that the Company must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
* | Delete as applicable - each New Lender is required to confirm which of these three categories it falls within. |
** | Include if New Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 14.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
7. | This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law. |
[EXISTING LENDER] | [NEW LENDER] | |
By: | By: |
1. | We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning in this Compliance Certificate unless given a different meaning in this Compliance Certificate. |
2. | We confirm that as at [relevant testing date], Consolidated EBITDA was [•] and Interest Payable was [•], therefore the ratio of Consolidated EBITDA to Interest Payable was [•] to 1. |
3. | We confirm that as at [relevant testing date], Regulatory Asset Base was [•] and Total Net Debt was [•]; therefore Total Net Debt does not exceed 85% of the Regulatory Asset Base. |
4. | We set out below calculations establishing the figures in paragraphs 2 and 3 above: |
5. | We confirm that the following companies were Material Subsidiaries at [relevant testing date]: |
6. | [We confirm that no Default is outstanding as at [relevant testing date].] 1 |
To: | Mizuho Bank, Ltd. as Facility Agent and Western Power Distribution (South West) plc as Company |
1. | We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation. |
2. | We refer to Clause 2.2 (Increase) of the Agreement. |
3. | In accordance with the terms of the Agreement, the Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the "Relevant Commitment") as if it was an Original Lender under the Agreement. |
4. | The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the "Increase Date") is [•]. |
5. | On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender. |
6. | The Facility Office and address, fax number and attention details for notices to the Increase Lender are set out in the Schedule. |
7. | The Increase Lender expressly acknowledges the limitations on the Lenders' obligations referred to in Clause 2.2 (Increase). |
8. | The Increase Lender confirms, for the benefit of the Facility Agent and without liability to the Company, that it is: |
8.1.1 | [a Qualifying Lender falling within paragraph (a)(i) or paragraph (b) of the definition of Qualifying Lender;] |
8.1.2 | [a Treaty Lender;] |
8.1.3 | [not a Qualifying Lender].* |
9. | [The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
9.1.1 | a company resident in the United Kingdom for United Kingdom tax purposes; or |
9.1.2 | a partnership each member of which is: |
(1) | a company so resident in the United Kingdom; or |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
9.1.3 | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]** |
10. | [The Increase Lender confirms (for the benefit of the Facility Agent and without liability to the Company) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [•]), and is tax resident in [•] *** so that interest payable to it by the Company is generally subject to full exemption from UK withholding tax and notifies the Company that the Company must make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date.]**** |
* | Delete as applicable - each Increase Lender is required to confirm which of these three categories it falls within. |
** | Include if Increase Lender comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 14.1 (Definitions). |
*** | Insert jurisdiction of tax residence. |
**** | This confirmation must be included if the Increase Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement. |
11. | This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation. |
12. | This Increase Confirmation and any non‑contractual obligations arising out of or in connection with it are governed by English law. |
13. | This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation. |
Facility Agent | |
By: | |
as Facility Agent for and on behalf of each of the parties to the Agreement (other than the Increase Lender) |
Loans in euro | Loans in sterling | Loans in other currencies | ||||
Facility Agent notifies the Company if a currency is approved as an Optional Currency in accordance with Clause 4.3 (Conditions relating to Optional Currencies) | - | - | U-4 | |||
Delivery of a duly completed Request (Clause 5.2 (Completion of Requests)) | U-3 9:30 a.m. | U-1 9:30 a.m. | U-3 9:30 a.m. | |||
Facility Agent determines (in relation to a Loan) the Base Currency Amount of the Loan, if required under Clause 5.4 (Advance of Loan) and notifies the Lenders of the Loan in accordance with Clause 5.4 (Advance of Loan) | U-3 Noon | U-1 Noon | U-3 Noon | |||
Facility Agent receives a notification from a Lender under Clause 7.2.1 (Revocation of a currency) | Quotation Day | - | Quotation Day | |||
Facility Agent gives notice in accordance with Clause 7.2 (Revocation of a currency) | Quotation Day 5:30 p.m. | - | Quotation Day 5:30 p.m. | |||
LIBOR or EURIBOR is fixed | Quotation Day as of 11:00 a.m. London time in respect of LIBOR and as of 11:00 a.m. (Brussels time) in respect of EURIBOR | Quotation Day as of 11:00 a.m. | Quotation Day as of 11:00 a.m. |
"U" | = date of utilisation |
"U-X" | = X Business Days prior to date of utilisation. |
1. | WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC (registered number 02366894) (the Company); |
2. | [SUBORDINATED CREDITOR] (the Subordinated Creditor); and |
3. | [], as Facility Agent acting on behalf of the Lenders (the Facility Agent). |
1. | INTERPRETATION |
1.1 | Definitions |
(a) | the repayment or prepayment of any principal amount (or capitalised interest) outstanding under the Subordinated Finance Document; |
(b) | the payment of any interest, fee or charge accrued or due under or any other amount payable in connection with the Subordinated Finance Document; or |
(c) | the purchase, redemption, defeasance or discharge of any amount outstanding under the Subordinated Finance Document, |
1.2 | Construction |
1.2.1 | Capitalised terms defined in the Agreement have the same meaning in this Deed, unless given a different meaning in this Deed. |
1.2.2 | The principles of construction set out in the Agreement will have effect as if set out in this Deed. |
1.2.3 | Any undertaking by the Subordinated Creditor in this Deed remains in force from the date of this Deed to the Senior Debt Discharge Date. |
1.3 | Third Party rights |
2. | SUBORDINATION |
2.1 | Ranking |
2.2 | Undertakings of the Company |
2.2.1 | make any payment whatsoever in respect of the Subordinated Debt other than a Permitted Subordinated Debt Payment; or |
2.2.2 | secure, in any manner, all or any part of the Subordinated Debt; or |
2.2.3 | defease, in any manner, all or any part of the Subordinated Debt; or |
2.2.4 | give any financial support (including the taking of any participation, the giving of any guarantee or other assurance or the making of any deposit) to any person in connection with all or any part of the Subordinated Debt; or |
2.2.5 | procure any other person to do any of the acts or take any of the actions referred to paragraphs 2.2.1 to 2.2.4 above. |
2.3 | Undertakings of the Subordinated Creditor |
2.3.1 | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(a) | allow to exist or receive the benefit of any Security Interest, guarantee, indemnity or other assurance against loss in respect of all or any of the Subordinated Debt or all or any rights which it may have against the Company in respect of all or any part of the Subordinated Debt; or |
(b) | take or omit to take any action or step whereby the subordination of all or any of the Subordinated Debt might be terminated, impaired or adversely affected. |
2.3.2 | The Subordinated Creditor will not without the prior written consent of the Lenders receive any payment save where such payment is a Permitted Subordinated Debt Payment. |
2.3.3 | The Subordinated Creditor will not without the prior written consent of the Lenders: |
(a) | demand payment, declare prematurely due and payable or otherwise seek to accelerate payment of or place on demand all or any part of the Subordinated Debt or enforce the Subordinated Debt by execution or otherwise; |
(b) | initiate or support or take any steps with a view to, or which may lead to: |
(i) | any insolvency, liquidation, reorganisation, administration or dissolution proceedings; |
(ii) | any voluntary arrangement or assignment for the benefit of creditors; or |
(iii) | any similar proceedings, |
(c) | bring or support any legal proceedings against the Company or any of its Subsidiaries; or |
(d) | otherwise exercise any remedy for the recovery of all or any part of the Subordinated Debt (including, without limitation, the exercise of any right of set-off, counterclaim or lien). |
2.3.4 | If the Subordinated Creditor receives any payment which is in breach of any Finance Document, it shall hold such sums on trust for the Facility Agent (acting on behalf of the Lenders) and pay them immediately to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt. |
2.3.5 | The Subordinated Creditor and the Company hereby agree for the benefit of the Facility Agent and the Lenders that, notwithstanding the terms of the Subordinated Finance Document and any agreement relating to the Subordinated Debt, the Subordinated Debt is made available on terms such that it is not, save for a Permitted Subordinated Debt Payment or otherwise with the consent of the Lenders, repayable unless and until the Senior Debt Discharge Date shall have occurred. |
2.4 | Subordination on insolvency |
2.4.1 | the Subordinated Debt shall continue to be subordinated to the Senior Debt; |
2.4.2 | any payment or distribution of any kind or character and all and any rights in respect thereof, whether in cash, securities or other property which is payable or deliverable upon or with respect to the Subordinated Debt or any part thereof by a liquidator, administrator or receiver (or the equivalent thereof) of the Company or its estate (the "rights") made to or paid to, or received by the Subordinated Creditor or to which the Subordinated Creditor is entitled shall be held on trust by the Subordinated Creditor for the Lenders and shall forthwith be paid or, as the case may be, transferred or assigned to the Lenders to be applied against the Senior Debt; |
2.4.3 | if the trust referred to in paragraph 2.4.2 above or paragraph 2.3.4 of Clause 2.3 above fails or cannot be given effect to or if the Subordinated Creditor receives and retains the relevant payment or distribution, the Subordinated Creditor will pay over such rights in the form received to the Facility Agent (acting on behalf of the Lenders) to be applied against the Senior Debt; |
2.4.4 | the Subordinated Creditor acknowledges the rights of the Facility Agent (acting on behalf of the Lenders) to demand, sue and prove for, collect and receive every payment or distribution referred to in paragraph 2.4.2 above and give acquittance |
2.4.5 | the Subordinated Creditor by way of security for its obligations under this Deed irrevocably appoints the Facility Agent to be its attorney in order to enable the Facility Agent to enforce any and all claims upon or with respect to the Subordinated Debt or any part thereof, and to collect and receive any and all payments or distributions referred to in paragraph 2.4.2 above or to do anything which that Subordinated Creditor has authorised the Facility Agent or any other Party to do under this Deed or is itself required to do under this Deed but has failed to do (and the Facility Agent may delegate that power on such terms as it sees fit). |
3. | SET-OFF |
3.1.1 | The Subordinated Creditor shall not set off against the Subordinated Debt any amount payable by the Subordinated Creditor to the Company. |
3.1.2 | If any part of the Subordinated Debt is discharged in whole or in part by way of set- off, the Subordinated Creditor will promptly pay to the Facility Agent for application in accordance with the terms of paragraph 2.4.2 of Clause 2.4 (Subordination on insolvency) an amount equal to the amount of the Subordinated Debt discharged by such set-off. |
4. | NEW MONEY |
5. | PROTECTION OF SUBORDINATION |
5.1.1 | The subordination in this Deed is a continuing subordination and benefits the ultimate balance of the Senior Debt. |
5.1.2 | Except as provided in this Deed, the subordination is, and the Subordinated Creditor's obligations under this Deed will, not be affected by any act, omission or thing which, but for this provision, would reduce, release or prejudice the subordination or any of the Subordinated Creditor's obligations under this Deed. |
6. | MISCELLANEOUS |
6.1.1 | This Deed overrides anything in any Subordinated Finance Document to the contrary. |
6.1.2 | Any communication in respect of this Deed must be in writing. Contact details for each Party are set out opposite their name, below. |
6.1.3 | This Deed is a Finance Document. |
7. | ASSIGNMENT |
7.1.1 | The Facility Agent (acting on behalf of the Lenders) shall have the full and unfettered right to assign or otherwise transfer the whole or any part of the benefit of this Deed to any person to whom all or a corresponding part of its rights, benefits and obligations under any of the Finance Documents are assigned or transferred in accordance with their provisions. |
7.1.2 | The Subordinated Creditor shall not assign or transfer all or any of its rights, title, benefit and interest in or to all or any part of the Subordinated Debt unless in full and on or prior to such assignment or transfer the assignee or transferee accedes to this Deed as Subordinated Creditor pursuant to the Subordinated Creditor Accession Deed. |
8. | TRUSTS |
8.1.1 | The Facility Agent shall hold the benefit of this Deed upon trust for itself and the Lenders. |
8.1.2 | The perpetuity period for each trust created by this Deed shall be 80 years. |
9. | TERMINATION |
10. | GOVERNING LAW |
11. | JURISDICTION |
To: | [l], as Facility Agent acting on behalf of the Lenders. |
To: | WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC |
EXECUTED as a DEED | ) | |||
by WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Company contact details: | ||||
Address: | Avonbank, Feeder Road, | |||
Bristol BS2 0TB | ||||
Fax number: | 01179 332 108 | |||
Phone number: | 01179 332 354 | |||
E-mail: | jhunt9@wsternpower.co.uk | |||
Attention: | Julie Hunt |
EXECUTED as a DEED | ) | |||
by [ACCEDING SUBORDINATED CREDITOR] | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Subordinated Creditor contact details: | ||||
Address: | ||||
Fax number: | ||||
Phone number: | ||||
E-mail: | ||||
Attention: |
EXECUTED as a DEED | ) | ||
by [AGENT] | ) | ||
acting by | ) | ||
Director | |||
In the presence of: | |||
Witness's Signature: | |||
Name: | |||
Address: | |||
Facility Agent contact details: | |||
Address: | |||
1. | We refer to the Agreement and the Deed. Capitalised terms defined in the Deed have the same meaning in this Certificate, unless given a different meaning in this Certificate. |
2. | We confirm that the Company will make [insert type of payment] of [insert amount and currency] under [insert description of relevant Subordinated Finance Document] on [insert date of payment]. |
3. | We confirm that, taking into account such payment, the Company will be in compliance with its obligations under Clause ý0 (Financial Covenants) of the Agreement on each of the next two Measurement Dates (as such term is defined in the Agreement). |
EXECUTED as a DEED | ) | |||
by WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Company contact details: | ||||
Address: | Avonbank, Feeder Road, | |||
Bristol BS2 0TB | ||||
Fax number: | 01179 332 108 | |||
Phone number: | 01179 332 354 | |||
E-mail: | jhunt9@wsternpower.co.uk | |||
Attention: | Julie Hunt |
EXECUTED as a DEED | ) | |||
by [SUBORDINATED CREDITOR] | ) | |||
acting by | ) | |||
Director | ||||
In the presence of: | ||||
Witness's Signature: | ||||
Name: | ||||
Address: | ||||
Subordinated Creditor contact details: | ||||
Address: | ||||
Fax number: | ||||
Phone number: | ||||
E-mail: | ||||
Attention: |
EXECUTED as a DEED | ) | ||
by [l] | ) | ||
acting by | ) | ||
Director | |||
In the presence of: | |||
Witness's Signature: | |||
Name: | |||
Address: | |||
Facility Agent contact details: | |||
Address: | Bracken House | ||
One Friday Street | |||
London EC4M 9JA |
Signed by for and on behalf of WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC | ) ) ) ) |
Address: Fax: | Avonbank Feeder Road Bristol BS2 OTB +44 (0) 1179 332 108 |
Signed by for and on behalf of ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) | ) ) ) ) ) ) |
Address: Attention: Fax: Fax: | 2 Triton Square Regents Place London NW1 3AN Alejandro Ciruelos (for credit matters) Samuel Russell (for administration matters) +44 (0)20 7756 5816 with a copy to Jim Inches/David Navalon Vaquero +44(0) 845 602 7837 |
South West – Conformed Copy |
Signed by for and on behalf of BARCLAYS BANK PLC | ) ) ) |
Address: Fax: | 5 The North Colonnade London E14 4BB +44 (0)20 7773 1840 |
South West – Conformed Copy |
Signed by for and on behalf of LLOYDS BANK PLC | ) ) |
Address: Fax: | 10 Gresham Street London EC2V 7AE +44 (0)20 7158 3297 |
South West – Conformed Copy |
Signed by for and on behalf of HSBC BANK PLC | ) ) |
Address: Fax: | Sharon daw West & Wales Corporate Banking Centre 3 Rivergate, Bristol, BS1 6ER +44 (0)20 7158 3297 |
South West – Conformed Copy |
Signed by for and on behalf of MIZUHO BANK, LTD. | ) ) ) |
Address: Fax: | Bracken House One Friday Street London EC4M9JA +44(0)207 012 4301 |
South West – Conformed Copy |
Signed by for and on behalf of ROYAL BANK OF CANADA | ) ) |
Attention: | Mike Atherton/Mark Goodin (for credit matters) |
Addresss: | Thames Court |
One Queenhithe | |
London EC4V 4DE | |
Fax: | +44 (0)20 7029 7912 |
Attention: | David Banning/Maggie Weiyan Tang/ |
Ahmed Awad/ Vinodkumar NalappadamVeetil | |
(for administration matters) | |
Address: | Riverbank House |
2 Swan lane | |
London EC4R 3BF | |
Fax: | +44 (0)20 7332 0036 |
South West – Conformed Copy |
Signed by for and on behalf of THE ROYAL BANK OF SCOTLAND PLC | ) ) ) |
Address: Fax: | 7th Floor, 135 Bishopsgate London EC2M 3UR +44 (0) 7085 8762 |
South West – Conformed Copy |
Signed by for and on behalf of THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. | ) ) ) |
Address: Attention: Fax: | Ropemaker Place 25 Ropemaker Street London EC2Y 9AN The Manager - Loan Participation +44 (0)20 7557 1559 |
South West – Conformed Copy |
Signed by for and on behalf of ABBEY NATIONAL TREASURY SERVICES PLC (TRADING AS SANTANDER GLOBAL BANKING & MARKETS) | ) ) ) ) ) ) ) |
Attention: | 2 Triton Square |
Regents Place | |
London NW1 3AN | |
Attention: | Alejandro Ciruelos (for credit matters) |
Samuel Russell (for administration matters) | |
Fax: | +44 (0)20 7756 5816 |
with a copy to Jim Inches/ David Navalón Vaquero | |
Fax: | +44 (0)845 602 7837 |
South West – Conformed Copy |
Signed by for and on behalf of BARCLAYS BANK PLC | ) ) ) |
Address: Attention: Fax: | 5 The North Colonnade London E14 4BB Mark Pope +44 (0)20 7773 1840 |
South West – Conformed Copy |
Signed by for and on behalf of LLOYDS BANK PLC | ) ) |
Address: | 10 Gresham Street |
London EC2V 7AE | |
Attention: | Nick Walker (for credit matters) |
Fax: | +44 (0)20 7158 3297 |
Address: | Wholesale Loan Services |
Level 1, Citymark | |
Fax: | 150 Fountainbridge |
Edinburgh EH3 9PE | |
Attention: | Linzi Inch (for administration matters) |
Fax: | +44 (0)20 7158 3204 |
South West – Conformed Copy |
Signed by for and on behalf of HSBC BANK PLC | ) ) |
Address: Fax: | Sharon daw West & Wales Corporate Banking Centre 3 Rivergate, Bristol, BS1 6ER +44 (0)8455 877941 |
South West – Conformed Copy |
Signed by for and on behalf of MIZUHO BANK, LTD. | ) ) ) ) |
Address: Fax: | Bracken House One Friday Street London EC4M 9JA +44 (0)20 7012 4301 |
South West – Conformed Copy |
Signed by for and on behalf of ROYAL BANK OF CANADA | ) ) |
Attention: | Mike Atherton/ Mark Goodin (for credit matters) |
Address: | Thames Court |
One Queenhithe | |
London EC4V 4DE | |
Fax: | +44 (0)20 7029 7912 |
Attention: | David Banning/ Maggie Weiyan Tang/ |
Ahmed Awad/ Vinodkumar NalappadamVeetil | |
(for administration matters) | |
Address: | Riverbank House |
2 Swan Lane | |
London EC4R 3BF | |
Fax: | +44 (0)20 7332 0036 |
South West – Conformed Copy |
Signed by for and on behalf of THE ROYAL BANK OF SCOTLAND PLC | ) ) ) ) |
Address: | 7th Floor, 135 Bishopsgate |
London EC2M 3UR | |
Attention: | John Jones (for credit matters) |
Fax: | +44 (0)20 7085 8762 |
Attention: | Lending Operations (for administration matters) |
Fax: | +44 (0)20 7672 6403 |
South West – Conformed Copy |
Signed by for and on behalf of THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. | ) ) ) ) |
Address: Attention: Attention: Fax: | Ropmaker Place 25 Ropemaker Street London EC2Y 9AN Robert Welford/Mayumi Saito-O'connor/ Kumar Shah The Manager - Loan Participation +44 (0)20 7557 1559 |
South West – Conformed Copy |
Signed by for and on behalf of MIZUHO BANK, LTD. | ) ) ) |
Address: Fax: | Bracken House One Friday Street London EC4M 9JA +44 (0)207 012 4053 |
South West – Conformed Copy |
Signed by for and on behalf of MIZUHO BANK, LTD. | ) ) ) |
Address: Fax: | Bracken House One Friday Street London EC4M 9JA +44 (0)207 012 4053 |
South West – Conformed Copy |
Signed by for and on behalf of HSBC BANK PLC | ) ) ) |
Address: Fax: | Sharon daw West & Wales Corporate Banking Centre 3 Rivergate, Bristol, BS1 6ER +44 (0)8455 877941 |
South West – Conformed Copy |
1.1 | Outline Terms |
• Bond: | Any bid or tender bond, advance payment bond, performance bond or other bond issued or to be issued by the Bank under this Facility Letter at the request of the Borrower (each a "Bond" and together the "Bonds") provided that no Credit Substitute Bond shall be issued under this Facility Letter. |
• Currency Adjustment Limit: | 110% of the Limit. |
• Foreign Currency: | The Euro and any other currency which is freely convertible and transferable into Sterling and readily available in the London Interbank Market. |
Svenska Handelsbanken AB (publ) | Telephone 0117 302 0080 | |
66 Queen Square | Fax 0117 302 0077 | |
Bristol | www.handelsbanken.co.uk/bristolqueensquare | |
BS1 4JP | SWIFT HANDGB22 | |
Handelsbanken is the trading name of Svenska Handelsbanken AB (publ). Registered Office: Svenska Handelsbanken AB (publ), 3 Thomas More Square, London, E1W 1WY. Registered in England and Wales No, BR 000589. Incorporated in Sweden with limited liability. Registered in Sweden No, 502007-7862. Head Office in Stockholm. Authorised by the Swedish Financial Supervisory Authority (Finansinspektionen) and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request. |
• Guarantee: | Any guarantee issued or to be issued by the Bank under this Facility Letter at the request of a Borrower (each a "Guarantee" and together the "Guarantees") provided that no Credit Substitute Guarantee shall be issued under this Facility Letter. |
• Limit | £5,000,000. 00 (five million pounds sterling) |
• Review Date: | On or around 31st August annually. |
• Standby Letter of Credit: | Any standby letter of credit issued or to be issued under the Facility and subject to either terms of (i) Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No 600 as amended by any subsequent revision or (ii) International Standby Procedures ISP98 International Chamber of Commerce Publication No 590 as amended by any subsequent revision (each a "Standby Letter of Credit" and together the "Standby Letters of Credit") provided that no Credit Substitute Standby Letter of Credit shall be issued under this Facility Letter. |
1.2 | Definitions and Interpretation |
2 | The Facility |
2.1 | The Borrower has requested and the Bank has agreed to issue Instruments pursuant to the terms and conditions of this Facility Letter in Sterling and/or Foreign Currency. |
2.2 | Furthermore the Borrower undertakes not to use the Facility for any purpose or in any manner that would result in a breach by it, or any other person, of any provision of the Bribery Act 2010. |
3 | Conditions Precedent |
3.1 | The Facility shall be available for use by the Borrower only when the Bank (i) shall have received, to its satisfaction as to their form and substance, the documents and evidence set out in Schedule 1 and (ii) is satisfied that the other conditions detailed in Schedule 1 have been satisfied. The Bank shall confirm to the Borrower in writing when it is so satisfied. |
3.2 | The Conditions Precedent set out in Schedule 1 are for the sole benefit of the Bank, and the Bank may in its sole and absolute discretion make the Facility, or a part thereof, available notwithstanding that one or more of such conditions have not been fulfilled on terms that such condition or conditions shall be fulfilled within such period or periods thereafter as the Bank shall determine unless the Bank shall otherwise agree to waive such condition or conditions in its sole and absolute discretion. |
4 | Utilisation, Availability and Termination |
4.1 | Utilisation of the Facility ("Facility Utilisation") will be calculated as the Maximum Liability of all Instruments issued and in the course of being issued. |
4.2 | The Facility Utilisation at any time shall not exceed the Limit and the Bank is not obliged to allow or continue to allow any utilisation in excess of the Limit. |
4.3 | The Facility is uncommitted and shall remain available to the Borrower until further notice but shall be subject to cancellation at any time by either the Bank or the Borrower giving written notice to the other. In the event of such cancellation no further Instruments will be issued and all sums outstanding hereunder shall become due and payable to the Bank in accordance with the provisions of Clause 16 within three Business Days of the date of such demand. |
4.4 | The Bank shall review the Facility on each Review Date and may contact you to discuss your future requirements. Whenever we review the Facility, we may charge you a renewal fee. |
4.5 | Notwithstanding any other provisions of this Facility Letter if the Facility is cancelled or repayment of any part thereof is demanded, the Bank shall be entitled at the cost and expense of the Borrower to convert the Foreign Currency utilisation of the Facility into Sterling and the Borrower shall be obliged to repay all such sums in Sterling. The Bank Rate of Exchange shall be used in relation to such conversion. |
5 | Instruments |
5.1 | Subject to the prior satisfaction of the Conditions Precedent, and the Bank’s agreement, the Borrower may request the Bank in writing to issue an Instrument each of which shall:- |
5.1.1 | be valid for a period not exceeding 2 years or such other period as the Bank may agree from time to time; and |
5.1.2 | only be issued where the Bank has been provided with such further supporting documentation as the Bank may at its sole discretion require. |
5.2 | The Bank's Maximum Liability under an Instrument shall be treated as reduced for the purposes of this Facility Letter only when and to the extent that: |
5.2.1 | the Bank has received written confirmation from the beneficiary of the Instrument or the correspondent bank issuing such Instrument of the amount of such reduction; or |
5.2.2 | the Bank has made a payment under the Instrument and the terms of the Instrument allow for the Bank's Maximum Liability thereunder to be irrevocably reduced by the amount of any such payment; or |
5.2.3 | the Bank is otherwise satisfied that its Maximum Liability under the Instrument has been irrevocably reduced. |
5.3 | The Bank's Maximum Liability under an Instrument shall be treated as extinguished for the purposes of this Facility Letter only when and to the extent that:‑ |
5.3.1 | the Bank has received written confirmation from the beneficiary of the Instrument or the correspondent bank issuing such Instrument that the Bank's Maximum Liability under the Instrument has been extinguished and/or the Instrument is returned to the Bank; or |
5.3.2 | the Bank has settled its Maximum Liability under the Instrument in full; or |
5.3.3 | the Bank is otherwise satisfied that its Maximum Liability under the Instrument has been extinguished. |
6 | Fees |
6.1 | The Borrower shall pay any Bond, Guarantee and Standby Letter of Credit transactional fees as detailed in the Bond, Guarantee and Standby Letter of Credit tariff agreed between the Borrower and the Bank. The Borrower will be notified of any variation to the tariff by the Bank giving 30 day’s notice in writing. |
6.2 | The Borrower will pay to the Bank quarterly in advance and commencing on the date of issue of the relevant Instrument an amount equal to the Risk Fee calculated on the Maximum Liability of such Instrument for such quarterly period or part thereof together with fees payable under any Bond, Guarantee and Standby Letter of Credit tariff as may be agreed between the Borrower and the Bank from time to time. |
6.3 | The Risk Fee on each Instrument shall be paid in Sterling. The Risk Fee on an Instrument denominated in Foreign Currency shall be calculated by reference to the Bank Rate of Exchange for the relevant Foreign Currency against Sterling. |
6.4 | Where an Instrument is issued by a correspondent bank such charges and commission charged by such correspondent bank shall be paid by the Borrower within three Business Days of demand by the Bank. |
7 | Indemnity |
7.1 | In consideration of the Bank issuing Instruments and such documentation as may be entered into pursuant to such Instruments (all as referred to and/or as defined elsewhere herein and referred to below as the “said obligations”), the Borrower hereby:- |
7.1.1 | irrevocably authorises the Bank to make any payment and comply with any demand which may be claimed from or made upon it under the terms of each and any of the said obligations without any reference to or further authority from the Borrower and without enquiry into the justification therefor or validity thereof and the Borrower agrees that any payment which the Bank shall make in accordance or purporting to be in accordance with any of the said obligations shall be binding upon the Borrower and shall be accepted by the Borrower as conclusive evidence that the Bank was liable to make such payment with such demand; |
7.1.2 | agrees that the Bank may without the knowledge or consent of the Borrower determine, renew, reduce, increase or vary in any respect the terms of the said obligations or compound with or grant time or other indulgence to or for any other person whatsoever or deal with, exchange, release, modify or abstain from perfecting or enforcing any security or other guarantee or right which the Bank now has or may hereafter have against the Borrower or any such other person, and this indemnity shall not be discharged nor shall the liability of the Borrower under it be impaired or discharged by any of those matters; |
7.1.3 | agrees and undertakes at all times hereafter to well and sufficiently indemnify the Bank and keep the Bank indemnified from and against all payments made under each and any of the said obligations, all claims made upon by the Bank under the terms of any Instrument and against all actions, suits, proceedings, claims, demands, liabilities, losses, costs, charges, damages and expenses whatsoever in relation to or arising out of each and any of the said obligations and to pay or reimburse to the Bank within three Business Days of demand an amount equal to the amount of any claim made upon the Bank under the terms of any Instrument and all payments, losses, costs, and expenses made, suffered or incurred by it under each and any of the said obligations or in consequence thereof or arising therefrom; |
7.1.4 | irrevocably authorises the Bank (without prejudice to any other right the Bank may have) to (i) debit to an account in the name of the Borrower or to any of their accounts with the Bank all such payments, losses, costs and expenses whether such account or accounts is or are overdrawn or may become overdrawn by reason of any such debit; (ii) open, in the Borrower’s name, such accounts as the Bank shall see fit; and (iii) carry out, at the Borrower’s expense, any foreign exchange transactions as may be necessary to enable the Bank to debit an account notwithstanding that the payments owing under the Instrument may have been in a Foreign Currency; and |
7.1.5 | agrees that its obligations under this Clause 7:- |
(i) | shall be unconditional and are and will remain in full force and effect by way of continuing indemnity until full and irrevocable discharge of all the said obligations; |
(ii) | are additional to, and not in substitution for, any security, guarantees, other indemnities or rights of subrogation at any time existing in favour of the Bank, whether granted by the Borrower or any other person, and are cumulative and not exclusive of any rights or remedies provided by law; and |
(iii) | shall not be affected by (1) any invalidity, illegality, irregularity or unenforceability of or defect in any provision of this Facility Letter, (2) any time, indulgence, waiver or consent at any time given to the Borrower or any other person, (3) any amendment to this Facility Letter, (4) the enforcement or absence of enforcement of any claim against the Borrower or of any other security, guarantee or indemnity, (5) the release of any such claim, security, guarantee or indemnity, (6) the dissolution, amalgamation, reconstruction or reorganisation of the Borrower or (7) any other matter or thing whatsoever which might affect the Borrower’s obligations under this Facility Letter, except for full and irrevocable payment and discharge of all the obligations of the Borrower to the Bank in respect of all the said obligations. |
7.2 | The obligations of the Borrower under this Clause 7 shall survive the payment in full of the liabilities of the Bank under the said obligations and shall only terminate when the Instrument and/or other documents evidencing the said obligations, if applicable, are returned to the Bank marked "cancelled" (or other similar wording acceptable to the Bank) or the Bank is satisfied that it has no further liabilities in respect thereof. The Borrower agrees to use all reasonable endeavours to procure the return to the Bank of the Instrument and any other documents evidencing the said obligations, upon expiry or payment in full by the Bank of all sums payable thereunder. |
7.3 | This indemnity shall constitute and be a continuing security to the Bank for as long as any liabilities shall remain upon the Bank in respect of the said obligations and shall extend to any and all extensions, renewals or replacements thereof. The Bank's certificate in respect of any amounts called for shall be final and conclusive, save for manifest error. |
8 | Increased Costs, Default Interest and Currency Adjustment Limit |
8.1 | The Borrower shall, within three Business Days of a demand by the Bank, pay the Bank the amount of any Increased Costs incurred by the Bank as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law, regulation or directive (whether or not having the force of law) or (ii) compliance with any law, regulation or directive (whether or not having the force of law) made after the date of this Facility Letter. |
8.2 | In this Facility Letter "Increased Costs" means: |
8.2.1 | a reduction in the rate of return from the Facility or on the Bank’s overall capital; |
8.2.2 | an additional or increased cost; or |
8.2.3 | a reduction of any amount due and payable under this Facility Letter, |
8.3 | The Bank prior to making a claim pursuant to Clause 8.1 above shall notify the Borrower of the event giving rise to the claim and shall, as soon as practicable after a demand by the Borrower, provide a certificate confirming the amount of its Increased Costs. |
8.4 | If the Borrower shall fail to pay any sum due hereunder or under the judgement of any court in connection herewith on the due date therefor, then as a separate obligation the Borrower shall pay to the Bank interest at the Default Rate on any such sum due to the Bank up to the date on which such sum is repaid and any other amounts outstanding under this Facility Letter have been paid in full. Interest shall be payable at the rate both before and after demand, court decree or judgment on such dates advised by the Bank to the Borrower any such interest which is not paid when due shall be added to the overdue sum and itself bear interest accordingly. |
8.5 | Currency Adjustments |
8.6 | The Bank's certificate as to the amounts due pursuant to this Clause 8 shall be final and conclusive, save for manifest error. |
9 | Financial Information |
10 | Payments, Calculations and Tax Indemnity |
10.1 | All interest shall accrue from day to day and be calculated on the basis of the actual number of days elapsed within a year of 365 days or 360 days as appropriate dependent upon the currency. |
10.2 | All sums payable by the Borrower to the Bank shall be paid without deduction for or on account of any set-off or counter-claim and free and clear of any deduction or withholding of any nature (including taxation) unless such a deduction or withholding is required by law. |
10.3 | If any amount is required by law to be deducted or withheld from any sum payable hereunder then the Borrower shall pay such an additional amount as will ensure that, after the making of such deduction or withholding, the Bank shall receive a net sum equal to the sums which the Bank would have received had no such deduction or withholding been required to be made. |
10.4 | If it becomes necessary to convert into another currency any amount due by the Borrower hereunder or under any Instrument the Borrower undertakes as an independent obligation to pay such additional amounts as may be necessary to ensure that the total amount paid in the second currency when converted at the Bank Rate of Exchange on the date of payment to the Bank will produce the amount then due from the Borrower to the Bank in the original currency. |
10.5 | The Borrower shall (within three Business Days of demand by the Bank) pay to the Bank an amount equal to the loss, liability or cost which the Bank determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Bank in respect of the Facility Letter. |
10.6 | Clause 10.5 above shall not apply: |
10.6.1 | with respect to any Tax assessed on the Bank under the law of the jurisdiction in which the Bank is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Bank is treated as resident for tax purposes, if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Bank; or |
10.6.2 | to the extent a loss, liability or cost is compensated for by an increased payment under Clause 10.3. |
10.7 | If the Bank makes (or intends to make) a claim under Clause 10.5 above, it shall notify the Borrower as soon as is reasonably practicable of the event which has caused (or will cause) that claim, however, the Bank’s entitlement to exercise its rights under Clause 10.5 above is not conditional on such notification being made in accordance with this Clause 10.7. |
10.8 | For the purposes of Clauses 10.5 and 10.6: |
11 | Security |
12 | Set-Off |
12.1 | In addition to any other rights to which it may be entitled, the Bank may retain, set off or appropriate any credit balances in name of the Borrower (whether current or not yet due) against any of the Borrower's obligations to the Bank under this Facility Letter that are overdue from time to time. The Bank may exercise any of these rights without prior notice both before and after demand and in so doing may convert to Sterling at the Bank Rate of Exchange any balance which is in a currency other than Sterling. |
12.2 | Nothing expressed or implied in this Facility Letter or any other document in connection herewith shall be regarded as in any way negating or affecting any right which the Bank may have under applicable law to apply |
13 | Remedies, Waivers, Amendments and Consents |
13.1 | No failure on the part of the Bank to exercise, and no delay on its part in exercising, any right or remedy under this Facility Letter will operate as a waiver thereof, nor will any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Facility Letter are cumulative and not exclusive of any rights or remedies provided by law or otherwise. |
13.2 | Save to the extent expressly provided to the contrary in this Facility Letter a person who is not a party to this Facility Letter may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999. |
14 | Assignment and Transferability |
14.1 | The Borrower may not assign, transfer or otherwise dispose of all or any part of its rights, benefits or obligations under this Facility Letter. |
14.2 | The Bank may at any time assign, novate or transfer all or any part of its rights, benefits and obligations under this Facility Letter or grant participations therein to any one or more banks or financial institutions and the Borrower and any other party to this Facility Letter hereby agrees to execute any documents required to enable the Bank so to do (provided that the Borrower and any such other party shall neither be required thereby to pay any greater amount to satisfy its obligations hereunder nor be responsible for any legal or statutory costs or duties arising therefrom) and the Borrower and any other party to this Facility Letter further agrees that the Bank may disclose any information to any such bank or financial institution for said purpose. |
15 | Severance |
16 | Cash Cover |
16.1 | In the event that the availability of the Facility is cancelled or terminated the Bank may, at its sole discretion, and without prejudice to the other provisions in this Facility Letter call on the Borrower to deposit with and the Borrower will pay to the Bank an amount up to the aggregate Maximum Liability of all Instruments issued under the Facility, together with any fees due. In the absence of such funds being provided the Bank shall be entitled at its discretion to obtain payment by debiting the amount to an account of the Borrower with the Bank. |
16.2 | If the Bank requires, at its sole discretion, any amount paid to the Bank pursuant to this Clause and/or Clause 8.5 will be charged to the Bank as security against any claims made upon the Bank under the Instruments, the Borrower undertakes to promptly and in any event within 3 Business days of receiving the Banks preferred form of security, grant or cause to be granted to the Bank security in the Bank's preferred form over such amounts. |
16.3 | Any sums deposited with or charged to the Bank in terms of this Clause and Clause 8.5 shall be held in an interest-bearing account and may be applied by the Bank, at its sole discretion, against any claims made upon the Bank under any Instrument. |
17 | Costs and Expenses |
17.1 | The Borrower agrees that the costs and expenses, including legal fees, disbursements registration fees and value added tax thereon, incurred by the Bank in connection with the preparation, negotiation, execution and registration of this Facility Letter and any other documents required in connection with the Facility shall be for the Borrower's account and the Borrower hereby indemnifies the Bank in respect of payment thereof. |
17.2 | The Borrower further undertakes to reimburse and indemnify the Bank for any and all costs, interest, charges and expenses incurred by the Bank, as well after as before judgement, in connection with preserving, enforcing or seeking to preserve or enforce its rights in respect of this Facility Letter or any amendment thereto, or in connection with the granting of any approvals or consents hereunder or thereunder. |
18 | Notices |
18.1 | Each notice or other communication to be given under this Facility Letter shall be given in writing in English and, unless otherwise provided, shall be made by hand, fax or letter. For the avoidance of doubt, notices shall not be validly served by e-mail and any payment instructions may not be served by facsimile, unless the Borrower adopts the Bank’s security procedures. |
18.1.1 | in the case of the Borrower to its registered office; and |
18.1.2 | in the case of the Bank to the address detailed above. |
18.2 | Any notice or other communication given by any party shall be deemed to have been received: |
18.2.1 | in the case of a notice given by hand, at the time of day of actual delivery; or |
18.2.2 | if sent by fax, with a confirmed receipt of transmission from the receiving machine, on the day on which it is transmitted; or |
18.2.3 | if posted, by 10 am on the second Business Day following the day on which it was despatched by first class mail postage prepaid, |
19 | Governing Law |
Authorised Signatory | Authorised Signatory |
. | Director |
. | Director/Secretary |
.Date |
1 | A copy of this Facility Letter signed by duly authorised officials accepting on behalf of the Borrower or the terms and conditions set out herein; |
2 | A Bank Mandate duly completed by or on behalf of the Borrower, together with such other documents as the Bank shall require to complete its account opening formalities and to ensure compliance with money laundering obligations; |
3 | A copy of the Borrower’s Certificate of Incorporation; |
4 | A copy certified as true and accurate by a Director or the Secretary of the Borrower of a resolution authorising the appropriate officials to act on behalf of and to bind the Borrower in the acceptance of the terms and conditions of this Facility Letter, the execution of this Facility Letter and any other necessary supporting documents ancillary thereto and negotiate any utilisation under this Facility on behalf of the Borrower. |
(a) | for the purposes of rate fixing/drawing/payments in relation to Euros a TARGET Day; and |
(b) | for all other purposes, a day (other than a Saturday or Sunday) on which banks are open for general business in London and, in the case of a Foreign Currency, in the principal financial centre for that Foreign Currency. |
(a) | statutes, statutory provisions and other legislation shall include all amendments, substitutions, modifications and re-enactments for the time being in force and shall include any orders, regulations, instruments or other subordinate legislation made under the relevant legislation. |
(b) | "including" shall not be construed as limiting the generality of the words preceding it. |
(c) | any clause, paragraph or schedule shall be construed as a reference to the clauses in this Facility Letter, the schedules to this Facility Letter and the paragraphs in such schedules. |
(d) | the singular shall include the plural and vice versa and words denoting any gender shall include all genders and if any party to this Facility Letter constitutes more than one person all covenants, conditions and obligations shall be deemed to be given by all such parties on a joint and several basis unless this Facility Letter specifically provides otherwise. |
(e) | this Facility Letter and to any provisions of it or to any other document referred to in this Facility Letter shall be construed as references to it in force for the time being and as amended, varied, supplemented, restated, substituted or novated from time to time. |
(f) | a person is to be construed to include references to a corporation, firm, company, partnership, joint venture, unincorporated body of persons, individual or any state or any agency of a state, whether or not a separate legal entity. |
(g) | any person is to be construed to include that person's assignees or transferees or successors in title, whether direct or indirect. |
(h) | any word or phrase includes all derivations thereof. |
(i) | a matter being in the opinion of the Bank or at the Bank's discretion shall be in the sole opinion of the Bank taking into consideration the Bank's interests hereunder and in the case of the Bank's discretion it shall be at the Bank's sole unfettered discretion without taking into consideration other party's interests. |
1.1 | Outline Terms |
• Amount & Type of Facility: | £75,000,000 (seventy five million pounds sterling) money market facility. |
• Bank’s Fees: | • Arrangement Fee £15,000 payable on signing this Facility Letter. • Annual Fee £11,250 payable yearly in advance with effect from 1st March 2018 • Breakage Fee £300 payable on the date a Drawing or any part thereof is repaid or prepaid other than on the relevant Maturity Date. • Break Costs (if applicable). |
• Review Date: | On or around 28th February annually |
• Specified Purpose | General business purposes. |
1.2 | Definitions and Interpretation |
Svenska Handelsbanken AB (publ) | Telephone 0117 302 0080 | |
66 Queens Square | Fax 0117 302 0077 | |
Bristol | www.handelsbanken.co.uk/bristolqueensquare | |
BS1 4JP | SWIFT HANDGB22 | |
Handelsbanken is the trading name of Svenska Handelsbanken AB (publ). Registered Office: Svenska Handelsbanken AB (publ), 3 Thomas More Square, London, E1W 1WY. Registered in England and Wales No, BR 000589. Incorporated in Sweden with limited liability. Registered in Sweden No, 502007-7862. Head Office in Stockholm. Authorised by the Swedish Financial Supervisory Authority (Finansinspektionen) and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request. |
2 | The Facility |
3 | Conditions Precedent |
3.1 | The Facility shall be available for use by the Borrower only when the Bank (i) shall have received, to its satisfaction as to their form and substance, the documents and evidence set out in Schedule 1 and (ii) is satisfied that the other conditions detailed in Schedule 1 have been satisfied. |
3.2 | The Conditions Precedent set out in Schedule 1 are for the sole benefit of the Bank, and the Bank may in its sole and absolute discretion make the Facility, or a part thereof, available notwithstanding that one or more of such conditions have not been fulfilled on terms that such condition or conditions shall be fulfilled within such period or periods thereafter as the Bank shall determine unless the Bank shall otherwise agree to waive such condition or conditions in its sole and absolute discretion. |
4 | Utilisation, Availability and Termination |
4.1 | Utilisation of the Facility ("Facility Utilisation") will be calculated as the aggregate value of outstanding Drawings. |
4.2 | Facility Utilisation at any time shall not exceed the Limit and the Bank is not obliged to allow or continue to allow any utilisation in excess of the Limit. |
4.3 | The Facility is uncommitted and shall remain available to the Borrower until further notice but shall be subject to cancellation at any time by either the Bank or the Borrower giving written notice to the other. In the event of such cancellation no further Drawings shall be made available and the Bank will be entitled to require the Borrower to immediately repay all Drawings in accordance with the provisions of Clause 5.5. |
4.4 | The Bank shall review the Facility on each Review Date and may contact you to discuss your future requirements. Whenever we review the Facility, we may charge you a renewal fee. |
4.5 | All sums outstanding under the Facility together with interest thereon, and any fees, costs, charges and expenses payable hereunder shall be repayable upon demand at all times. |
5 | Drawings |
5.1 | Borrowings by way of drawings shall be permitted at the Bank's discretion (together the "Drawings" each a "Drawing"). |
5.2 | Each Drawing shall be for an amount, a period and at an interest rate, all to be mutually agreed at the time of each such Drawing, such period to expire no later than the next Quarter Day unless otherwise agreed by the Bank. |
5.3 | Interest on Drawings shall be payable by the Borrower in full in immediately available funds, on the relevant Maturity Date and on any date that a Drawing is renewed for a further period pursuant to Clause 5.4. |
5.4 | Each Drawing shall be repaid in full by the Borrower on the relevant Maturity Date unless the Bank, in its sole discretion, shall agree to renew any such Drawing for a further period in which case the Maturity Date for such Drawing shall be extended accordingly. |
5.5 | Notwithstanding any other term of this Facility Letter each Drawing together with interest thereon, and any fees, costs, charges and expenses payable hereunder shall be repayable upon demand and in the event that the Facility is cancelled or demand is made by the Bank, the Bank shall be entitled at the cost of the Borrower to break any interest period that may be applicable to a Drawing and the Borrower shall pay to the Bank the Breakage Fee and all Break Costs arising as a result thereof together with accrued interest. In the event that the Bank shall exercise such right all Drawings outstanding shall thereafter be fixed for such interest periods as shall be determined by the Bank in its sole and absolute discretion. |
5.6 | If there is a repayment, prepayment or recovery of all or any part of a Drawing other than on the relevant Maturity Date, then the Borrower will pay to the Bank on demand an amount equal to the Break Costs together with the Breakage Fee and the Borrower indemnifies the Bank against any other costs, liabilities or expenses incurred by the Bank in connection with that early repayment, prepayment or recovery. |
5.7 | Any notice of prepayment under this Facility Letter shall be irrevocable and the provisions of this Clause 5 shall apply to any prepayment. |
5.8 | If the prepayment sum is received by the Bank after 10 am then the Bank may treat such prepayment as if it had been received on the next Business Day. Any prepayment must be accompanied by any Breakage Fee and all Break Costs arising as a result thereof together with accrued interest. |
6 | Fees |
6.1 | In consideration of the Bank making the Facility available hereunder the Borrower shall pay to the Bank, the Bank's Fees which if not previously paid shall be deducted from any Drawing made hereunder. Any fees as set out in Clause 1.1 not due on first utilisation shall be debited to the Borrower’s account and be payable in advance at the time or times and in the manner set out in Clause 1.1. |
6.2 | In the event that the level of administration undertaken by the Bank in connection with the operation and monitoring of the Facility shall in the opinion of the Bank have increased or be likely to increase from that envisaged by the Bank when the Facility was originally agreed then the Bank shall have the right to charge the Borrower an Administration Fee. |
7 | Increased Costs and Default Interest |
7.1 | The Borrower shall, within three Business Days of a demand by the Bank, pay the Bank the amount of any Increased Costs incurred by the Bank as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law, regulation or directive (whether or not having the force of law) or (ii) compliance with any law, regulation or directive (whether or not having the force of law) made after the date of this Facility Letter. |
7.2 | In this Facility Letter "Increased Costs" means: |
7.2.1 | a reduction in the rate of return from the Facility or on the Bank’s overall capital; |
7.2.2 | an additional or increased cost; or |
7.2.3 | a reduction of any amount due and payable under this Facility Letter, |
7.3 | The Bank prior to making a claim pursuant to Clause 7.1 above shall notify the Borrower of the event giving rise to the claim and shall, as soon as practicable after a demand by the Borrower, provide a certificate confirming the amount of its Increased Costs. |
7.4 | If the Borrower shall fail to pay any sum due hereunder or under the judgement of any court in connection herewith on the due date therefor, then as a separate obligation the Borrower shall pay to the Bank interest at the Default Rate on any such sum due to the Bank up to the date on which such sum is repaid and any other amounts outstanding under this Facility Letter have been paid in full. Interest shall be payable at the rate both before and after demand, court decree or judgment on such dates advised by the Bank to the Borrower any such interest which is not paid when due shall be added to the overdue sum and itself bear interest accordingly. |
7.5 | The Bank's certificate as to the amounts due pursuant to this Clause 7 shall be final and conclusive, save for manifest error. |
8 | Financial Information |
9 | Payments, Calculations and Tax Indemnity |
9.1 | All interest shall accrue from day to day and be calculated on the basis of the actual number of days elapsed within a year of 365 days. |
9.2 | All sums payable by the Borrower to the Bank shall be paid without deduction for or on account of any set-off or counter-claim and free and clear of any deduction or withholding of any nature (including taxation) unless such a deduction or withholding is required by law. |
9.3 | If any amount is required by law to be deducted or withheld from any sum payable hereunder then the Borrower shall pay such an additional amount as will ensure that, after the making of such deduction or withholding, the Bank shall receive a net sum equal to the sums which the Bank would have received had no such deduction or withholding been required to be made. |
9.4 | The Borrower shall (within three Business Days of demand by the Bank) pay to the Bank an amount equal to the loss, liability or cost which the Bank determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Bank in respect of the Facility Letter. |
9.5 | Clause 9.4 above shall not apply: |
9.5.1 | with respect to any Tax assessed on the Bank under the law of the jurisdiction in which the Bank is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Bank is treated as resident for tax purposes, if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Bank; or |
9.5.2 | to the extent a loss, liability or cost is compensated for by an increased payment under Clause 9.3. |
9.6 | If the Bank makes (or intends to make) a claim under Clause 9.4 above, it shall notify the Borrower as soon as is reasonably practicable of the event which has caused (or will cause) that claim, however, the Bank’s entitlement to exercise its rights under Clause 9.4 above is not conditional on such notification being made in accordance with this Clause 9.6. |
9.7 | For the purposes of Clauses 9.4 and 9.5: |
10 | Security |
11 | Set-Off |
11.1 | In addition to any other rights to which it may be entitled the Bank may retain, set off or appropriate any credit balances in name of the Borrower (whether current or not yet due) against the Borrower’s obligations to the Bank under this Facility Letter. The Bank may exercise any of these rights without prior notice both before and after demand and in so doing may convert to sterling at the Bank Rate of Exchange any balance which is in a currency other than sterling. |
11.2 | Nothing expressed or implied in this Facility Letter or any other document in connection herewith shall be regarded as in any way negating or affecting any right which the Bank may have under applicable law to apply any credit balances to which the Borrower is entitled on any account of the Borrower in or towards satisfaction of any sum due from the Borrower hereunder. |
12 | Severance |
13 | Remedies, Waivers, Amendments and Consents |
13.1 | No failure on the part of the Bank to exercise, and no delay on its part in exercising, any right or remedy under this Facility Letter will operate as a waiver thereof, nor will any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Facility Letter are cumulative and not exclusive of any rights or remedies provided by law or otherwise. |
13.2 | Save to the extent expressly provided to the contrary in this Facility Letter a person who is not a party to this Facility Letter may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999. |
14 | Assignment and Transferability |
14.1 | The Borrower may not assign, transfer or otherwise dispose of all or any part of its rights, benefits or obligations under this Facility Letter. |
14.2 | Subject to clause 14.3 below, the Bank may, with the prior written consent of the Borrower (such consent not to be unreasonably withheld or delayed) at any time and its own cost assign, novate or transfer all or any part of its rights, benefits and obligations under this Facility Letter or grant participations therein to any one or more banks or financial institutions and the Borrower and any other party to this Facility Letter hereby agree to execute any documents required to enable the Bank so to do (provided that the Borrower and any such other party shall neither be required thereby to pay any greater amount to satisfy its obligations hereunder nor be responsible for any legal or statutory costs or duties arising therefrom) and the Borrower and any other party to this Facility Letter further agrees that the Bank may disclose any information to any such bank or financial institution for said purpose. |
14.3 | The consent of the Borrower will be deemed to have been given if: |
14.3.1 | the transfer is to an Affiliate of the Bank; |
14.3.2 | a breach of the Borrower’s obligations has occurred and is continuing; or |
14.3.3 | within 10 Business Days of receipt by the Borrower of a written application for consent, it has not been expressly refused, provided, in each case, that at the time of the proposed transfer no deduction or withholding would be required by law in respect of any payment to the transferee at such time to the extent that no deduction or withholding would have been required in respect of a payment to the Bank. |
15 | Costs and Expenses |
15.1 | The Borrower agrees that the costs and expenses, including legal fees, disbursements registration fees and value added tax thereon, incurred by the Bank in connection with the preparation, negotiation, execution and registration of this Facility Letter, and any other documents required in connection with the Facility shall be for the Borrower’s account and the Borrower hereby indemnifies the Bank in respect of payment thereof. |
15.2 | The Borrower further undertakes to reimburse and indemnify the Bank for any and all costs, interest, charges and expenses incurred by the Bank, as well after as before judgement, in connection with preserving, enforcing or seeking to preserve or enforce its rights in respect of this Facility Letter or any amendment thereto, or in connection with the granting of any approvals or consents hereunder. |
16 | Notices |
16.1 | Each notice or other communication to be given under this Facility Letter shall be given in writing in English and, unless otherwise provided, shall be made by hand, fax or letter. For the avoidance of doubt, notices shall not be validly served by e-mail. |
16.1.1 | in the case of the Borrower to its registered office; and |
16.1.2 | in the case of the Bank to the address detailed above. |
16.2 | Any notice or other communication given by any party shall be deemed to have been received: |
16.2.1 | in the case of a notice given by hand, at the time of day of actual delivery; or |
16.2.2 | if sent by fax, with a confirmed receipt of transmission from the receiving machine, on the day on which it is transmitted; or |
16.2.3 | if posted, by 10 am on the second Business Day following the day on which it was despatched by first class mail postage prepaid, |
17 | Governing Law |
1 | A copy of this Facility Letter signed by duly authorised officials accepting on behalf of the Borrower or the terms and conditions set out herein; |
2 | A Bank Mandate duly completed by or on behalf of the Borrower, together with such other documents as the Bank shall require to complete its account opening formalities and to ensure compliance with money laundering obligations; |
3 | Such form of mandate or authority as the officers of the Borrower may be empowered to issue to bankers concerning the negotiation of any money market utilisation under this Facility Letter on behalf of the Borrower and to sign and/or endorse any documents required under or in connection with this Facility Letter on behalf of the Borrower; |
4 | A copy of the Borrower’s Certificate of Incorporation; |
5 | A copy certified as true and accurate by a Director or the Secretary of the Borrower of a resolution authorising the appropriate officials to act on behalf of and to bind the Borrower in the acceptance of the terms and conditions of this Facility Letter and the execution of this Facility Letter any other necessary supporting documents ancillary thereto; and |
6 | The Bank's Fees then due. |
(a) | the interest which the Bank should have received for the period from the date of receipt of all or any part of a Drawing or any unpaid sum to the last day of the current fixed rate period in respect of that Drawing or unpaid sum, had the principal amount or unpaid sum received been paid on the Maturity Date; |
(b) | the amount which that Bank would be able to obtain by placing an amount equal to the principal amount or unpaid sum received by it on deposit with a leading bank in the relevant interbank market for a period starting on the Business Day following receipt or recovery and ending on the relevant Maturity Date |
(a) | statutes, statutory provisions and other legislation shall include all amendments, substitutions, modifications and re-enactments for the time being in force and shall include any orders, regulations, instruments or other subordinate legislation made under the relevant legislation. |
(b) | "including" shall not be construed as limiting the generality of the words preceding it; |
(c) | any clause, paragraph or schedule shall be construed as a reference to the clauses in this Facility Letter, the schedules to this Facility Letter and the paragraphs in such schedules; |
(d) | the singular shall include the plural and vice versa and words denoting any gender shall include all genders and if any party to this Facility Letter constitutes more than one person all covenants, conditions and obligations shall be deemed to be given by all such parties on a joint and several basis unless this Facility Letter specifically provides otherwise; |
(e) | this Facility Letter and to any provisions of it or to any other document referred to in this Facility Letter shall be construed as references to it in force for the time being and as amended, varied, supplemented, restated, substituted or novated from time to time; |
(f) | a person is to be construed to include references to a corporation, firm, company, partnership, joint venture, unincorporated body of persons, individual or any state or any agency of a state, whether or not a separate legal entity; |
(g) | any person is to be construed to include that person's assignees or transferees or successors in title, whether direct or indirect; |
(h) | any word or phrase includes all derivations thereof; |
(i) | a matter being in the opinion of the Bank or at the Bank's discretion shall be in the sole opinion of the Bank taking into consideration the Bank's interests hereunder and in the case of the Bank's discretion it shall be at the Bank's sole unfettered discretion without taking into consideration other party's interests. |
I. | Effective December 31, 2017, the following sections of Article 2 are amended to read as follows: |
ARTICLE II | DEFINITIONS | |||
(h) | "CLC" shall mean the Corporate Leadership Council of PPL Corporation. | |||
(i) | "Early Retirement Reduction Factor" means the percentage that appears adjacent to the Participant’s age below determined under the appropriate column. | |||
(1) | Column (1) shall apply to any Retiree unless Column (3) applies. | |||
(2) | Column (2) shall apply to any Terminated Vested Participant unless Column (3) applies. | |||
(3) | Column (3) shall apply only to the Chief Executive Officer of PPL Corporation. |
Age When Benefits Start | (1) Retiree | (2) Terminated Vested | (3) CEO Retiree |
62 61 60 59 58 57 56 55 54 53 52 51 50 49 or younger | 100 100 100 95 90 85 80 75 70 65 60 55 50 N/A | 100 100 100 90 80 70 60 50 N/A N/A N/A N/A N/A N/A | 100 95 90 85 80 75 70 65 N/A N/A N/A N/A N/A N/A |
(j) | “Good Reason” shall mean “Good Reason” or such similar concept as defined in any employment, severance, or similar agreement then in effect between the Participant and any of PPL or an Affiliated Company, or, if no such agreement containing a definition of “Good Reason” is then in effect or if such term is not defined therein, “Good Reason” shall mean without the Participant’s consent, (i) a change caused by PPL or an Affiliated Company in the Participant’s duties and responsibilities which is materially inconsistent with the Participant’s position at the applicable entity that is a member of the Affiliated Companies, (ii) a material reduction in the Participant’s annual base salary, annual incentive compensation opportunity or other employee benefits (excluding any such reduction that is part of a plan to reduce annual base salaries, annual incentive compensation opportunities or other employee benefits of comparably situated employees of any entity that is a member of the Affiliated Companies generally), or (iii) a relocation of the Participant’s current principle place of employment; provided that, notwithstanding anything to the contrary in the foregoing, the Participant shall only have “Good Reason” to terminate employment following the applicable entity’s failure to remedy the act which is alleged to constitute “Good Reason” within thirty (30) days following such entity’s receipt of written notice from the Participant specifying such act, so long as such notice is provided within sixty (60) days after such event has first occurred. | |||
(k) | "Participant" means |
(1) | any elected officer or other key employee of PPL or of a Participating Company who is hired prior to January 1, 2012, is designated as eligible in a resolution adopted by the board of directors of such Participating Company, and is approved for participation in this Plan by the CLC. | |||
(2) | any individual formerly described in Paragraph (1) who has not yet had a Termination of Employment, or any individual formerly described in Paragraph (1) who has had a Termination of Employment and is entitled to receive benefits under Article 3 of this Plan. All Participants of this Plan are listed in Appendix A. | |||
(l) | “Participating Company” means PPL Services Corporation, PPL Electric Utilities Corporation (prior to February 14, 2000, PP&L, Inc.), PPL EnergyPlus, LLC (prior to February 14, 2000, PP&L EnergyPlus Co., LLC), PPL Global, LLC, PPL Montana, LLC and each other Affiliated Company that is designated by the CLC to adopt this Plan by action of its board of directors or managers. | |||
(m) | "Plan" means this Supplemental Executive Retirement Plan, as amended from time to time. | |||
(n) | “PPL Corporation” means PPL Corporation (prior to February 14, 2000, PP&L Resources, Inc.). | |||
(o) | “Retiree” means a Participant except the Chief Executive Officer of PPL Corporation who has a Termination of Employment after: | |||
(1) | attaining age 55 and completing at least 10 Years of Service, or | |||
(2) | attaining age 60. | |||
For the Chief Executive Officer of PPL Corporation, “Retiree” means the Participant has a Termination of Employment after attaining age 55 and completing at least 10 years of Service or attaining age 62. | ||||
(p) | "Retirement Plan" means the PPL Retirement Plan, as amended from time to time. | |||
(q) | “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the final Treasury Regulations issued thereunder. | |||
(r) | "Supplemental Final Average Earnings" means the following: |
(1) | Supplemental Final Average Earnings means twelve times the average of a Participant’s “compensation” as defined in Paragraphs (A) through (B) below, from PPL and/or an Affiliated Company, for the 60 highest full months in the final 120 (or fewer) full consecutive months during which he is employed by PPL and/or an Affiliated Company. For this purpose, non-consecutive months interrupted by periods in which the Participant receives no “compensation” shall be treated as consecutive. For purposes of this Section, “compensation” shall include the following: | |||
(A) | the Participant’s base salary from PPL and/or any Affiliated Company prior to any deferrals to the Officers Deferred Compensation Plan or any other nonqualified deferred compensation plan of an Affiliated Company or any Internal Revenue Code section 401(k) plan by which Participant is covered, plus | |||
(B) | the value of any cash grants attributable to any month used in the average, awarded to Participant pursuant to the executive incentive awards program initially approved by the Board on October 25, 1989 or any similar program maintained by an Affiliated Company. For the final calendar year of employment, "Compensation" shall include an amount equal to the value of any cash grant that would have been paid for service in the final calendar year of employment, as if 100% of target goals were achieved, but prorated by multiplying by a fraction equal to the number of full calendar months of service completed divided by 12. | |||
(2) | For the purposes of determining the Participant’s “compensation” under Subsection (1) of this definition, the CLC will determine the amount of any cash grant awarded to the Participant under any incentive awards program, and prorate such amount over the year for which the award was granted. Notwithstanding the foregoing, if a Participant transfers from a Participating Company to an Affiliated Company that is not a Participating Company after becoming a Participant, earnings with the Affiliated Company after the date of such transfer (or for the duration of each such transfer if the Participant transfers more than once) shall not count in the Participant’s Supplemental Final Average Earnings. | |||
(s) | “Terminated Vested Participant” means a Participant except the Chief Executive Officer of PPL Corporation: | |||
(1) | who has a Termination of Employment after attaining age 50 but not age 55, and completing at least 10 Years of Service. |
(t) | “Termination of Employment” means the Participant’s separation from service (as such term is defined in Section 409A) from PPL and all Affiliated Companies. |
II. | Except as provided for in this Amendment No. 6, all other provisions of the Plan shall remain in full force and effect. |
PPL SERVICES CORPORATION | ||
By: | ||
Joanne H. Raphael | ||
Senior Vice President, General Counsel | ||
and Corporate Secretary |
Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 (a) | 2014 (a) | 2013 (a) | ||||||||||||||||||
Earnings, as defined: | |||||||||||||||||||||||
Income from Continuing Operations Before Income Taxes | $ | 569 | $ | 1,912 | $ | 2,550 | $ | 2,068 | $ | 2,129 | $ | 1,728 | |||||||||||
Adjustment to reflect earnings from equity method investments on a cash basis | — | 1 | (1 | ) | (1 | ) | — | — | |||||||||||||||
569 | 1,913 | 2,549 | 2,067 | 2,129 | 1,728 | ||||||||||||||||||
Total fixed charges as below | 245 | 927 | 917 | 1,054 | 1,095 | 1,096 | |||||||||||||||||
Less: | |||||||||||||||||||||||
Capitalized interest | 1 | 4 | 4 | 11 | 11 | 11 | |||||||||||||||||
Interest expense and fixed charges related to discontinued operations | — | — | — | 150 | 186 | 235 | |||||||||||||||||
Total fixed charges included in Income from Continuing Operations Before Income Taxes | 244 | 923 | 913 | 893 | 898 | 850 | |||||||||||||||||
Total earnings | $ | 813 | $ | 2,836 | $ | 3,462 | $ | 2,960 | $ | 3,027 | $ | 2,578 | |||||||||||
Fixed charges, as defined: | |||||||||||||||||||||||
Interest charges (b) | $ | 242 | $ | 912 | $ | 900 | $ | 1,038 | $ | 1,073 | $ | 1,058 | |||||||||||
Estimated interest component of operating rentals | 3 | 15 | 17 | 16 | 22 | 38 | |||||||||||||||||
Total fixed charges (c) | $ | 245 | $ | 927 | $ | 917 | $ | 1,054 | $ | 1,095 | $ | 1,096 | |||||||||||
Ratio of earnings to fixed charges (d) | 3.3 | 3.1 | 3.8 | 2.8 | 2.8 | 2.4 |
(a) | Reflects PPL's former Supply segment as Discontinued Operations. |
(b) | Includes interest on long-term and short-term debt, as well as amortization of debt discount, expense and premium - net. |
(c) | Interest on unrecognized tax benefits is not included in fixed charges. |
(d) | PPL, the parent holding company, does not have any preferred stock outstanding; therefore, the ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges. |
Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||
Earnings, as defined: | |||||||||||||||||||||||
Income Before Income Taxes | $ | 197 | $ | 575 | $ | 552 | $ | 416 | $ | 423 | $ | 317 | |||||||||||
Total fixed charges as below | 40 | 153 | 141 | 139 | 131 | 117 | |||||||||||||||||
Total earnings | $ | 237 | $ | 728 | $ | 693 | $ | 555 | $ | 554 | $ | 434 | |||||||||||
Fixed charges, as defined: | |||||||||||||||||||||||
Interest charges (a) | $ | 39 | $ | 149 | $ | 137 | $ | 135 | $ | 127 | $ | 113 | |||||||||||
Estimated interest component of operating rentals | 1 | 4 | 4 | 4 | 4 | 4 | |||||||||||||||||
Total fixed charges (b) | $ | 40 | $ | 153 | $ | 141 | $ | 139 | $ | 131 | $ | 117 | |||||||||||
Ratio of earnings to fixed charges (c) | 5.9 | 4.8 | 4.9 | 4.0 | 4.2 | 3.7 |
(a) | Includes interest on long-term and short-term debt, as well as amortization of debt discount, expense and premium - net. |
(b) | Interest on unrecognized tax benefits is not included in fixed charges. |
(c) | PPL Electric does not have any preferred stock outstanding; therefore, the ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges. |
Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||
Earnings, as defined: | |||||||||||||||||||||||
Income from Continuing Operations Before Income Taxes | $ | 181 | $ | 691 | $ | 686 | $ | 603 | $ | 553 | $ | 551 | |||||||||||
Adjustment to reflect earnings from equity method investments on a cash basis | — | 1 | (1 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||||||||
181 | 692 | 685 | 602 | 552 | 550 | ||||||||||||||||||
Total fixed charges as below | 57 | 224 | 223 | 189 | 173 | 151 | |||||||||||||||||
Total earnings | $ | 238 | $ | 916 | $ | 908 | $ | 791 | $ | 725 | $ | 701 | |||||||||||
Fixed charges, as defined: | |||||||||||||||||||||||
Interest charges (a) (b) | $ | 55 | $ | 215 | $ | 214 | $ | 181 | $ | 167 | $ | 145 | |||||||||||
Estimated interest component of operating rentals | 2 | 9 | 9 | 8 | 6 | 6 | |||||||||||||||||
Total fixed charges | $ | 57 | $ | 224 | $ | 223 | $ | 189 | $ | 173 | $ | 151 | |||||||||||
Ratio of earnings to fixed charges | 4.2 | 4.1 | 4.1 | 4.2 | 4.2 | 4.6 |
(a) | Includes interest on long-term and short-term debt, as well as amortization of loss on reacquired debt and amortization of debt discount, expense and premium - net. |
(b) | Includes a credit for amortization of a fair market value adjustment of $7 million in 2013. |
Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||
Earnings, as defined: | |||||||||||||||||||||||
Income Before Income Taxes | $ | 93 | $ | 344 | $ | 329 | $ | 299 | $ | 272 | $ | 257 | |||||||||||
Total fixed charges as below | 19 | 76 | 76 | 61 | 51 | 36 | |||||||||||||||||
Total earnings | $ | 112 | $ | 420 | $ | 405 | $ | 360 | $ | 323 | $ | 293 | |||||||||||
Fixed charges, as defined: | |||||||||||||||||||||||
Interest charges (a) (b) | $ | 18 | $ | 71 | $ | 71 | $ | 57 | $ | 49 | $ | 34 | |||||||||||
Estimated interest component of operating rentals | 1 | 5 | 5 | 4 | 2 | 2 | |||||||||||||||||
Total fixed charges | $ | 19 | $ | 76 | $ | 76 | $ | 61 | $ | 51 | $ | 36 | |||||||||||
Ratio of earnings to fixed charges | 5.9 | 5.5 | 5.3 | 5.9 | 6.3 | 8.1 |
(a) | Includes interest on long-term and short-term debt, as well as amortization of loss on reacquired debt and amortization of debt discount, expense and premium - net. |
(b) | Includes a credit for amortization of a fair market value adjustment of $7 million in 2013. |
Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||
Earnings, as defined: | |||||||||||||||||||||||
Income Before Income Taxes | $ | 111 | $ | 418 | $ | 428 | $ | 374 | $ | 355 | $ | 360 | |||||||||||
Adjustment to reflect earnings from equity method investments on a cash basis | — | 1 | (1 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||||||||
111 | 419 | 427 | 373 | 354 | 359 | ||||||||||||||||||
Total fixed charges as below | 26 | 100 | 100 | 86 | 80 | 73 | |||||||||||||||||
Total earnings | $ | 137 | $ | 519 | $ | 527 | $ | 459 | $ | 434 | $ | 432 | |||||||||||
Fixed charges, as defined: | |||||||||||||||||||||||
Interest charges (a) | $ | 25 | $ | 96 | $ | 96 | $ | 82 | $ | 77 | $ | 70 | |||||||||||
Estimated interest component of operating rentals | 1 | 4 | 4 | 4 | 3 | 3 | |||||||||||||||||
Total fixed charges | $ | 26 | $ | 100 | $ | 100 | $ | 86 | $ | 80 | $ | 73 | |||||||||||
Ratio of earnings to fixed charges | 5.3 | 5.2 | 5.3 | 5.3 | 5.4 | 5.9 |
(a) | Includes interest on long-term and short-term debt, as well as amortization of loss on reacquired debt and amortization of debt discount, expense and premium - net. |
1. | I have reviewed this quarterly report on Form 10-Q of PPL Corporation (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ William H. Spence |
William H. Spence | ||
Chairman, President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
PPL Corporation |
1. | I have reviewed this quarterly report on Form 10-Q of PPL Corporation (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Vincent Sorgi |
Vincent Sorgi | ||
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
PPL Corporation |
1. | I have reviewed this quarterly report on Form 10-Q of PPL Electric Utilities Corporation (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Gregory N. Dudkin |
Gregory N. Dudkin | ||
President | ||
(Principal Executive Officer) | ||
PPL Electric Utilities Corporation |
1. | I have reviewed this quarterly report on Form 10-Q of PPL Electric Utilities Corporation (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Marlene C. Beers |
Marlene C. Beers | ||
Controller | ||
(Principal Financial Officer) | ||
PPL Electric Utilities Corporation |
1. | I have reviewed this quarterly report on Form 10-Q of LG&E and KU Energy LLC (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Paul W. Thompson |
Paul W. Thompson | ||
Chairman of the Board, Chief Executive Officer and President | ||
(Principal Executive Officer) | ||
LG&E and KU Energy LLC |
1. | I have reviewed this quarterly report on Form 10-Q of LG&E and KU Energy LLC (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Kent W. Blake |
Kent W. Blake | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
LG&E and KU Energy LLC |
1. | I have reviewed this quarterly report on Form 10-Q of Louisville Gas and Electric Company (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Paul W. Thompson |
Paul W. Thompson | ||
Chairman of the Board, Chief Executive Officer and President | ||
(Principal Executive Officer) | ||
Louisville Gas and Electric Company |
1. | I have reviewed this quarterly report on Form 10-Q of Louisville Gas and Electric Company (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Kent W. Blake |
Kent W. Blake | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Louisville Gas and Electric Company |
1. | I have reviewed this quarterly report on Form 10-Q of Kentucky Utilities Company (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Paul W. Thompson |
Paul W. Thompson | ||
Chairman of the Board, Chief Executive Officer and President | ||
(Principal Executive Officer) | ||
Kentucky Utilities Company |
1. | I have reviewed this quarterly report on Form 10-Q of Kentucky Utilities Company (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 3, 2018 | /s/ Kent W. Blake |
Kent W. Blake | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Kentucky Utilities Company |
• | The Covered Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
• | The information contained in the Covered Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 3, 2018 | /s/ William H. Spence |
William H. Spence | ||
Chairman, President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
PPL Corporation | ||
/s/ Vincent Sorgi | ||
Vincent Sorgi | ||
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
PPL Corporation |
• | The Covered Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
• | The information contained in the Covered Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 3, 2018 | /s/ Gregory N. Dudkin |
Gregory N. Dudkin | ||
President | ||
(Principal Executive Officer) | ||
PPL Electric Utilities Corporation | ||
/s/ Marlene C. Beers | ||
Marlene C. Beers | ||
Controller | ||
(Principal Financial Officer) | ||
PPL Electric Utilities Corporation |
• | The Covered Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
• | The information contained in the Covered Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 3, 2018 | /s/ Paul W. Thompson |
Paul W. Thompson | ||
Chairman of the Board, Chief Executive Officer and President | ||
(Principal Executive Officer) | ||
LG&E and KU Energy LLC | ||
/s/ Kent W. Blake | ||
Kent W. Blake | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
LG&E and KU Energy LLC |
• | The Covered Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
• | The information contained in the Covered Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 3, 2018 | /s/ Paul W. Thompson |
Paul W. Thompson | ||
Chairman of the Board, Chief Executive Officer and President | ||
(Principal Executive Officer) | ||
Louisville Gas and Electric Company | ||
/s/ Kent W. Blake | ||
Kent W. Blake | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Louisville Gas and Electric Company |
• | The Covered Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
• | The information contained in the Covered Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 3, 2018 | /s/ Paul W. Thompson |
Paul W. Thompson | ||
Chairman of the Board, Chief Executive Officer and President | ||
(Principal Executive Officer) | ||
Kentucky Utilities Company | ||
/s/ Kent W. Blake | ||
Kent W. Blake | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Kentucky Utilities Company |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|||
Net Income | $ 452 | $ 403 | ||
Amounts arising during the period - gains (losses), net of tax (expense) benefit: | ||||
Foreign currency translation adjustments, net of tax | 116 | (24) | ||
Qualifying derivatives, net of tax | (20) | (6) | ||
Defined benefit plans: | ||||
Net actuarial gain (loss), net of tax | (1) | 0 | ||
Reclassifications from AOCI - (gains) losses, net of tax expense (benefit): | ||||
Qualifying derivatives, net of tax | 12 | (1) | ||
Defined benefit plans: | ||||
Net actuarial (gain) loss, net of tax | 36 | 32 | ||
Total other comprehensive income | 143 | 1 | ||
Comprehensive income | 595 | 404 | ||
LG And E And KU Energy LLC [Member] | ||||
Net Income | [1] | 142 | 103 | |
Defined benefit plans: | ||||
Total other comprehensive income | $ 1 | $ 2 | ||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Tax effect of foreign currency translation adjustments arising during the period | $ 0 | $ (1) |
Tax effect of qualifying derivatives arising during the period | 4 | 2 |
Tax effect of defined benefit plans - net actuarial gain (loss) arising during period | 0 | 0 |
Tax effect of qualifying derivatives reclassified from accumulated other comprehensive income (loss) | (2) | 0 |
Tax effect of net actuarial (gain) loss reclassified from accumulated other comprehensive income (loss) | (9) | (9) |
LG And E And KU Energy LLC [Member] | ||
Tax effect of defined benefit plans - net actuarial gain (loss) arising during period | 0 | 0 |
Tax effect of equity investees' other comprehensive income (loss) reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Tax effect of prior service costs reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Tax effect of net actuarial (gain) loss reclassified from accumulated other comprehensive income (loss) | $ (1) | $ (1) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
||||||
Cash Flows from Operating Activities | |||||||
Net Income | $ 452 | $ 403 | |||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 269 | 242 | |||||
Amortization | 21 | 23 | |||||
Defined benefit plans - (income) expense | (50) | (19) | |||||
Deferred income taxes and investment tax credits | 59 | 161 | |||||
Unrealized losses on derivatives, and other hedging activities | 85 | 35 | |||||
Stock-based compensation expense | 15 | 19 | |||||
Other | (3) | (1) | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (71) | (43) | |||||
Accounts payable | (36) | (84) | |||||
Unbilled revenues | 58 | 52 | |||||
Fuel, materials and supplies | 43 | 44 | |||||
Prepayments | (73) | (110) | |||||
Taxes payable | 22 | (21) | |||||
Regulatory assets and liabilities, net | 64 | (17) | |||||
Other current liabilities | (120) | (60) | |||||
Other | 23 | 22 | |||||
Other operating activities | |||||||
Defined benefit plans - funding | (150) | (520) | |||||
Other assets | (30) | 5 | |||||
Other liabilities | (12) | 4 | |||||
Net cash provided by operating activities | 566 | 135 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (750) | (677) | |||||
Expenditures for intangible assets | (7) | (3) | |||||
Other investing activities | 4 | 1 | |||||
Net cash used in investing activities | (753) | (679) | |||||
Cash Flows from Financing Activities | |||||||
Issuance of long-term debt | 144 | 64 | |||||
Issuance of common stock | 100 | 73 | |||||
Payment of common stock dividends | (273) | (258) | |||||
Net increase (decrease) in short-term debt | 369 | 744 | |||||
Other financing activities | (9) | (16) | |||||
Net cash provided by (used in) financing activities | 331 | 607 | |||||
Effect of Exchange Rate on Cash, Cash Equivalents and Restricted Cash | (2) | 3 | |||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 142 | 66 | |||||
Cash and Cash Equivalents at Beginning of Period | 485 | ||||||
Cash and Cash Equivalents at End of Period | 629 | ||||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 511 | 367 | |||||
Cash, Cash Equivalents and Restricted Cash at End of Period | 653 | 433 | |||||
Supplemental Disclosures of Cash Flow Information | |||||||
Accrued expenditures for property, plant and equipment at March 31, | 313 | 236 | |||||
Accrued expenditures for intangible assets at March 31, | 65 | 62 | |||||
PPL Electric Utilities Corp [Member] | |||||||
Cash Flows from Operating Activities | |||||||
Net Income | [1] | 148 | 79 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 85 | 75 | |||||
Amortization | 6 | 8 | |||||
Defined benefit plans - (income) expense | 2 | 5 | |||||
Deferred income taxes and investment tax credits | 21 | 41 | |||||
Other | (5) | 0 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (30) | (27) | |||||
Accounts payable | (36) | (18) | |||||
Unbilled revenues | 16 | 12 | |||||
Prepayments | (69) | (75) | |||||
Taxes payable | 4 | 0 | |||||
Regulatory assets and liabilities, net | 5 | (11) | |||||
Other | (19) | (14) | |||||
Other operating activities | |||||||
Defined benefit plans - funding | (28) | (24) | |||||
Other assets | (25) | 5 | |||||
Other liabilities | 1 | (1) | |||||
Net cash provided by operating activities | 76 | 55 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (245) | (274) | |||||
Expenditures for intangible assets | (1) | (2) | |||||
Net cash used in investing activities | (246) | (276) | |||||
Cash Flows from Financing Activities | |||||||
Net increase (decrease) in short-term debt | 213 | 204 | |||||
Contributions from parent | 0 | 100 | |||||
Payment of common stock dividends to parent | (72) | (76) | |||||
Net cash provided by (used in) financing activities | 141 | 228 | |||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (29) | 7 | |||||
Cash and Cash Equivalents at Beginning of Period | 49 | ||||||
Cash and Cash Equivalents at End of Period | 20 | ||||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 51 | 15 | |||||
Cash, Cash Equivalents and Restricted Cash at End of Period | 22 | 22 | |||||
Supplemental Disclosures of Cash Flow Information | |||||||
Accrued expenditures for property, plant and equipment at March 31, | 147 | 122 | |||||
LG And E And KU Energy LLC [Member] | |||||||
Cash Flows from Operating Activities | |||||||
Net Income | [2] | 142 | 103 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 117 | 105 | |||||
Amortization | 5 | 7 | |||||
Defined benefit plans - (income) expense | 3 | 8 | |||||
Deferred income taxes and investment tax credits | 8 | 48 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (5) | 21 | |||||
Accounts payable | 10 | (28) | |||||
Accounts payable to affiliates | 2 | 7 | |||||
Unbilled revenues | 31 | 22 | |||||
Fuel, materials and supplies | 42 | 41 | |||||
Taxes payable | 7 | (2) | |||||
Accrued interest | 42 | 42 | |||||
Other | (7) | (38) | |||||
Other operating activities | |||||||
Defined benefit plans - funding | (108) | (22) | |||||
Expenditures for asset retirement obligations | (9) | (6) | |||||
Other assets | (3) | 1 | |||||
Other liabilities | 1 | 3 | |||||
Net cash provided by operating activities | 278 | 312 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (294) | (184) | |||||
Net cash used in investing activities | (294) | (184) | |||||
Cash Flows from Financing Activities | |||||||
Net increase (decrease) in notes payable with affiliate | 12 | (81) | |||||
Issuance of long-term debt | 100 | 0 | |||||
Distributions to member | (69) | (102) | |||||
Net increase (decrease) in short-term debt | (29) | 58 | |||||
Other financing activities | (1) | (1) | |||||
Net cash provided by (used in) financing activities | 13 | (126) | |||||
Cash and Cash Equivalents, Period Increase (Decrease) | (3) | 2 | |||||
Cash and Cash Equivalents at Beginning of Period | 30 | 13 | |||||
Cash and Cash Equivalents at End of Period | 27 | 15 | |||||
Supplemental Disclosures of Cash Flow Information | |||||||
Accrued expenditures for property, plant and equipment at March 31, | 124 | 75 | |||||
Louisville Gas And Electric Co [Member] | |||||||
Cash Flows from Operating Activities | |||||||
Net Income | [1] | 72 | 54 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 48 | 44 | |||||
Amortization | 4 | 3 | |||||
Defined benefit plans - (income) expense | 1 | 2 | |||||
Deferred income taxes and investment tax credits | 7 | 31 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | 2 | 13 | |||||
Accounts receivable from affiliates | (7) | 1 | |||||
Accounts payable | 8 | (12) | |||||
Accounts payable to affiliates | (2) | (4) | |||||
Unbilled revenues | 16 | 9 | |||||
Fuel, materials and supplies | 36 | 33 | |||||
Taxes payable | (1) | (28) | |||||
Accrued interest | 13 | 13 | |||||
Other | 12 | (11) | |||||
Other operating activities | |||||||
Defined benefit plans - funding | (55) | (1) | |||||
Expenditures for asset retirement obligations | (5) | (4) | |||||
Other assets | 0 | 2 | |||||
Other liabilities | (3) | (3) | |||||
Net cash provided by operating activities | 146 | 142 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (150) | (94) | |||||
Net cash used in investing activities | (150) | (94) | |||||
Cash Flows from Financing Activities | |||||||
Issuance of long-term debt | 100 | 0 | |||||
Net increase (decrease) in short-term debt | (62) | 38 | |||||
Payment of common stock dividends to parent | (34) | (87) | |||||
Other financing activities | (1) | 0 | |||||
Net cash provided by (used in) financing activities | 3 | (49) | |||||
Cash and Cash Equivalents, Period Increase (Decrease) | (1) | (1) | |||||
Cash and Cash Equivalents at Beginning of Period | 15 | 5 | |||||
Cash and Cash Equivalents at End of Period | 14 | 4 | |||||
Supplemental Disclosures of Cash Flow Information | |||||||
Accrued expenditures for property, plant and equipment at March 31, | 75 | 34 | |||||
Kentucky Utilities Co [Member] | |||||||
Cash Flows from Operating Activities | |||||||
Net Income | [2] | 87 | 63 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 68 | 60 | |||||
Amortization | 1 | 4 | |||||
Defined benefit plans - (income) expense | 0 | 2 | |||||
Deferred income taxes and investment tax credits | 1 | 37 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | (7) | 8 | |||||
Accounts payable | 11 | (4) | |||||
Accounts payable to affiliates | 0 | (7) | |||||
Unbilled revenues | 15 | 13 | |||||
Fuel, materials and supplies | 6 | 8 | |||||
Taxes payable | 14 | (34) | |||||
Accrued interest | 22 | 22 | |||||
Other | 17 | (12) | |||||
Other operating activities | |||||||
Defined benefit plans - funding | (47) | (19) | |||||
Expenditures for asset retirement obligations | (4) | (2) | |||||
Other assets | (3) | (1) | |||||
Other liabilities | 4 | 1 | |||||
Net cash provided by operating activities | 185 | 139 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (143) | (89) | |||||
Net cash used in investing activities | (143) | (89) | |||||
Cash Flows from Financing Activities | |||||||
Net increase (decrease) in short-term debt | 33 | 20 | |||||
Payment of common stock dividends to parent | (79) | (70) | |||||
Net cash provided by (used in) financing activities | (46) | (50) | |||||
Cash and Cash Equivalents, Period Increase (Decrease) | (4) | 0 | |||||
Cash and Cash Equivalents at Beginning of Period | 15 | 7 | |||||
Cash and Cash Equivalents at End of Period | 11 | 7 | |||||
Supplemental Disclosures of Cash Flow Information | |||||||
Accrued expenditures for property, plant and equipment at March 31, | $ 48 | $ 41 | |||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Assets, Current [Abstract] | |||||||||||
Cash and cash equivalents | $ 629 | $ 485 | |||||||||
Accounts receivable (less reserve:) | |||||||||||
Customer | 760 | 681 | |||||||||
Other | 89 | 100 | |||||||||
Unbilled revenues | 489 | 543 | |||||||||
Prepayments | 139 | 66 | |||||||||
Fuel, materials and supplies | 279 | 320 | |||||||||
Price risk management assets | 56 | 49 | |||||||||
Regulatory assets | 28 | 34 | |||||||||
Other current assets | 49 | 50 | |||||||||
Total Current Assets | 2,490 | 2,294 | |||||||||
Property, Plant and Equipment | |||||||||||
Regulated utility plant | 38,891 | 38,228 | |||||||||
Less: accumulated depreciation - regulated utility plant | 7,003 | 6,785 | |||||||||
Regulated utility plant, net | 31,888 | 31,443 | |||||||||
Non-regulated property, plant and equipment | 387 | 384 | |||||||||
Less: accumulated depreciation - non-regulated property, plant and equipment | 114 | 110 | |||||||||
Non-regulated property, plant and equipment, net | 273 | 274 | |||||||||
Construction work in progress | 1,575 | 1,375 | |||||||||
Property, Plant and Equipment, net | 33,736 | 33,092 | |||||||||
Other Noncurrent Assets | |||||||||||
Regulatory assets | 1,519 | 1,504 | |||||||||
Goodwill | 3,302 | 3,258 | |||||||||
Other intangibles | 703 | 697 | |||||||||
Pension benefit asset | 378 | 284 | |||||||||
Price risk management assets | 120 | 215 | |||||||||
Other noncurrent assets | 140 | 135 | |||||||||
Total Other Noncurrent Assets | 6,162 | 6,093 | |||||||||
Total Assets | 42,388 | 41,479 | |||||||||
Current Liabilities | |||||||||||
Short-term debt | 1,457 | 1,080 | |||||||||
Long-term debt due within one year | 250 | 348 | |||||||||
Accounts payable | 836 | 924 | |||||||||
Taxes | 128 | 105 | |||||||||
Interest | 323 | 282 | |||||||||
Dividends | 285 | 273 | |||||||||
Customer deposits | 286 | 292 | |||||||||
Regulatory liabilities | 158 | 95 | |||||||||
Other current liabilities | 515 | 624 | |||||||||
Total Current Liabilities | 4,238 | 4,023 | |||||||||
Long-term Debt | |||||||||||
Long-term Debt | 20,214 | 19,847 | |||||||||
Deferred Credits and Other Noncurrent Liabilities | |||||||||||
Deferred income taxes | 2,557 | 2,462 | |||||||||
Investment tax credits | 128 | 129 | |||||||||
Accrued pension obligations | 653 | 800 | |||||||||
Asset retirement obligations | 292 | 312 | |||||||||
Regulatory liabilities | 2,689 | 2,704 | |||||||||
Other deferred credits and noncurrent liabilities | 441 | 441 | |||||||||
Total Deferred Credits and Other Noncurrent Liabilities | 6,760 | 6,848 | |||||||||
Commitments and Contingent Liabilities | |||||||||||
Equity | |||||||||||
Common stock | [1] | 7 | 7 | ||||||||
Additional paid-in capital | 10,411 | 10,305 | |||||||||
Earnings reinvested | 4,037 | 3,871 | |||||||||
Accumulated other comprehensive loss | (3,279) | (3,422) | |||||||||
Total Equity | 11,176 | 10,761 | |||||||||
Total Liabilities and Equity | 42,388 | 41,479 | |||||||||
PPL Electric Utilities Corp [Member] | |||||||||||
Assets, Current [Abstract] | |||||||||||
Cash and cash equivalents | 20 | 49 | |||||||||
Accounts receivable (less reserve:) | |||||||||||
Customer | 328 | 279 | |||||||||
Other | 10 | 71 | |||||||||
Accounts receivable from affiliates | 42 | 0 | |||||||||
Unbilled revenues | 111 | 127 | |||||||||
Prepayments | 75 | 6 | |||||||||
Fuel, materials and supplies | 34 | 34 | |||||||||
Regulatory assets | 16 | 16 | |||||||||
Other current assets | 12 | 6 | |||||||||
Total Current Assets | 648 | 588 | |||||||||
Property, Plant and Equipment | |||||||||||
Regulated utility plant | 10,950 | 10,785 | |||||||||
Less: accumulated depreciation - regulated utility plant | 2,815 | 2,778 | |||||||||
Regulated utility plant, net | 8,135 | 8,007 | |||||||||
Construction work in progress | 560 | 508 | |||||||||
Property, Plant and Equipment, net | 8,695 | 8,515 | |||||||||
Other Noncurrent Assets | |||||||||||
Regulatory assets | 726 | 709 | |||||||||
Other intangibles | 259 | 259 | |||||||||
Other noncurrent assets | 15 | 11 | |||||||||
Total Other Noncurrent Assets | 1,000 | 979 | |||||||||
Total Assets | 10,343 | 10,082 | |||||||||
Current Liabilities | |||||||||||
Short-term debt | 213 | 0 | |||||||||
Accounts payable | 362 | 386 | |||||||||
Accounts payable to affiliates | 32 | 31 | |||||||||
Taxes | 12 | 8 | |||||||||
Interest | 38 | 36 | |||||||||
Regulatory liabilities | 95 | 86 | |||||||||
Other current liabilities | 83 | 98 | |||||||||
Total Current Liabilities | 835 | 645 | |||||||||
Long-term Debt | |||||||||||
Long-term Debt | 3,298 | 3,298 | |||||||||
Deferred Credits and Other Noncurrent Liabilities | |||||||||||
Deferred income taxes | 1,184 | 1,154 | |||||||||
Accrued pension obligations | 215 | 246 | |||||||||
Regulatory liabilities | 662 | 668 | |||||||||
Other deferred credits and noncurrent liabilities | 81 | 79 | |||||||||
Total Deferred Credits and Other Noncurrent Liabilities | 2,142 | 2,147 | |||||||||
Commitments and Contingent Liabilities | |||||||||||
Equity | |||||||||||
Common stock | [2] | 364 | 364 | ||||||||
Additional paid-in capital | 2,729 | 2,729 | |||||||||
Earnings reinvested | 975 | 899 | |||||||||
Total Equity | 4,068 | 3,992 | |||||||||
Total Liabilities and Equity | 10,343 | 10,082 | |||||||||
LG And E And KU Energy LLC [Member] | |||||||||||
Assets, Current [Abstract] | |||||||||||
Cash and cash equivalents | 27 | 30 | |||||||||
Accounts receivable (less reserve:) | |||||||||||
Customer | 247 | 246 | |||||||||
Other | 41 | 44 | |||||||||
Accounts receivable from affiliates | 1 | 0 | |||||||||
Unbilled revenues | 172 | 203 | |||||||||
Prepayments | 28 | 25 | |||||||||
Fuel, materials and supplies | 212 | 254 | |||||||||
Regulatory assets | 12 | 18 | |||||||||
Other current assets | 5 | 8 | |||||||||
Total Current Assets | 745 | 828 | |||||||||
Property, Plant and Equipment | |||||||||||
Regulated utility plant | 13,226 | 13,187 | |||||||||
Less: accumulated depreciation - regulated utility plant | 1,866 | 1,785 | |||||||||
Regulated utility plant, net | 11,360 | 11,402 | |||||||||
Construction work in progress | 775 | 627 | |||||||||
Property, Plant and Equipment, net | 12,135 | 12,029 | |||||||||
Other Noncurrent Assets | |||||||||||
Regulatory assets | 793 | 795 | |||||||||
Goodwill | 996 | 996 | |||||||||
Other intangibles | 84 | 86 | |||||||||
Other noncurrent assets | 81 | 68 | |||||||||
Total Other Noncurrent Assets | 1,954 | 1,945 | |||||||||
Total Assets | 14,834 | 14,802 | |||||||||
Current Liabilities | |||||||||||
Short-term debt | 215 | 244 | |||||||||
Long-term debt due within one year | 0 | 98 | |||||||||
Notes payable with affiliates | 237 | 225 | |||||||||
Accounts payable | 292 | 338 | |||||||||
Accounts payable to affiliates | 9 | 7 | |||||||||
Taxes | 73 | 66 | |||||||||
Price risk management liabilities | 4 | 4 | |||||||||
Interest | 74 | 32 | |||||||||
Customer deposits | 59 | 58 | |||||||||
Regulatory liabilities | 63 | 9 | |||||||||
Asset retirement obligations | 91 | 85 | |||||||||
Other current liabilities | 94 | 161 | |||||||||
Total Current Liabilities | 1,211 | 1,327 | |||||||||
Long-term Debt | |||||||||||
Long-term debt | 4,859 | 4,661 | |||||||||
Long-term debt to affiliate | 400 | 400 | |||||||||
Long-term Debt | 5,259 | 5,061 | |||||||||
Deferred Credits and Other Noncurrent Liabilities | |||||||||||
Deferred income taxes | 882 | 866 | |||||||||
Investment tax credits | 128 | 129 | |||||||||
Accrued pension obligations | 265 | 365 | |||||||||
Asset retirement obligations | 249 | 271 | |||||||||
Regulatory liabilities | 2,027 | 2,036 | |||||||||
Price risk management liabilities | 18 | 22 | |||||||||
Other deferred credits and noncurrent liabilities | 158 | 162 | |||||||||
Total Deferred Credits and Other Noncurrent Liabilities | 3,727 | 3,851 | |||||||||
Commitments and Contingent Liabilities | |||||||||||
Equity | |||||||||||
Member's Equity | 4,637 | 4,563 | |||||||||
Total Liabilities and Equity | 14,834 | 14,802 | |||||||||
Louisville Gas And Electric Co [Member] | |||||||||||
Assets, Current [Abstract] | |||||||||||
Cash and cash equivalents | 14 | 15 | |||||||||
Accounts receivable (less reserve:) | |||||||||||
Customer | 111 | 116 | |||||||||
Other | 14 | 13 | |||||||||
Accounts receivable from affiliates | 31 | 24 | |||||||||
Unbilled revenues | 75 | 91 | |||||||||
Prepayments | 12 | 11 | |||||||||
Fuel, materials and supplies | 95 | 131 | |||||||||
Regulatory assets | 10 | 12 | |||||||||
Other current assets | 1 | 3 | |||||||||
Total Current Assets | 363 | 416 | |||||||||
Property, Plant and Equipment | |||||||||||
Regulated utility plant | 5,597 | 5,587 | |||||||||
Less: accumulated depreciation - regulated utility plant | 646 | 614 | |||||||||
Regulated utility plant, net | 4,951 | 4,973 | |||||||||
Construction work in progress | 401 | 305 | |||||||||
Property, Plant and Equipment, net | 5,352 | 5,278 | |||||||||
Other Noncurrent Assets | |||||||||||
Regulatory assets | 406 | 411 | |||||||||
Goodwill | 389 | 389 | |||||||||
Other intangibles | 51 | 53 | |||||||||
Other noncurrent assets | 26 | 12 | |||||||||
Total Other Noncurrent Assets | 872 | 865 | |||||||||
Total Assets | 6,587 | 6,559 | |||||||||
Current Liabilities | |||||||||||
Short-term debt | 137 | 199 | |||||||||
Long-term debt due within one year | 0 | 98 | |||||||||
Accounts payable | 170 | 179 | |||||||||
Accounts payable to affiliates | 21 | 23 | |||||||||
Taxes | 24 | 25 | |||||||||
Price risk management liabilities | 4 | 4 | |||||||||
Interest | 24 | 11 | |||||||||
Customer deposits | 28 | 27 | |||||||||
Regulatory liabilities | 29 | 3 | |||||||||
Asset retirement obligations | 19 | 24 | |||||||||
Other current liabilities | 34 | 52 | |||||||||
Total Current Liabilities | 490 | 645 | |||||||||
Long-term Debt | |||||||||||
Long-term Debt | 1,808 | 1,611 | |||||||||
Deferred Credits and Other Noncurrent Liabilities | |||||||||||
Deferred income taxes | 582 | 572 | |||||||||
Investment tax credits | 35 | 35 | |||||||||
Accrued pension obligations | 0 | 45 | |||||||||
Asset retirement obligations | 92 | 97 | |||||||||
Regulatory liabilities | 912 | 919 | |||||||||
Price risk management liabilities | 18 | 22 | |||||||||
Other deferred credits and noncurrent liabilities | 85 | 86 | |||||||||
Total Deferred Credits and Other Noncurrent Liabilities | 1,724 | 1,776 | |||||||||
Commitments and Contingent Liabilities | |||||||||||
Equity | |||||||||||
Common stock | [3] | 424 | 424 | ||||||||
Additional paid-in capital | 1,712 | 1,712 | |||||||||
Earnings reinvested | 429 | 391 | |||||||||
Total Equity | 2,565 | 2,527 | |||||||||
Total Liabilities and Equity | 6,587 | 6,559 | |||||||||
Kentucky Utilities Co [Member] | |||||||||||
Assets, Current [Abstract] | |||||||||||
Cash and cash equivalents | 11 | 15 | |||||||||
Accounts receivable (less reserve:) | |||||||||||
Customer | 136 | 130 | |||||||||
Other | 26 | 30 | |||||||||
Unbilled revenues | 97 | 112 | |||||||||
Prepayments | 14 | 14 | |||||||||
Fuel, materials and supplies | 117 | 123 | |||||||||
Regulatory assets | 2 | 6 | |||||||||
Other current assets | 4 | 5 | |||||||||
Total Current Assets | 407 | 435 | |||||||||
Property, Plant and Equipment | |||||||||||
Regulated utility plant | 7,620 | 7,592 | |||||||||
Less: accumulated depreciation - regulated utility plant | 1,218 | 1,170 | |||||||||
Regulated utility plant, net | 6,402 | 6,422 | |||||||||
Construction work in progress | 373 | 321 | |||||||||
Property, Plant and Equipment, net | 6,775 | 6,743 | |||||||||
Other Noncurrent Assets | |||||||||||
Regulatory assets | 387 | 384 | |||||||||
Goodwill | 607 | 607 | |||||||||
Other intangibles | 33 | 33 | |||||||||
Other noncurrent assets | 67 | 52 | |||||||||
Total Other Noncurrent Assets | 1,094 | 1,076 | |||||||||
Total Assets | 8,276 | 8,254 | |||||||||
Current Liabilities | |||||||||||
Short-term debt | 78 | 45 | |||||||||
Accounts payable | 109 | 137 | |||||||||
Accounts payable to affiliates | 54 | 53 | |||||||||
Taxes | 33 | 19 | |||||||||
Interest | 38 | 16 | |||||||||
Customer deposits | 31 | 31 | |||||||||
Regulatory liabilities | 34 | 6 | |||||||||
Asset retirement obligations | 72 | 61 | |||||||||
Other current liabilities | 30 | 46 | |||||||||
Total Current Liabilities | 479 | 414 | |||||||||
Long-term Debt | |||||||||||
Long-term Debt | 2,329 | 2,328 | |||||||||
Deferred Credits and Other Noncurrent Liabilities | |||||||||||
Deferred income taxes | 696 | 691 | |||||||||
Investment tax credits | 93 | 94 | |||||||||
Accrued pension obligations | 0 | 36 | |||||||||
Asset retirement obligations | 157 | 174 | |||||||||
Regulatory liabilities | 1,115 | 1,117 | |||||||||
Other deferred credits and noncurrent liabilities | 42 | 43 | |||||||||
Total Deferred Credits and Other Noncurrent Liabilities | 2,103 | 2,155 | |||||||||
Commitments and Contingent Liabilities | |||||||||||
Equity | |||||||||||
Common stock | [4] | 308 | 308 | ||||||||
Additional paid-in capital | 2,616 | 2,616 | |||||||||
Earnings reinvested | 441 | 433 | |||||||||
Total Equity | 3,365 | 3,357 | |||||||||
Total Liabilities and Equity | $ 8,276 | $ 8,254 | |||||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Receivables, Net, Current [Abstract] | ||
Accounts receivable reserve for doubtful accounts | $ 56 | $ 51 |
Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 1,560,000 | 1,560,000 |
Common stock shares issued (in shares) | 697,383 | 693,398 |
Common stock shares outstanding (in shares) | 697,383 | 693,398 |
PPL Electric Utilities Corp [Member] | ||
Receivables, Net, Current [Abstract] | ||
Accounts receivable reserve for doubtful accounts | $ 27 | $ 24 |
Equity | ||
Common stock, no par value (in dollars per share) | $ 0.00 | $ 0.00 |
Common stock shares authorized (in shares) | 170,000 | 170,000 |
Common stock shares issued (in shares) | 66,368 | 66,368 |
Common stock shares outstanding (in shares) | 66,368 | 66,368 |
LG And E And KU Energy LLC [Member] | ||
Receivables, Net, Current [Abstract] | ||
Accounts receivable reserve for doubtful accounts | $ 26 | $ 25 |
Louisville Gas And Electric Co [Member] | ||
Receivables, Net, Current [Abstract] | ||
Accounts receivable reserve for doubtful accounts | $ 1 | $ 1 |
Equity | ||
Common stock, no par value (in dollars per share) | $ 0.00 | $ 0.00 |
Common stock shares authorized (in shares) | 75,000 | 75,000 |
Common stock shares issued (in shares) | 21,294 | 21,294 |
Common stock shares outstanding (in shares) | 21,294 | 21,294 |
Kentucky Utilities Co [Member] | ||
Receivables, Net, Current [Abstract] | ||
Accounts receivable reserve for doubtful accounts | $ 2 | $ 1 |
Equity | ||
Common stock, no par value (in dollars per share) | $ 0.00 | $ 0.00 |
Common stock shares authorized (in shares) | 80,000 | 80,000 |
Common stock shares issued (in shares) | 37,818 | 37,818 |
Common stock shares outstanding (in shares) | 37,818 | 37,818 |
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Millions |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Earnings Reinvested [Member] |
Accumulated Other Comprehensive Loss [Member] |
PPL Electric Utilities Corp [Member] |
PPL Electric Utilities Corp [Member]
Common Stock [Member]
|
PPL Electric Utilities Corp [Member]
Additional Paid-in Capital [Member]
|
PPL Electric Utilities Corp [Member]
Earnings Reinvested [Member]
|
LG And E And KU Energy LLC [Member] |
Louisville Gas And Electric Co [Member] |
Louisville Gas And Electric Co [Member]
Common Stock [Member]
|
Louisville Gas And Electric Co [Member]
Additional Paid-in Capital [Member]
|
Louisville Gas And Electric Co [Member]
Earnings Reinvested [Member]
|
Kentucky Utilities Co [Member] |
Kentucky Utilities Co [Member]
Common Stock [Member]
|
Kentucky Utilities Co [Member]
Additional Paid-in Capital [Member]
|
Kentucky Utilities Co [Member]
Earnings Reinvested [Member]
|
Kentucky Utilities Co [Member]
Accumulated Other Comprehensive Loss [Member]
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at beginning of period - shares at Dec. 31, 2016 | 679,731 | [1] | 66,368 | [2] | 21,294 | [3] | 37,818 | [4] | ||||||||||||||||||||||||||||||||
Balance at beginning of period at Dec. 31, 2016 | $ 9,899 | $ 7 | $ 9,841 | $ 3,829 | $ (3,778) | $ 3,391 | $ 364 | $ 2,154 | $ 873 | $ 2,476 | $ 424 | $ 1,682 | $ 370 | $ 3,323 | $ 308 | $ 2,616 | $ 400 | $ (1) | ||||||||||||||||||||||
Balance at beginning of period at Dec. 31, 2016 | $ 4,667 | |||||||||||||||||||||||||||||||||||||||
Common stock shares issued | [1] | 2,696 | ||||||||||||||||||||||||||||||||||||||
Common stock issued | 97 | 97 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | (21) | (21) | ||||||||||||||||||||||||||||||||||||||
Net Income | 403 | 403 | 79 | [5] | 79 | 103 | [6] | 54 | [5] | 54 | 63 | [6] | 63 | |||||||||||||||||||||||||||
Capital contributions from parent | 100 | 100 | ||||||||||||||||||||||||||||||||||||||
Dividends and dividend equivalents | (270) | (270) | ||||||||||||||||||||||||||||||||||||||
Dividends declared on common stock | (76) | (76) | (87) | (87) | (70) | (70) | ||||||||||||||||||||||||||||||||||
Distributions to member | (102) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 1 | 1 | 2 | 1 | 1 | |||||||||||||||||||||||||||||||||||
Balance at end of period - shares at Mar. 31, 2017 | 682,427 | [1] | 66,368 | [2] | 21,294 | [3] | 37,818 | [4] | ||||||||||||||||||||||||||||||||
Balance at end of period at Mar. 31, 2017 | $ 10,109 | $ 7 | 9,917 | 3,962 | (3,777) | $ 3,494 | $ 364 | 2,254 | 876 | $ 2,443 | $ 424 | 1,682 | 337 | $ 3,317 | $ 308 | 2,616 | 393 | 0 | ||||||||||||||||||||||
Balance at end of period at Mar. 31, 2017 | 4,670 | |||||||||||||||||||||||||||||||||||||||
Balance at beginning of period - shares at Dec. 31, 2017 | 693,398 | 693,398 | [1] | 66,368 | 66,368 | [2] | 21,294 | 21,294 | [3] | 37,818 | 37,818 | [4] | ||||||||||||||||||||||||||||
Balance at beginning of period at Dec. 31, 2017 | $ 10,761 | $ 7 | 10,305 | 3,871 | (3,422) | $ 3,992 | $ 364 | 2,729 | 899 | $ 2,527 | $ 424 | 1,712 | 391 | $ 3,357 | $ 308 | 2,616 | 433 | 0 | ||||||||||||||||||||||
Balance at beginning of period at Dec. 31, 2017 | 4,563 | |||||||||||||||||||||||||||||||||||||||
Common stock shares issued | [1] | 3,985 | ||||||||||||||||||||||||||||||||||||||
Common stock issued | 115 | 115 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | (9) | (9) | ||||||||||||||||||||||||||||||||||||||
Net Income | 452 | 452 | 148 | [5] | 148 | 142 | [6] | 72 | [5] | 72 | 87 | [6] | 87 | |||||||||||||||||||||||||||
Dividends and dividend equivalents | (286) | (286) | ||||||||||||||||||||||||||||||||||||||
Dividends declared on common stock | $ (72) | (72) | $ (34) | (34) | $ (79) | (79) | ||||||||||||||||||||||||||||||||||
Distributions to member | (69) | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | $ 143 | 143 | 1 | |||||||||||||||||||||||||||||||||||||
Balance at end of period - shares at Mar. 31, 2018 | 697,383 | 697,383 | [1] | 66,368 | 66,368 | [2] | 21,294 | 21,294 | [3] | 37,818 | 37,818 | [4] | ||||||||||||||||||||||||||||
Balance at end of period at Mar. 31, 2018 | $ 11,176 | $ 7 | $ 10,411 | $ 4,037 | $ (3,279) | $ 4,068 | $ 364 | $ 2,729 | $ 975 | $ 2,565 | $ 424 | $ 1,712 | $ 429 | $ 3,365 | $ 308 | $ 2,616 | $ 441 | $ 0 | ||||||||||||||||||||||
Balance at end of period at Mar. 31, 2018 | $ 4,637 | |||||||||||||||||||||||||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical) |
3 Months Ended |
---|---|
Mar. 31, 2018
vote
| |
Vote per share of PPL's common stock | 1 |
Interim Financial Statements |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Interim Financial Statements [Abstract] | |
Interim Financial Statements | 1. Interim Financial Statements (All Registrants) Capitalized terms and abbreviations appearing in the unaudited combined notes to condensed financial statements are defined in the glossary. Dollars are in millions, except per share data, unless otherwise noted. The specific Registrant to which disclosures are applicable is identified in parenthetical headings in italics above the applicable disclosure or within the applicable disclosure for each Registrants' related activities and disclosures. Within combined disclosures, amounts are disclosed for any Registrant when significant. The accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all of the information and footnote disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation in accordance with GAAP are reflected in the condensed financial statements. All adjustments are of a normal recurring nature, except as otherwise disclosed. Each Registrant's Balance Sheet at December 31, 2017 is derived from that Registrant's 2017 audited Balance Sheet. The financial statements and notes thereto should be read in conjunction with the financial statements and notes contained in each Registrant's 2017 Form 10-K. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year ending December 31, 2018 or other future periods, because results for interim periods can be disproportionately influenced by various factors, developments and seasonal variations. |
Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (All Registrants) The following accounting policy disclosures represent updates to Note 1 in each indicated Registrant's 2017 Form 10-K and should be read in conjunction with those disclosures. New Accounting Guidance Adopted (All Registrants) Accounting for Revenue from Contracts with Customers Effective January 1, 2018, the Registrants adopted accounting guidance that establishes a comprehensive new model for the recognition of revenue from contracts with customers. This model is based on the core principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Registrants adopted this guidance using the modified retrospective transition method. No cumulative effect adjustment was required as of the January 1, 2018 adoption date. The adoption of this guidance did not have a material impact on the Registrants' revenue recognition policies. See Note 4 for the required disclosures as a result of the adoption of this standard. Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Effective January 1, 2018, the Registrants adopted accounting guidance that changes the income statement presentation of net periodic benefit cost. Retrospectively, this guidance requires the service cost component to be disaggregated from other components of net benefit cost and presented in the same income statement line items as other employee compensation costs arising from services rendered during the period. The other components of net periodic benefits are presented separately from the line items that include the service cost and outside of any subtotal of operating income. Prospectively, the guidance limits the capitalization to the service cost component of net periodic benefit costs. For PPL, the non-service cost components of net periodic benefit costs are in a net credit position for the three months ended March 31, 2018. The non-service cost credits that would have been capitalized under previous guidance, but are now recorded as income within "Other Income (Expense) - net," were $5 million ($4 million after-tax or $0.01 per share) for the three months ended March 31, 2018. For PPL Electric, LG&E and KU, non-service costs or credits that would have been capitalized under previous guidance are now recognized as a regulatory asset or regulatory liability, as applicable, in accordance with regulatory approvals. The following provides the non-service cost components of net periodic benefits (costs) or credits presented in "Other Income (Expense) - net" in 2018 and reclassified from "Other operation and maintenance" to "Other Income (Expense) - net" in 2017 on the Statements of Income as a result of the adoption.
PPL and PPL Electric elected to use the practical expedient that permits using the amounts disclosed in the defined benefit plan note for the prior comparative period as the estimation basis for applying the retrospective presentation requirements. Presentation of Restricted Cash in the Statement of Cash Flows (PPL and PPL Electric) Effective January 1, 2018, PPL and PPL Electric adopted accounting guidance that changes the cash flow statement presentation of restricted cash. Under the new guidance, amounts considered restricted cash are presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts on the Statements of Cash Flows. The guidance requires a reconciliation of the total cash, cash equivalents and restricted cash from the Statement of Cash Flows to amounts on the Balance Sheets and disclosure of the nature of the restrictions. PPL and PPL Electric have applied this guidance on a retrospective basis for all periods presented. The adoption of this guidance did not have a material impact on the Statements of Cash Flows. Reconciliation of Cash, Cash Equivalents and Restricted Cash The following provides a reconciliation of Cash, Cash Equivalents and Restricted Cash reported within the Balance Sheets that sum to the total of the same amounts shown on the Statements of Cash Flows:
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Segment and Related Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Related Information | 3. Segment and Related Information (PPL) See Note 2 in PPL's 2017 Form 10-K for a discussion of reportable segments and related information. Income Statement data for the segments and reconciliation to PPL's consolidated results for the periods ended March 31 are as follows:
The following provides Balance Sheet data for the segments and reconciliation to PPL's consolidated results as of:
(PPL Electric, LKE, LG&E and KU) PPL Electric has two operating segments that are aggregated into a single reportable segment. LKE, LG&E and KU are individually single operating and reportable segments. |
Revenue from Contracts with Customers |
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Revenue from Contracts with Customers | 4. Revenue from Contracts with Customers (All Registrants) The following is a description of the principal activities from which the Registrants and PPL’s segments generate their revenues. U.K. Regulated Segment Revenue (PPL) The U.K. Regulated Segment generates revenues from contracts with customers primarily from WPD’s DUoS operations. DUoS revenues result from WPD charging licensed third-party energy suppliers for their use of WPD’s distribution systems to deliver energy to their customers. WPD satisfies its performance obligation and DUoS revenue is recognized over-time as electricity is delivered. The amount of revenue recognized is the volume of electricity delivered during the period multiplied by a per-unit energy tariff, plus fixed charges. This method of recognition fairly presents WPD's transfer of electric service to the customer as the calculation is based on actual volumes, and the tariff rate is set by WPD using a methodology prescribed by Ofgem. Customers are billed monthly and outstanding amounts are typically due within 14 days of the invoice date. DUoS customers are “at will” customers of WPD with no term contract and no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with WPD’s DUoS contracts. Pennsylvania Regulated Segment Revenue (PPL and PPL Electric) The Pennsylvania Regulated Segment generates substantially all of its revenues from contracts with customers from PPL Electric’s tariff-based distribution and transmission of electricity. Distribution Revenue PPL Electric provides distribution services to residential, commercial, industrial, municipal and governmental end users of energy. PPL Electric satisfies its performance obligation to its distribution customers and revenue is recognized over-time as electricity is delivered and simultaneously consumed by the customer. The amount of revenue recognized is the volume of electricity delivered during the period multiplied by a per-unit of energy tariff, plus a monthly fixed charge. This method of recognition fairly presents PPL Electric's transfer of electric service to the customer as the calculation is based on actual volumes, and the per-unit of energy tariff rate and the monthly fixed charge are set by the PUC. Customers are typically billed monthly and outstanding amounts are typically due within 21 days of the date of the bill. Distribution customers are "at will" customers of PPL Electric with no term contract and no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with PPL Electric’s retail account contracts. Transmission Revenue PPL Electric generates transmission revenues from a FERC-approved PJM Open Access Transmission Tariff. An annual revenue requirement for PPL Electric to provide transmission services is calculated using a formula-based rate. This revenue requirement is converted into a daily rate (dollars per day). PPL Electric satisfies its performance obligation to provide transmission services and revenue is recognized over-time as transmission services are provided and consumed. This method of recognition fairly presents PPL Electric's transfer of transmission services as the daily rate is set by a FERC approved formula-based rate. PJM remits payment on a weekly basis. PPL Electric's agreement to provide transmission services contains no minimum purchase commitment. The performance obligation is limited to the service requested and received to date. Accordingly, PPL Electric has no unsatisfied performance obligations. Kentucky Regulated Segment Revenue (PPL, LKE, LG&E and KU) The Kentucky Regulated Segment generates substantially all of its revenues from contracts with customers primarily from LG&E's and KU's regulated tariff-based sales of electricity and LG&E's regulated tariff-based sales of natural gas. LG&E and KU are engaged in the generation, transmission, distribution and sale of electricity in Kentucky and, in KU's case, Virginia. LG&E also engages in the distribution and sale of natural gas in Kentucky. Revenue from these activities is generated from tariffs approved by applicable regulatory authorities including the FERC, KPSC and VSCC. LG&E and KU satisfy their performance obligations upon LG&E's and KU's delivery of electricity and LG&E's delivery of natural gas to customers. This revenue is recognized over-time as the customer simultaneously receives and consumes the benefits provided by LG&E and KU. The amount of revenue recognized is the billed volume of electricity or natural gas delivered multiplied by a tariff rate per-unit of energy, plus any applicable fixed charges or additional regulatory mechanisms. Customers are billed monthly and outstanding amounts are typically due within 22 days of the date of the bill. Additionally, unbilled revenues are recognized as a result of customers' bills rendered throughout the month, rather than bills being rendered at the end of the month. Unbilled revenues for a month are calculated by multiplying an estimate of unbilled kWh or Mcf delivered but not yet billed by the estimated average cents per kWh or Mcf. Any difference between estimated and actual revenues is adjusted the following month when the previous unbilled estimate is reversed and actual billings occur. This method of recognition fairly presents LG&E's and KU's transfer of electricity and LG&E's transfer of natural gas to the customer as the amount recognized is based on actual or estimated volumes delivered and the tariff rate per-unit of energy and any applicable fixed charges or regulatory mechanisms as set by the respective regulatory body. LG&E's and KU's customers primarily have no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with these customers. (All Registrants) The following table reconciles "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the period ended March 31, 2018.
As discussed in Note 3, PPL's segments are segmented by geographic location. Revenues from external customers for each segment/geographic location are reconciled to revenues from contracts with customers in the table above. For PPL Electric, revenues from contracts with customers are further disaggregated by distribution and transmission, which were $532 million and $105 million for the three months ended March 31, 2018. The following table shows revenues from contracts with customers disaggregated by customer class for the period ended March 31, 2018.
Contract receivables from customers are primarily included in "Account receivable - Customer" and "Unbilled revenues" on the Balance Sheets. The following table shows the accounts receivable balances that were impaired for the period ended March 31, 2018.
The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers.
Contract liabilities result from recording contractual billings in advance for customer attachments to the Registrants' infrastructure and payments received in excess of revenues earned to date. Advanced billings for customer attachments are recognized as revenue ratably over the billing period. Payments received in excess of revenues earned to date are recognized as revenue as electricity is delivered in subsequent periods. |
Earnings Per Share |
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Earnings Per Share | 5. Earnings Per Share (PPL) Basic EPS is computed by dividing income available to PPL common shareowners by the weighted-average number of common shares outstanding during the applicable period. Diluted EPS is computed by dividing income available to PPL common shareowners by the weighted-average number of common shares outstanding, increased by incremental shares that would be outstanding if potentially dilutive non-participating securities were converted to common shares as calculated using the Treasury Stock Method. Incremental non-participating securities that have a dilutive impact are detailed in the table below. Reconciliations of the amounts of income and shares of PPL common stock (in thousands) for the periods ended March 31 used in the EPS calculation are:
For the periods ended March 31, PPL issued common stock related to stock-based compensation plans and the DRIP as follows (in thousands):
See Note 8 for additional information on common stock issued under the ATM Program. For the periods ended March 31, the following shares (in thousands) were excluded from the computations of diluted EPS because the effect would have been antidilutive.
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Income Taxes |
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Income Taxes | 6. Income Taxes Reconciliations of income taxes for the periods ended March 31 are as follows.
Kentucky Tax Reform (All Registrants) On April 14, 2018, the Kentucky House of Representatives and Kentucky Senate passed House Bill 487 (HB 487). HB 487 provides for significant changes to the Kentucky tax code including (1) adopting mandatory combined reporting for corporate members of unitary business groups for taxable years beginning on or after January 1, 2019 (members of a unitary business group may make an eight-year binding election to file consolidated corporate income tax returns with all members of their federal affiliated group) and (2) a reduction in the Kentucky corporate income tax rate from 6% to 5% for taxable years beginning after December 31, 2017. HB 487 became law on April 27, 2018. LKE continues to evaluate the impacts of Kentucky tax reform, but expects to incur a deferred tax charge of approximately $9 million in the second quarter of 2018 associated with the remeasurement of accumulated deferred income tax balances. As indicated in Note 1 in the Registrants' 2017 Form 10-K, LG&E’s and KU’s accounting for income taxes is impacted by rate regulation. Therefore, reductions in accumulated deferred income tax balances due to the reduction in the Kentucky corporate income tax rate to 5% under the provisions of HB 487 may result in amounts previously collected from utility customers for these deferred taxes to be refundable to such customers over a period of time. LG&E and KU currently estimate the impact of the reduced tax rate, related to the remeasurement of deferred income taxes, to be an increase in regulatory liabilities of $16 million and $19 million. LG&E and KU continue to evaluate other impacts of Kentucky tax reform along with the associated regulatory considerations. PPL is evaluating the impact, if any, of unitary or elective consolidated income tax reporting on all its Registrants. |
Utility Rate Regulation |
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Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Utility Rate Regulation | 7. Utility Rate Regulation (All Registrants) The following table provides information about the regulatory assets and liabilities of cost-based rate-regulated utility operations.
Regulatory Matters Kentucky Activities (PPL, LKE, LG&E and KU) CPCN Filing On January 10, 2018, LG&E and KU filed an application for a CPCN with the KPSC requesting approval to implement Advanced Metering Systems across their Kentucky service territories, including gas operations for LG&E. The full deployment is expected to be completed in 2021 with estimated capital costs of $155 million and $104 million for KU and LG&E electric service and $62 million for LG&E gas service. The full Advanced Metering Systems deployment is expected to result in incremental operation and maintenance costs during the deployment phase of $17 million and $11 million for KU and LG&E electric service and $3 million for LG&E gas service. TCJA Impact on LG&E and KU Rates On December 21, 2017, Kentucky Industrial Utility Customers, Inc. submitted a complaint with the KPSC against LG&E and KU, as well as other utility companies in Kentucky, alleging that their respective rates would no longer be fair, just and reasonable following the enactment of the TCJA reducing the federal corporate tax rate from 35% to 21%. The complaint requested the KPSC to issue an order requiring LG&E and KU to begin deferring, as of January 1, 2018, the revenue requirement effect of all income tax expense savings resulting from the federal corporate income tax reduction, including the amortization of excess deferred income taxes by recording those savings in a regulatory liability account and establishing a process by which the federal corporate income tax savings will be passed back to customers. On January 29, 2018, LG&E, KU, Kentucky Industrial Utility Customers, Inc. and the Office of the Attorney General reached a settlement agreement to commence returning savings related to the TCJA to their customers. The savings will be distributed through their ECR, DSM and LG&E's GLT rate mechanisms beginning in March 2018 and through a new bill credit mechanism from April 1, 2018 through April 30, 2019. The estimated impact of the rate reduction represents approximately $91 million in KU electricity revenues ($70 million through the new bill credit and $21 million through existing rate mechanisms), $69 million in LG&E electricity revenues ($49 million through the new bill credit and $20 million through existing rate mechanisms) and $17 million in LG&E gas revenues (substantially all through the new bill credit) for the period January 2018 through April 2019. Ongoing tax savings are expected to also be addressed in LG&E's and KU's next Kentucky base rate case. LG&E and KU have indicated their intent to file an application for base rate changes during 2018 to be effective during spring 2019. On March 20, 2018, the KPSC issued an order approving, with certain modifications, the settlement agreement reached between LG&E, KU, Kentucky Industrial Utility Customers, Inc. and the Office of the Attorney General. The KPSC estimates that, pursuant to its modifications, electricity revenues would incorporate reductions of approximately $108 million for KU ($87 million through the new bill credit and $21 million through existing rate mechanisms) and $79 million for LG&E ($59 million through the new bill credit and $20 million through existing rate mechanisms). This represents $27 million ($17 million at KU and $10 million at LG&E) in additional reductions from the amounts proposed by the settlement. The KPSC's modifications to the settlement include certain changes in assumptions or inputs used in assessing tax reform or calculating LG&E's and KU's electricity rates. LG&E gas rate reductions were not modified significantly from the amount included in the settlement agreement. On March 26, 2018, LG&E and KU filed a petition for reconsideration and request for hearing with the KPSC, taking exception to the KPSC's modifications and the process, and also requested certain relief from implementing the amounts represented by the additional reductions until the matter is fully resolved. On March 28, 2018, the Office of the Attorney General filed a response to the petition and gave notice of its withdrawal from the settlement agreement. On March 28, 2018, the KPSC issued an Order granting LG&E's and KU's request for reconsideration and amending its March 20, 2018 Order by suspending the approved rates, allowing LG&E and KU, on an interim basis, to return savings related to the TCJA at the rates agreed to in the January 29, 2018 settlement. On March 30, 2018, following receipt of the Attorney General's response, the KPSC issued an Order amending its March 28, 2018 Order to allow the parties to raise any relevant issue related to the TCJA. A hearing on this matter is scheduled for May 24, 2018. LG&E and KU cannot predict the outcome of these proceedings. Additionally, on January 8, 2018, the VSCC ordered KU, as well as other utilities in Virginia, to accrue regulatory liabilities reflecting the Virginia jurisdictional revenue requirement impacts of the reduced federal corporate tax rate. On March 22, 2018, KU reached a settlement agreement regarding its ongoing rate case in Virginia. New rates, inclusive of TCJA impacts, will be effective June 1, 2018. The settlement also stipulates that actual tax savings for the five month period prior to new rates taking effect will be addressed through KU's annual information filing for calendar year 2018. The settlement agreement is subject to review and approval by the VSCC. On April 16, 2018, the hearing examiner issued a report recommending that the VSCC approve the settlement agreement. The TCJA and rate case are not expected to have a significant impact on KU's financial condition or results of operations related to Virginia. On March 15, 2018, the FERC issued a Notice of Inquiry seeking information on whether and how it should address changes relating to accumulated deferred income taxes and bonus depreciation resulting from passage of the TCJA on FERC-jurisdictional rates. LG&E and KU have not made any submission in response to the Notice of Inquiry, but do not anticipate the impact of the TCJA related to their FERC-jurisdictional rates to be significant. Gas Franchise (LKE and LG&E) LG&E’s gas franchise agreement for the Louisville/Jefferson County service area expired in March 2016. In August 2016, LG&E and Louisville/Jefferson County entered into a revised franchise agreement with a 5-year term (with renewal options). The franchise fee may be modified at Louisville/Jefferson County's election upon 60 days' notice. However, any franchise fee is capped at 3% of gross receipts for natural gas service within the franchise area. The agreement further provides that if the KPSC determines that the franchise fee should be recovered from LG&E's Louisville/Jefferson county customers in the franchise areas as a separate line item on their bill, the franchise fee will revert to zero. In August 2016, LG&E filed an application requesting the KPSC to review and rule upon the recoverability of the franchise fee. On March 14, 2018, the KPSC issued an order authorizing the franchise fee to be recovered only from LG&E's Louisville/Jefferson County customers in the franchise area. As a result, the franchise fee will continue to be zero in accordance with the terms of the August 2016, 5-year gas franchise agreement. (PPL and PPL Electric) Pennsylvania Activities TCJA Impact on PPL Electric Rates The PUC issued a Secretarial Letter on February 12, 2018 regarding the TCJA, requesting certain information from regulated utilities and inviting comment from interested parties on potential revision to customer rates as a result of enactment of the TCJA. PPL Electric submitted its response to the Secretarial Letter on March 9, 2018. On March 15, 2018, the PUC issued a Temporary Rates Order which will remain in effect for up to six months and may be extended for an additional six months. The PUC anticipates that the process to determine the manner in which rates will be adjusted in response to the TCJA will require further review and analysis of the responses to data requests, financial information and public comments submitted in response to the Secretarial Letter. For the period ended March 31, 2018, PPL Electric has not recorded an accrual with respect to any potential rate adjustment due to the adoption of the TCJA, as PPL Electric believes it is not probable that a loss has been incurred. Under applicable law, it is reasonably possible that the PUC could seek to adjust rates as of March 15, 2018, the date of the Temporary Rates Order. In that case, PPL Electric's estimated maximum loss exposure would be the excess amounts collected in customer rates related to applicable federal income taxes since the date of the Temporary Rates Order, which amount is immaterial as of March 31, 2018. On March 15, 2018, the FERC issued a Notice of Inquiry seeking information on whether and how it should address changes to FERC-jurisdictional rates relating to accumulated deferred income taxes and bonus depreciation resulting from passage of the TCJA. In a news release issued the same day, the FERC acknowledged that many transmission rates automatically adjust with changes in the tax rates and the adjustments for much of the industry are already taking place. PPL Electric has not made any submission in response to the Notice of Inquiry. On March 16, 2018, PPL Electric filed a waiver pursuant to Rule 207(a)(5) of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission with the FERC to request the incorporation of the changes to the federal income tax rate in its transmission formula rate commencing on June 1, 2018 rather than allowing the TCJA reduction in the federal income tax rate to be initially incorporated in PPL Electric's June 1, 2019 transmission formula rate. The waiver was approved on April 23, 2018 and PPL Electric submitted its transmission formula rate, which was inclusive of the federal income tax rate as set by the TCJA, on April 27, 2018. Other Purchase of Receivables Program (PPL and PPL Electric) In accordance with a PUC-approved purchase of accounts receivable program, PPL Electric purchases certain accounts receivable from alternative electricity suppliers at a discount, which reflects a provision for uncollectible accounts. The alternative electricity suppliers have no continuing involvement or interest in the purchased accounts receivable. Accounts receivable that are acquired are initially recorded at fair value on the date of acquisition. During the three months ended March 31, 2018 and 2017, PPL Electric purchased $376 million and $356 million of accounts receivable from alternate suppliers. |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Activities | 8. Financing Activities Credit Arrangements and Short-term Debt (All Registrants) The Registrants maintain credit facilities to enhance liquidity, provide credit support and act as a backstop to commercial paper programs. For reporting purposes, on a consolidated basis, the credit facilities and commercial paper programs of PPL Electric, LKE, LG&E and KU also apply to PPL and the credit facilities and commercial paper programs of LG&E and KU also apply to LKE. The amounts borrowed below are recorded as "Short-term debt" on the Balance Sheets except for borrowings under LG&E's term loan agreement, which are reflected in "Long-term debt" on the Balance Sheets. The following credit facilities were in place at:
In January 2018, LG&E borrowed the remaining $100 million available under its $200 million term loan facility. The proceeds were used to repay short-term debt and for general corporate purposes. PPL, PPL Electric, LG&E and KU maintain commercial paper programs to provide an additional financing source to fund short-term liquidity needs, as necessary. Commercial paper issuances, included in "Short-term debt" on the Balance Sheets, are supported by the respective Registrant's Syndicated Credit Facility. The following commercial paper programs were in place at:
(PPL Electric, LKE, and LG&E) See Note 11 for discussion of intercompany borrowings. Long-term Debt (PPL) In March 2018, WPD (South Wales) issued £30 million of 0.01% Index-linked Senior Notes due 2036. WPD (South Wales) received proceeds of £31 million, which equated to $44 million at the time of issuance, net of fees and including a premium. The principal amount of the notes is adjusted based on changes in a specified index, as detailed in the terms of the related indenture. The proceeds were used for general corporate purposes. (PPL, LKE and LG&E) In March 2018, the County of Trimble, Kentucky remarketed $28 million of Pollution Control Revenue Bonds, 2001 Series A (Louisville Gas and Electric Company Project) due 2026 previously issued on behalf of LG&E. The bonds were remarketed at a long-term rate and will bear interest at 2.30% through their mandatory purchase date of September 1, 2021. In May 2018, the County of Trimble, Kentucky remarketed $35 million of Pollution Control Revenue Bonds, 2001 Series B (Louisville Gas and Electric Company Project) due 2027 previously issued on behalf of LG&E. The bonds were remarketed at a long-term rate and will bear interest at 2.55% through their mandatory purchase date of May 3, 2021. In May 2018, the County of Jefferson, Kentucky remarketed $35 million of Pollution Control Revenue Bonds, 2001 Series B (Louisville Gas and Electric Company Project) due 2027 previously issued on behalf of LG&E. The bonds were remarketed at a long-term rate and will bear interest at 2.55% through their mandatory purchase date of May 3, 2021. (LKE) In May 2018, LKE borrowed $250 million from a PPL affiliate through the issuance of a 4% ten-year note due 2028. The proceeds were used to repay its outstanding notes payable with a PPL Energy Funding subsidiary. See Note 11 for more information related to intercompany borrowings. (PPL) ATM Program In February 2018, PPL entered into a distribution agreement, pursuant to which PPL may sell, from time to time, up to an aggregate of $1.0 billion of its common stock. The compensation paid to the selling agents by PPL may be up to 2% of the gross offering proceeds of the shares sold with respect to the equity distribution agreement. PPL issued 3.0 million shares of common stock and received gross proceeds of $85 million for the three months ended March 31, 2018. Distributions In February 2018, PPL declared a quarterly common stock dividend, payable April 2, 2018, of 41.0 cents per share (equivalent to $1.64 per annum). Future dividends, declared at the discretion of the Board of Directors, will depend upon future earnings, cash flows, financial and legal requirements and other factors. |
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Defined Benefits | 9. Defined Benefits (PPL, LKE and LG&E) Certain net periodic defined benefit costs are applied to accounts that are further distributed among capital, expense and regulatory assets, including certain costs allocated to applicable subsidiaries for plans sponsored by PPL Services and LKE. Following are the net periodic defined benefit costs (credits) of the plans sponsored by PPL and its subsidiaries, LKE and its subsidiaries, and LG&E for the periods ended March 31:
(PPL Electric, LG&E and KU) In addition to the specific plan it sponsors, LG&E is allocated costs of defined benefit plans sponsored by LKE. PPL Electric and KU do not directly sponsor any defined benefit plans. PPL Electric is allocated costs of defined benefit plans sponsored by PPL Services and KU is allocated costs of defined benefit plans sponsored by LKE. LG&E and KU are also allocated costs of defined benefit plans from LKS for defined benefit plans sponsored by LKE. See Note 11 for additional information on costs allocated to LG&E and KU from LKS. These allocations are based on participation in those plans, which management believes are reasonable. For the periods ended March 31, PPL Services allocated the following net periodic defined benefit costs to PPL Electric, and LKE allocated the following net periodic defined benefit costs to LG&E and KU:
(All Registrants) The non-service cost components of net periodic defined benefit costs (credits) (interest cost, expected return on plan assets, amortization of prior service cost and amortization of actuarial loss) are presented in "Other Income (Expense) - net" on the Statements of Income. See Note 12 for details. |
Commitments and Contingencies |
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Commitments and Contingencies | 10. Commitments and Contingencies Legal Matters (All Registrants) PPL and its subsidiaries are involved in legal proceedings, claims and litigation in the ordinary course of business. PPL and its subsidiaries cannot predict the outcome of such matters, or whether such matters may result in material liabilities, unless otherwise noted. Cane Run Environmental Claims (PPL, LKE and LG&E) In December 2013, six residents, on behalf of themselves and others similarly situated, filed a class action complaint against LG&E and PPL in the U.S. District Court for the Western District of Kentucky alleging violations of the Clean Air Act, RCRA, and common law claims of nuisance, trespass and negligence. These plaintiffs seek injunctive relief and civil penalties, plus costs and attorney fees, for the alleged statutory violations. Under the common law claims, these plaintiffs seek monetary compensation and punitive damages for property damage and diminished property values for a class consisting of residents within four miles of the Cane Run plant, which had three coal-fired units retired in 2015. In their individual capacities, these plaintiffs sought compensation for alleged adverse health effects. In July 2014, the court dismissed the RCRA claims and all but one Clean Air Act claim, but declined to dismiss the common law tort claims. In November 2016, the plaintiffs filed an amended complaint removing the personal injury claims and removing certain previously named plaintiffs. In February 2017, the District Court issued an order dismissing PPL as a defendant and dismissing the final federal claim against LG&E. On April 13, 2017, the federal District Court issued an order declining to exercise supplemental jurisdiction on the state law claims and dismissed the case in its entirety. On June 16, 2017, the plaintiffs filed a class action complaint in Jefferson Circuit Court, Kentucky, against LG&E alleging state law nuisance, negligence and trespass tort claims. The plaintiffs seek compensatory and punitive damages for alleged property damage due to purported plant emissions on behalf of a class of residents within one to three miles of the plant. Proceedings are currently underway regarding potential class certification, for which a decision may occur in late 2018 or in 2019. PPL, LKE and LG&E cannot predict the outcome of this matter and an estimate or range of possible losses cannot be determined. E.W. Brown Environmental Claims (PPL, LKE and KU) On July 12, 2017, the Kentucky Waterways Alliance and the Sierra Club filed a citizen suit complaint against KU in the U.S. District Court for the Eastern District of Kentucky alleging discharges at the E.W. Brown plant in violation of the Clean Water Act and the plant’s water discharge permit and alleging contamination that may present an imminent and substantial endangerment in violation of the RCRA. The plaintiffs’ suit relates to prior notices of intent to file a citizen suit submitted in October and November 2015 and October 2016. These plaintiffs sought injunctive relief ordering KU to take all actions necessary to comply with the Clean Water Act and RCRA, including ceasing the discharges in question, abating effects associated with prior discharges and eliminating the alleged imminent and substantial endangerment. These plaintiffs also sought assessment of civil penalties and an award of litigation costs and attorney fees. On December 28, 2017 the U.S. District Court for the Eastern District of Kentucky issued an order dismissing the Clean Water Act and RCRA complaints against KU in their entirety. On January 26, 2018, the plaintiffs appealed the dismissal order to the U.S. Court of Appeals for the Sixth Circuit. KU is undertaking extensive remedial measures at the E.W. Brown plant including closure of the former ash pond, implementation of a groundwater remedial action plan, and performance of a corrective action plan including aquatic study of adjacent surface waters and risk assessment. PPL, LKE and KU cannot predict the outcome of these matters and an estimate or range of possible losses cannot be determined. Regulatory Issues (All Registrants) See Note 7 for information on regulatory matters related to utility rate regulation. Electricity - Reliability Standards The NERC is responsible for establishing and enforcing mandatory reliability standards (Reliability Standards) regarding the bulk electric system in North America. The FERC oversees this process and independently enforces the Reliability Standards. The Reliability Standards have the force and effect of law and apply to certain users of the bulk electric system, including electric utility companies, generators and marketers. Under the Federal Power Act, the FERC may assess civil penalties for certain violations. PPL Electric, LG&E and KU monitor their compliance with the Reliability Standards and self-report or self-log potential violations of applicable reliability requirements whenever identified, and submit accompanying mitigation plans, as required. The resolution of a small number of potential violations is pending. Penalties incurred to date have not been significant. Any Regional Reliability Entity (including RFC or SERC) determination concerning the resolution of violations of the Reliability Standards remains subject to the approval of the NERC and the FERC. In the course of implementing their programs to ensure compliance with the Reliability Standards by those PPL affiliates subject to the standards, certain other instances of potential non-compliance may be identified from time to time. The Registrants cannot predict the outcome of these matters, and an estimate or range of possible losses cannot be determined. Environmental Matters (All Registrants) Due to the environmental issues discussed below or other environmental matters, it may be necessary for the Registrants to modify, curtail, replace or cease operation of certain facilities or performance of certain operations to comply with statutes, regulations and other requirements of regulatory bodies or courts. In addition, legal challenges to new environmental permits or rules add to the uncertainty of estimating the future cost of these permits and rules. Finally, the regulatory reviews specified in the President's March 2017 Executive Order (the March 2017 Executive Order) promoting energy independence and economic growth could result in future regulatory changes and additional uncertainty. WPD's distribution businesses are subject to certain statutory and regulatory environmental requirements. It may be necessary for WPD to incur significant compliance costs, which costs may be recoverable through rates subject to the approval of Ofgem. PPL believes that WPD has taken and continues to take measures to comply with all applicable environmental laws and regulations. LG&E and KU are entitled to recover, through the ECR mechanism, certain costs of complying with the Clean Air Act, as amended, and those federal, state or local environmental requirements applicable to coal combustion wastes and by-products from facilities that generate electricity from coal in accordance with approved compliance plans. Costs not covered by the ECR mechanism for LG&E and KU and all such costs for PPL Electric are subject to rate recovery before the companies' respective state regulatory authorities, or the FERC, if applicable. Because neither WPD nor PPL Electric owns any generating plants, their exposure to related environmental compliance costs is reduced. PPL, PPL Electric, LKE, LG&E and KU can provide no assurances as to the ultimate outcome of future environmental or rate proceedings before regulatory authorities. Air (PPL, LKE, LG&E and KU) NAAQS The Clean Air Act, which regulates air pollutants from mobile and stationary sources in the United States, has a significant impact on the operation of fossil fuel generation plants. Among other things, the Clean Air Act requires the EPA periodically to review and establish concentration levels in the ambient air for six pollutants to protect public health and welfare. The six pollutants are carbon monoxide, lead, nitrogen dioxide, ozone (contributed to by nitrogen oxide emissions), particulate matter and sulfur dioxide. The established concentration levels for these six pollutants are known as NAAQS. Under the Clean Air Act, the EPA is required to reassess the NAAQS on a five-year schedule. Federal environmental regulations of these six pollutants require states to adopt implementation plans, known as state implementation plans, which detail how the state will attain the standards that are mandated by the relevant law or regulation. Each state identifies the areas within its boundaries that meet the NAAQS (attainment areas) and those that do not (non-attainment areas), and must develop a state implementation plan both to bring non-attainment areas into compliance with the NAAQS and to maintain good air quality in attainment areas. In addition, for attainment of ozone and fine particulates standards, states in the eastern portion of the country, including Kentucky, are subject to a regional program developed by the EPA known as the Cross-State Air Pollution Rule. The NAAQS, future revisions to the NAAQS and state implementation plans, or future revisions to regional programs, may require installation of additional pollution controls, the costs of which PPL, LKE, LG&E and KU believe are subject to cost recovery. Although PPL, LKE, LG&E and KU do not anticipate significant costs to comply with these programs, changes in market or operating conditions could result in different costs than anticipated. Ozone The EPA issued the current ozone standard in October 2015. The states and the EPA are required to determine (based on ambient air monitoring data) those areas that meet the standard and those that are in non-attainment. The EPA was scheduled to designate areas as being in attainment or nonattainment of the current ozone standard by no later than October 2017 which was to be followed by further regulatory proceedings identifying compliance measures and deadlines. However, the current implementation and compliance schedule is uncertain because the EPA failed to make nonattainment designations by the applicable deadline. In addition, some industry groups have requested the EPA to defer implementation of the 2015 ozone standard, but the EPA has not yet acted on this request. Although implementation of the 2015 ozone standard could potentially require the addition of SCRs at some LG&E and KU generating units, PPL, LKE, LG&E and KU are currently unable to determine what the compliance measures and deadlines may ultimately be with respect to the new standard. States are also obligated to address interstate transport issues associated with ozone standards through the establishment of "good neighbor" state implementation plans for those states that are found to contribute significantly to another state's non-attainment. As a result of a partial consent decree addressing claims regarding federal implementation, the EPA and several states, including Kentucky, are evaluating the need for further nitrogen oxide reductions from fossil-fueled plants to address interstate impacts. Although PPL, LKE, LG&E and KU are unable to predict the outcome of ongoing and future evaluations by the EPA and the states, such evaluations could potentially result in requirements for nitrogen oxide reductions beyond those currently required under the Cross State Air Pollution Rule. Sulfur Dioxide In 2010, the EPA issued the current NAAQS for sulfur dioxide and required states to identify areas that meet those standards and areas that are in "non-attainment". In July 2013, the EPA finalized non-attainment designations for parts of the country, including part of Jefferson County in Kentucky. As a result of scrubber replacements completed by LG&E at the Mill Creek plant in 2016, all Jefferson County monitors now indicate compliance with the sulfur dioxide standards. Additionally, LG&E accepted a new sulfur dioxide emission limit to ensure continuing compliance with the NAAQS. PPL, LKE, LG&E and KU do not anticipate any further measures to achieve compliance with the new sulfur dioxide standards. Climate Change There is continuing world-wide attention focused on issues related to climate change. In June 2016, President Obama announced that the United States, Canada and Mexico established the North American Climate, Clean Energy, and Environment Partnership Plan, which specifies actions to promote clean energy, address climate change and protect the environment. The plan includes a goal to provide 50% of the energy used in North America from clean energy sources by 2025. The plan does not impose any nation-specific requirements. In December 2015, 195 nations, including the U.S., signed the Paris Agreement on Climate, which establishes a comprehensive framework for the reduction of GHG emissions from both developed and developing nations. Although the agreement does not establish binding reduction requirements, it requires each nation to prepare, communicate, and maintain GHG reduction commitments. Reductions can be achieved in a variety of ways, including energy conservation, power plant efficiency improvements, reduced utilization of coal-fired generation or replacing coal-fired generation with natural gas or renewable generation. Based on the EPA's rules issued in 2015 imposing GHG emission standards for both new and existing power plants, the U.S. committed to an initial reduction target of 26% to 28% below 2005 levels by 2025. However, on June 1, 2017, President Trump announced a plan to withdraw from the Paris Agreement and undertake negotiations to reenter the current agreement or enter a new agreement on terms more favorable to the U.S. Under the terms of the Paris Agreement, any U.S. withdrawal would not be complete until November 2020. Additionally, the March 2017 Executive Order directed the EPA to review its 2015 greenhouse gas rules for consistency with certain policy directives and suspend, revise, or rescind those rules as appropriate. The March 2017 Executive Order also directs rescission of specified guidance, directives, and prior Presidential actions regarding climate change. PPL, LKE, LG&E and KU cannot predict the outcome of such regulatory actions or the impact, if any, on plant operations, rate treatment or future capital or operating needs. The U.K. has enacted binding carbon reduction requirements that are applicable to WPD. Under the U.K. law, WPD must purchase carbon allowances to offset emissions associated with WPD's operations. The cost of these allowances is not significant and is included in WPD's current operating expenses. The EPA's Rules under Section 111 of the Clean Air Act, including the EPA's Clean Power Plan There continues to be uncertainty about the EPA's regulation of existing coal-fired power plants. In 2015 the EPA had finalized rules imposing GHG emission standards for both new and existing power plants and had proposed a federal implementation plan that would apply to any states that failed to submit an acceptable state implementation plan to reduce GHG emissions on a state-by-state basis (the 2015 EPA Rules). Following legal challenges to the 2015 EPA Rules, a stay of those rules by the U.S. Supreme Court and the March 2017 Executive Order requiring the EPA to review the 2015 EPA Rules, in October 2017, the EPA proposed to rescind the 2015 EPA Rules and, in December 2017, released an advanced notice of proposed rulemaking for a replacement (Replacement Rules) which contemplates GHG reductions based on "inside the fence" measures implemented at individual plants. The contemplated approach in the Replacement Rules is a more limited approach than that taken in the 2015 EPA Rules which had included assumed increased levels of fuel switching and renewable energy in determining the level of emission reduction required by each state. At present, the 2015 EPA Rules remain stayed and the Replacement Rules have not yet been published. In April 2014, the Kentucky General Assembly passed legislation limiting the measures that the Kentucky Energy and Environment Cabinet may consider in setting performance standards to comply with the 2015 EPA Rules, if enacted. The legislation provides that such state GHG performance standards will be based on emission reductions, efficiency measures and other improvements available at each power plant, rather than renewable energy, end-use energy efficiency, fuel switching and re-dispatch. These statutory restrictions are consistent with the EPA's notice of proposed rulemaking on the Replacement Rules. LG&E and KU are monitoring developments at the state and federal level. Until there is more clarity about the potential requirements that may be imposed under the Replacement Rules and Kentucky's implementation plan, PPL, LKE, LG&E and KU cannot predict the potential impact, if any, on plant operations, future capital or operating costs. PPL, LKE, LG&E and KU believe that the costs, which could be significant, would be subject to rate recovery. Sulfuric Acid Mist Emissions (PPL, LKE and LG&E) In June 2016, the EPA issued a notice of violation under the Clean Air Act alleging that LG&E violated applicable rules relating to sulfuric acid mist emissions at its Mill Creek plant. The notice alleges failure to install proper controls, failure to operate the facility consistent with good air pollution control practice, and causing emissions exceeding applicable requirements or constituting a nuisance or endangerment. LG&E believes it has complied with applicable regulations during the relevant time period. Discussions between the EPA and LG&E are ongoing. The parties have entered into a tolling agreement with respect to this matter through December 2018. PPL, LKE and LG&E are unable to predict the outcome of this matter or the potential impact on operations of the Mill Creek plant, including increased capital or operating costs, and potential civil penalties or remedial measures, if any. Water/Waste (PPL, LKE, LG&E and KU) CCRs In April 2015, the EPA published its final rule regulating CCRs. CCRs include fly ash, bottom ash and sulfur dioxide scrubber wastes. The rule became effective in October 2015. It imposes extensive new requirements, including location restrictions, design and operating standards, groundwater monitoring and corrective action requirements, and closure and post-closure care requirements on CCR impoundments and landfills that are located on active power plants in the United States and not closed. Under the rule, CCRs are regulated as non-hazardous under Subtitle D of RCRA and beneficial use of CCRs is allowed, with some restrictions. The rule's requirements for covered CCR impoundments and landfills include implementation of groundwater monitoring and commencement or completion of closure activities generally between three and ten years from certain triggering events. The rule requires posting of compliance documentation on a publicly accessible website. Industry groups, environmental groups, individual companies and others have filed legal challenges to the final rule, which are pending before the D.C. Circuit Court of Appeals. On March 1, 2018, the EPA proposed amendments to the CCR rule primarily relating to impoundment closure and remediation requirements. PPL, LKE, LG&E and KU are unable to predict the outcome of the proposed rulemaking or potential impacts on current LG&E and KU compliance plans, revisions to the current rule could potentially result in additional costs. In January 2017, Kentucky issued a new state rule relating to CCR matters, effective May 2017, aimed at reflecting the requirements of the federal CCR rule. In May 2017, a resident adjacent to LG&E's and KU's Trimble County plant filed a lawsuit in Franklin County, Kentucky Circuit Court against the Kentucky Energy and Environmental Cabinet and LG&E seeking to invalidate the new rule. On January 31, 2018, the state court issued an opinion invalidating certain procedural elements of the new rule but finding the substantive requirements of the new rule to be consistent with those of the federal CCR rule. This ruling was not appealed by any party to the litigation and is now final. Accordingly, LG&E and KU presently operate their facilities under continuing permits authorized via the former program and do not currently anticipate material impacts as a result of the judicial ruling. Separately, in December 2016, federal legislation was enacted that authorized the EPA to approve equally protective state programs that would operate in lieu of the CCR rule. The Kentucky Energy and Environmental Cabinet has indicated it may propose rules under such authority in the future. LG&E and KU received KPSC approval for a compliance plan providing for the closure of impoundments at the Mill Creek, Trimble County, E.W. Brown, and Ghent stations, and construction of process water management facilities at those plants. In addition to the foregoing measures required for compliance with the federal CCR rule, KU also received KPSC approval for its plans to close impoundments at the retired Green River, Pineville and Tyrone plants to comply with applicable state law. On January 26, 2018, KU filed an application requesting a CPCN and approval of amendments to the second phase of its compliance plan for the landfill at the E.W. Brown station. A hearing related to this matter is set for June 21, 2018. KU is unable to predict the outcome of this matter but does not anticipate that it will have a material effect on its financial condition or results of operations. In connection with the final CCR rule, LG&E and KU recorded adjustments to existing AROs beginning in 2015 and continue to record adjustments as required. See Note 16 below and Note 19 in the Registrants' 2017 Form 10-K for additional information. Further changes to AROs, current capital plans or operating costs may be required as estimates are refined based on closure developments, groundwater monitoring results, and regulatory or legal proceedings. Costs relating to this rule are subject to rate recovery. Clean Water Act Regulations under the federal Clean Water Act dictate permitting and mitigation requirements for facilities and construction projects in the United States. Many of those requirements relate to power plant operations, including requirements related to the treatment of pollutants in effluents prior to discharge, the temperature of effluent discharges and the location, design and construction of cooling water intake structures at generating facilities, standards intended to protect aquatic organisms that become trapped at or pulled through cooling water intake structures at generating facilities. The requirements could impose significant costs for LG&E and KU, which are subject to rate recovery. On February 20, 2018, the EPA issued a notice requesting comment on the scope of discharges subject to regulation under the Clean Water Act. Specifically, the EPA seeks comments on whether Clean Water Act jurisdiction should cover discharges to groundwater that reach surface water via a direct hydrologic connection. Extending Clean Water Act jurisdiction to such discharges could potentially subject certain releases from CCR impoundments to additional permitting and remediation requirements. PPL, LKE, LG&E and KU are unable to predict the future regulatory developments or potential impacts on current LG&E and KU compliance plans. ELGs In September 2015, the EPA released its final ELGs for wastewater discharge permits for new and existing steam electric generating facilities. The rule provides strict technology-based discharge limitations for control of pollutants in scrubber wastewater, fly ash and bottom ash transport water, mercury control wastewater, gasification wastewater and combustion residual leachate. The new guidelines require deployment of additional control technologies providing physical, chemical and biological treatment of wastewaters. The guidelines also mandate operational changes including "no discharge" requirements for fly ash and bottom ash transport waters and mercury control wastewaters. The implementation date for individual generating stations will be determined by the states on a case-by-case basis according to criteria provided by the EPA. Industry groups, environmental groups, individual companies and others have filed legal challenges to the final rule, which have been consolidated before the U.S. Court of Appeals for the Fifth Circuit. In April 2017, the EPA announced that it would grant petitions for reconsideration of the rule. In September 2017, the EPA published in the Federal Register a proposed rule that would postpone the compliance date for requirements relating to bottom ash transport waters and scrubber wastewaters discharge limits. The EPA expects to complete its reconsideration of best available technology standards by the fall of 2020. Upon completion of the ongoing regulatory proceedings, the rule will be implemented by the states in the course of their normal permitting activities. LG&E and KU are developing compliance strategies and schedules. PPL, LKE, LG&E and KU are unable to predict the outcome of the EPA's pending reconsideration of the rule or fully estimate compliance costs or timing. Additionally, certain aspects of these compliance plans and estimates relate to developments in state water quality standards, which are separate from the ELG rule or its implementation. Costs to comply with ELGs or other discharge limits, which are expected to be significant, are subject to rate recovery. Seepages and Groundwater Infiltration Seepages or groundwater infiltration have been detected at active and retired wastewater basins and landfills at various LG&E and KU plants. LG&E and KU have completed, or are completing, assessments of seepages or groundwater infiltration at various facilities and have completed, or are working with agencies to implement, further testing, monitoring or abatement measures, where applicable. Depending on the circumstances in each case, certain costs, which may be subject to rate recovery, could be significant. LG&E and KU cannot currently estimate a possible loss or range of possible losses related to this matter. (All Registrants) Other Issues In June 2016, the "Frank Lautenberg Chemical Safety Act" took effect as an amendment to the Toxic Substance Control Act (TSCA). The Act made no changes to the pre-existing TSCA rules as it pertains to polychlorinated biphenyls (PCB). The EPA continues to reassess its PCB regulations as part of the 2010 Advanced Notice of Proposed Rulemaking (ANPRM). The EPA's ANPRM rulemaking is to occur in two phases. Only the second part of the rule is applicable to PPL operations. This part of the rule relates to the use of PCBs in electrical equipment and natural gas pipelines, as well as continued use of PCB-contaminated porous surfaces. Although the first rulemaking will not directly affect the Registrants' operations, it may indicate certain approaches or principles to occur in the later rulemaking which may affect Registrants' facilities in the United States, including phase-out of some or all equipment containing PCBs. Should such a phase-out be required, the costs, which are subject to rate recovery, could be significant. Currently the EPA is planning a review of part two later in 2018. Superfund and Other Remediation PPL Electric is potentially responsible for a share of the costs at several sites listed by the EPA under the federal Superfund program, including the Columbia Gas Plant site and the Brodhead site. Clean-up actions have been or are being undertaken at all of these sites, the costs of which have not been, and are not expected to be, significant to PPL Electric. PPL Electric, LG&E and KU are investigating, responding to agency inquiries, implementing various preventative measures, remediating, or have completed the remediation of, several sites that were not addressed under a regulatory program such as Superfund, but for which PPL Electric, LG&E and KU may be liable for remediation. These include a number of former coal gas manufacturing plants in Pennsylvania and Kentucky previously owned or operated or currently owned by predecessors or affiliates of PPL Electric, LG&E and KU. To date, the costs of these sites have not been significant. There are additional sites, formerly owned or operated by PPL Electric, LG&E and KU predecessors or affiliates. PPL Electric, LG&E and KU lack sufficient information about such additional sites to estimate any potential liability they may have or a range of reasonably possible losses, if any, related to these matters. As of March 31, 2018 and December 31, 2017, PPL Electric had a recorded liability of $11 million and $10 million representing its best estimate of the probable loss incurred to remediate the sites noted above. Depending on the outcome of investigations at sites where investigations have not begun or been completed, or developments at sites for which information is incomplete, additional costs of remediation could be incurred; however, such costs are not expected to be significant. The EPA is evaluating the risks associated with polycyclic aromatic hydrocarbons and naphthalene, chemical by-products of coal gas manufacturing. As a result of the EPA's evaluation, individual states may establish stricter standards for water quality and soil cleanup. This could require several PPL subsidiaries to take more extensive assessment and remedial actions at former coal gas manufacturing plants. PPL, PPL Electric, LKE, LG&E and KU cannot estimate a range of reasonably possible losses, if any, related to these matters. From time to time, PPL's subsidiaries in the United States undertake testing, monitoring or remedial action in response to notices of violations, spills or other releases at various on-site and off-site locations, negotiate with the EPA and state and local agencies regarding actions necessary to comply with applicable requirements, negotiate with property owners and other third parties alleging impacts from PPL's operations and undertake similar actions necessary to resolve environmental matters that arise in the course of normal operations. Based on analyses to date, resolution of these environmental matters is not expected to have a significant adverse impact on the operations of PPL Electric, LG&E and KU. Future cleanup or remediation work at sites under review, or at sites not yet identified, may result in significant additional costs for PPL, PPL Electric, LKE, LG&E and KU. Insurance policies maintained by LKE, LG&E and KU may be available to cover certain of the costs or other obligations related to these matters but the amount of insurance coverage or reimbursement cannot be estimated or assured. Other Guarantees and Other Assurances (All Registrants) In the normal course of business, the Registrants enter into agreements that provide financial performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, guarantees, stand-by letters of credit issued by financial institutions and surety bonds issued by insurance companies. These agreements are entered into primarily to support or enhance the creditworthiness attributed to a subsidiary on a stand-alone basis or to facilitate the commercial activities in which these subsidiaries engage. (PPL) PPL fully and unconditionally guarantees all of the debt securities of PPL Capital Funding. (All Registrants) The table below details guarantees provided as of March 31, 2018. "Exposure" represents the estimated maximum potential amount of future payments that could be required to be made under the guarantee. The probability of expected payment/performance under each of these guarantees is remote except for "WPD guarantee of pension and other obligations of unconsolidated entities." The total recorded liability at March 31, 2018 was $7 million for PPL and not significant for LKE. The total recorded liability at December 31, 2017 was $17 million for PPL and $11 million for LKE. For reporting purposes, on a consolidated basis, all guarantees of PPL Electric, LKE, LG&E and KU also apply to PPL, and all guarantees of LG&E and KU also apply to LKE.
In connection with their sales of various businesses, WPD and its affiliates have provided the purchasers with indemnifications that are standard for such transactions, including indemnifications for certain pre-existing liabilities and environmental and tax matters or have agreed to continue their obligations under existing third-party guarantees, either for a set period of time following the transactions or upon the condition that the purchasers make reasonable efforts to terminate the guarantees. Additionally, WPD and its affiliates remain secondarily responsible for lease payments under certain leases that they have assigned to third parties.
The Registrants provide other miscellaneous guarantees through contracts entered into in the normal course of business. These guarantees are primarily in the form of indemnification or warranties related to services or equipment and vary in duration. The amounts of these guarantees often are not explicitly stated, and the overall maximum amount of the obligation under such guarantees cannot be reasonably estimated. Historically, no significant payments have been made with respect to these types of guarantees and the probability of payment/performance under these guarantees is remote. PPL, on behalf of itself and certain of its subsidiaries, maintains insurance that covers liability assumed under contract for bodily injury and property damage. The coverage provides maximum aggregate coverage of $225 million. This insurance may be applicable to obligations under certain of these contractual arrangements. |
Related Party Transactions |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPL Electric Utilities Corp [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | 11. Related Party Transactions Support Costs (PPL Electric, LKE, LG&E and KU) PPL Services, PPL EU Services and LKS provide PPL, PPL Electric, LKE, their respective subsidiaries, including LG&E and KU, and each other with administrative, management and support services. For all service companies, the costs of these services are charged to the respective recipients as direct support costs. General costs that cannot be directly attributed to a specific entity are allocated and charged to the respective recipients as indirect support costs. PPL Services and PPL EU Services use a three-factor methodology that includes the applicable recipients' invested capital, operation and maintenance expenses and number of employees to allocate indirect costs. PPL Services may also use a ratio of overall direct and indirect costs or a weighted average cost ratio. LKS bases its indirect allocations on the subsidiaries' number of employees, total assets, revenues, number of customers and/or other statistical information. PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
In addition to the charges for services noted above, LKS makes payments on behalf of LG&E and KU for fuel purchases and other costs for products or services provided by third parties. LG&E and KU also provide services to each other and to LKS. Billings between LG&E and KU relate to labor and overheads associated with union and hourly employees performing work for the other company, charges related to jointly-owned generating units and other miscellaneous charges. Tax settlements between LKE and LG&E and KU are reimbursed through LKS. Intercompany Borrowings (PPL Electric) PPL Energy Funding maintains a $400 million revolving line of credit with a PPL Electric subsidiary. No balance was outstanding at March 31, 2018 and December 31, 2017. The interest rates on borrowings are equal to one-month LIBOR plus a spread. (LKE) LKE maintains a revolving line of credit with a PPL Energy Funding subsidiary whereby LKE can borrow funds on a short-term basis at market-based rates. In February 2018, the revolving line of credit was increased by $25 million and the limit as of March 31, 2018 was $300 million. The interest rates on borrowings are equal to one-month LIBOR plus a spread. At March 31, 2018 and December 31, 2017, $237 million and $225 million were outstanding and reflected in "Notes payable with affiliates" on the Balance Sheets. The interest rates on the outstanding borrowing at March 31, 2018 and December 31, 2017 were 3.17% and 2.87%. LKE maintains a $400 million ten-year note with a PPL affiliate with an interest rate of 3.5%. At March 31, 2018 and December 31, 2017, the note was reflected in "Long-term debt to affiliate" on the Balance Sheets. Interest expense on this note was $4 million for the three months ending March 31, 2018 and 2017. In May 2018, LKE borrowed $250 million from a PPL affiliate through the issuance of a 4% ten-year note due 2028 with interest due in May and November. The proceeds were used to repay its outstanding notes payable with a PPL Energy Funding subsidiary. Other (PPL Electric, LG&E and KU) See Note 9 for discussions regarding intercompany allocations associated with defined benefits. |
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LG And E And KU Energy LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | 11. Related Party Transactions Support Costs (PPL Electric, LKE, LG&E and KU) PPL Services, PPL EU Services and LKS provide PPL, PPL Electric, LKE, their respective subsidiaries, including LG&E and KU, and each other with administrative, management and support services. For all service companies, the costs of these services are charged to the respective recipients as direct support costs. General costs that cannot be directly attributed to a specific entity are allocated and charged to the respective recipients as indirect support costs. PPL Services and PPL EU Services use a three-factor methodology that includes the applicable recipients' invested capital, operation and maintenance expenses and number of employees to allocate indirect costs. PPL Services may also use a ratio of overall direct and indirect costs or a weighted average cost ratio. LKS bases its indirect allocations on the subsidiaries' number of employees, total assets, revenues, number of customers and/or other statistical information. PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
In addition to the charges for services noted above, LKS makes payments on behalf of LG&E and KU for fuel purchases and other costs for products or services provided by third parties. LG&E and KU also provide services to each other and to LKS. Billings between LG&E and KU relate to labor and overheads associated with union and hourly employees performing work for the other company, charges related to jointly-owned generating units and other miscellaneous charges. Tax settlements between LKE and LG&E and KU are reimbursed through LKS. Intercompany Borrowings (PPL Electric) PPL Energy Funding maintains a $400 million revolving line of credit with a PPL Electric subsidiary. No balance was outstanding at March 31, 2018 and December 31, 2017. The interest rates on borrowings are equal to one-month LIBOR plus a spread. (LKE) LKE maintains a revolving line of credit with a PPL Energy Funding subsidiary whereby LKE can borrow funds on a short-term basis at market-based rates. In February 2018, the revolving line of credit was increased by $25 million and the limit as of March 31, 2018 was $300 million. The interest rates on borrowings are equal to one-month LIBOR plus a spread. At March 31, 2018 and December 31, 2017, $237 million and $225 million were outstanding and reflected in "Notes payable with affiliates" on the Balance Sheets. The interest rates on the outstanding borrowing at March 31, 2018 and December 31, 2017 were 3.17% and 2.87%. LKE maintains a $400 million ten-year note with a PPL affiliate with an interest rate of 3.5%. At March 31, 2018 and December 31, 2017, the note was reflected in "Long-term debt to affiliate" on the Balance Sheets. Interest expense on this note was $4 million for the three months ending March 31, 2018 and 2017. In May 2018, LKE borrowed $250 million from a PPL affiliate through the issuance of a 4% ten-year note due 2028 with interest due in May and November. The proceeds were used to repay its outstanding notes payable with a PPL Energy Funding subsidiary. Other (PPL Electric, LG&E and KU) See Note 9 for discussions regarding intercompany allocations associated with defined benefits. |
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Louisville Gas And Electric Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | 11. Related Party Transactions Support Costs (PPL Electric, LKE, LG&E and KU) PPL Services, PPL EU Services and LKS provide PPL, PPL Electric, LKE, their respective subsidiaries, including LG&E and KU, and each other with administrative, management and support services. For all service companies, the costs of these services are charged to the respective recipients as direct support costs. General costs that cannot be directly attributed to a specific entity are allocated and charged to the respective recipients as indirect support costs. PPL Services and PPL EU Services use a three-factor methodology that includes the applicable recipients' invested capital, operation and maintenance expenses and number of employees to allocate indirect costs. PPL Services may also use a ratio of overall direct and indirect costs or a weighted average cost ratio. LKS bases its indirect allocations on the subsidiaries' number of employees, total assets, revenues, number of customers and/or other statistical information. PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
In addition to the charges for services noted above, LKS makes payments on behalf of LG&E and KU for fuel purchases and other costs for products or services provided by third parties. LG&E and KU also provide services to each other and to LKS. Billings between LG&E and KU relate to labor and overheads associated with union and hourly employees performing work for the other company, charges related to jointly-owned generating units and other miscellaneous charges. Tax settlements between LKE and LG&E and KU are reimbursed through LKS. Intercompany Borrowings (PPL Electric) PPL Energy Funding maintains a $400 million revolving line of credit with a PPL Electric subsidiary. No balance was outstanding at March 31, 2018 and December 31, 2017. The interest rates on borrowings are equal to one-month LIBOR plus a spread. (LKE) LKE maintains a revolving line of credit with a PPL Energy Funding subsidiary whereby LKE can borrow funds on a short-term basis at market-based rates. In February 2018, the revolving line of credit was increased by $25 million and the limit as of March 31, 2018 was $300 million. The interest rates on borrowings are equal to one-month LIBOR plus a spread. At March 31, 2018 and December 31, 2017, $237 million and $225 million were outstanding and reflected in "Notes payable with affiliates" on the Balance Sheets. The interest rates on the outstanding borrowing at March 31, 2018 and December 31, 2017 were 3.17% and 2.87%. LKE maintains a $400 million ten-year note with a PPL affiliate with an interest rate of 3.5%. At March 31, 2018 and December 31, 2017, the note was reflected in "Long-term debt to affiliate" on the Balance Sheets. Interest expense on this note was $4 million for the three months ending March 31, 2018 and 2017. In May 2018, LKE borrowed $250 million from a PPL affiliate through the issuance of a 4% ten-year note due 2028 with interest due in May and November. The proceeds were used to repay its outstanding notes payable with a PPL Energy Funding subsidiary. Other (PPL Electric, LG&E and KU) See Note 9 for discussions regarding intercompany allocations associated with defined benefits. |
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Kentucky Utilities Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Related Party Transactions | 11. Related Party Transactions Support Costs (PPL Electric, LKE, LG&E and KU) PPL Services, PPL EU Services and LKS provide PPL, PPL Electric, LKE, their respective subsidiaries, including LG&E and KU, and each other with administrative, management and support services. For all service companies, the costs of these services are charged to the respective recipients as direct support costs. General costs that cannot be directly attributed to a specific entity are allocated and charged to the respective recipients as indirect support costs. PPL Services and PPL EU Services use a three-factor methodology that includes the applicable recipients' invested capital, operation and maintenance expenses and number of employees to allocate indirect costs. PPL Services may also use a ratio of overall direct and indirect costs or a weighted average cost ratio. LKS bases its indirect allocations on the subsidiaries' number of employees, total assets, revenues, number of customers and/or other statistical information. PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
In addition to the charges for services noted above, LKS makes payments on behalf of LG&E and KU for fuel purchases and other costs for products or services provided by third parties. LG&E and KU also provide services to each other and to LKS. Billings between LG&E and KU relate to labor and overheads associated with union and hourly employees performing work for the other company, charges related to jointly-owned generating units and other miscellaneous charges. Tax settlements between LKE and LG&E and KU are reimbursed through LKS. Intercompany Borrowings (PPL Electric) PPL Energy Funding maintains a $400 million revolving line of credit with a PPL Electric subsidiary. No balance was outstanding at March 31, 2018 and December 31, 2017. The interest rates on borrowings are equal to one-month LIBOR plus a spread. (LKE) LKE maintains a revolving line of credit with a PPL Energy Funding subsidiary whereby LKE can borrow funds on a short-term basis at market-based rates. In February 2018, the revolving line of credit was increased by $25 million and the limit as of March 31, 2018 was $300 million. The interest rates on borrowings are equal to one-month LIBOR plus a spread. At March 31, 2018 and December 31, 2017, $237 million and $225 million were outstanding and reflected in "Notes payable with affiliates" on the Balance Sheets. The interest rates on the outstanding borrowing at March 31, 2018 and December 31, 2017 were 3.17% and 2.87%. LKE maintains a $400 million ten-year note with a PPL affiliate with an interest rate of 3.5%. At March 31, 2018 and December 31, 2017, the note was reflected in "Long-term debt to affiliate" on the Balance Sheets. Interest expense on this note was $4 million for the three months ending March 31, 2018 and 2017. In May 2018, LKE borrowed $250 million from a PPL affiliate through the issuance of a 4% ten-year note due 2028 with interest due in May and November. The proceeds were used to repay its outstanding notes payable with a PPL Energy Funding subsidiary. Other (PPL Electric, LG&E and KU) See Note 9 for discussions regarding intercompany allocations associated with defined benefits. |
Other Income (Expense) - net |
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Other Income (Expense) - net | 12. Other Income (Expense) - net (PPL) The details of "Other Income (Expense) - net" for the three months ended March 31, were:
(PPL Electric) The details of "Other Income (Expense) - net" for the three months ended March 31, were:
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Other Income (Expense) - net | 12. Other Income (Expense) - net (PPL) The details of "Other Income (Expense) - net" for the three months ended March 31, were:
(PPL Electric) The details of "Other Income (Expense) - net" for the three months ended March 31, were:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 13. Fair Value Measurements (All Registrants) Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). A market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models) and/or a cost approach (generally, replacement cost) are used to measure the fair value of an asset or liability, as appropriate. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. The fair value of a group of financial assets and liabilities is measured on a net basis. Transfers between levels are recognized at end-of-reporting-period values. During the three months ended March 31, 2018 and 2017, there were no transfers between Level 1 and Level 2. See Note 1 in each Registrant's 2017 Form 10-K for information on the levels in the fair value hierarchy. Recurring Fair Value Measurements The assets and liabilities measured at fair value were:
Price Risk Management Assets/Liabilities - Interest Rate Swaps/Foreign Currency Contracts/Cross-Currency Swaps (PPL, LKE, LG&E and KU) To manage interest rate risk, PPL, LKE, LG&E and KU use interest rate contracts such as forward-starting swaps, floating-to-fixed swaps and fixed-to-floating swaps. To manage foreign currency risk, PPL uses foreign currency contracts such as forwards, options and cross-currency swaps that contain characteristics of both interest rate and foreign currency contracts. An income approach is used to measure the fair value of these contracts, utilizing readily observable inputs, such as forward interest rates (e.g., LIBOR and government security rates) and forward foreign currency exchange rates (e.g., GBP), as well as inputs that may not be observable, such as credit valuation adjustments. In certain cases, market information cannot practicably be obtained to value credit risk and therefore internal models are relied upon. These models use projected probabilities of default and estimated recovery rates based on historical observances. When the credit valuation adjustment is significant to the overall valuation, the contracts are classified as Level 3. Financial Instruments Not Recorded at Fair Value (All Registrants) The carrying amounts of long-term debt on the Balance Sheets and their estimated fair values are set forth below. Long-term debt is classified as Level 2. The effect of third-party credit enhancements is not included in the fair value measurement.
The carrying amounts of other current financial instruments (except for long-term debt due within one year) approximate their fair values because of their short-term nature. |
Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | 14. Derivative Instruments and Hedging Activities Risk Management Objectives (All Registrants) PPL has a risk management policy approved by the Board of Directors to manage market risk associated with commodities, interest rates on debt issuances and foreign exchange (including price, liquidity and volumetric risk) and credit risk (including non-performance risk and payment default risk). The Risk Management Committee, comprised of senior management and chaired by the Senior Director-Risk Management, oversees the risk management function. Key risk control activities designed to ensure compliance with the risk policy and detailed programs include, but are not limited to, credit review and approval, validation of transactions, verification of risk and transaction limits, value-at-risk analyses (VaR, a statistical model that attempts to estimate the value of potential loss over a given holding period under normal market conditions at a given confidence level) and the coordination and reporting of the Enterprise Risk Management program. Market Risk Market risk includes the potential loss that may be incurred as a result of price changes associated with a particular financial or commodity instrument as well as market liquidity and volumetric risks. Forward contracts, futures contracts, options, swaps and structured transactions are utilized as part of risk management strategies to minimize unanticipated fluctuations in earnings caused by changes in commodity prices, interest rates and foreign currency exchange rates. Many of these contracts meet the definition of a derivative. All derivatives are recognized on the Balance Sheets at their fair value, unless NPNS is elected. The following summarizes the market risks that affect PPL and its subsidiaries. Interest Rate Risk
Foreign Currency Risk (PPL)
(All Registrants) Commodity Price Risk PPL is exposed to commodity price risk through its domestic subsidiaries as described below.
Volumetric Risk PPL is exposed to volumetric risk through its subsidiaries as described below.
Equity Securities Price Risk
Credit Risk Credit risk is the potential loss that may be incurred due to a counterparty's non-performance. PPL is exposed to credit risk from "in-the-money" interest rate and foreign currency derivatives with financial institutions, as well as additional credit risk through certain of its subsidiaries, as discussed below. In the event a supplier of PPL Electric, LG&E or KU defaults on its obligation, those Registrants would be required to seek replacement power or replacement fuel in the market. In general, subject to regulatory review or other processes, appropriate incremental costs incurred by these entities would be recoverable from customers through applicable rate mechanisms, thereby mitigating the financial risk for these entities. PPL and its subsidiaries have credit policies in place to manage credit risk, including the use of an established credit approval process, daily monitoring of counterparty positions and the use of master netting agreements or provisions. These agreements generally include credit mitigation provisions, such as margin, prepayment or collateral requirements. PPL and its subsidiaries may request additional credit assurance, in certain circumstances, in the event that the counterparties' credit ratings fall below investment grade, their tangible net worth falls below specified percentages or their exposures exceed an established credit limit. Master Netting Arrangements (PPL, LKE, LG&E and KU) Net derivative positions on the balance sheets are not offset against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements. PPL had a $16 million obligation to return cash collateral under master netting arrangements at March 31, 2018 and a $20 million obligation to return cash collateral under master netting arrangements at December 31, 2017. PPL had a $5 million obligation to post cash collateral under master netting arrangements at March 31, 2018 and no cash collateral posted under master netting arrangements at December 31, 2017. LKE, LG&E and KU had no obligation to return cash collateral under master netting arrangements at March 31, 2018 and December 31, 2017. LKE, LG&E and KU had no cash collateral posted under master netting arrangements at March 31, 2018 and December 31, 2017. See "Offsetting Derivative Instruments" below for a summary of derivative positions presented in the balance sheets where a right of setoff exists under these arrangements. Interest Rate Risk (All Registrants) PPL and its subsidiaries issue debt to finance their operations, which exposes them to interest rate risk. A variety of financial derivative instruments are utilized to adjust the mix of fixed and floating interest rates in their debt portfolios, adjust the duration of the debt portfolios and lock in benchmark interest rates in anticipation of future financing, when appropriate. Risk limits under PPL's risk management program are designed to balance risk exposure to volatility in interest expense and changes in the fair value of the debt portfolio due to changes in benchmark interest rates. In addition, the interest rate risk of certain subsidiaries is potentially mitigated as a result of the existing regulatory framework or the timing of rate cases. Cash Flow Hedges (PPL) Interest rate risks include exposure to adverse interest rate movements for outstanding variable rate debt and for future anticipated financings. Financial interest rate swap contracts that qualify as cash flow hedges may be entered into to hedge floating interest rate risk associated with both existing and anticipated debt issuances. PPL held no such contracts at March 31, 2018. For the three months ended March 31, 2018 and 2017, PPL had no hedge ineffectiveness associated with interest rate derivatives. At March 31, 2018, PPL held an aggregate notional value in cross-currency interest rate swap contracts of $702 million that range in maturity from 2021 through 2028 to hedge the interest payments and principal of WPD's U.S. dollar-denominated senior notes. For the three months ended March 31, 2018 and 2017, PPL had no hedge ineffectiveness associated with cross-currency interest rate swap derivatives. Cash flow hedges are discontinued if it is no longer probable that the original forecasted transaction will occur by the end of the originally specified time period and any amounts previously recorded in AOCI are reclassified into earnings once it is determined that the hedged transaction is not probable of occurring. For the three months ended March 31, 2018, PPL had no cash flow hedges reclassified into earnings associated with discontinued cash flow hedges. For the three months ended March 31, 2017, PPL had an insignificant amount of cash flow hedges reclassified into earnings associated with discontinued cash flow hedges. At March 31, 2018, the amount of accumulated net unrecognized after-tax gains (losses) on qualifying derivatives expected to be reclassified into earnings during the next 12 months is insignificant. Amounts are reclassified as the hedged interest expense is recorded. Economic Activity (PPL, LKE and LG&E) LG&E enters into interest rate swap contracts that economically hedge interest payments on variable rate debt. Because realized gains and losses from the swaps, including terminated swap contracts, are recoverable through regulated rates, any subsequent changes in fair value of these derivatives are included in regulatory assets or liabilities until they are realized as interest expense. Realized gains and losses are recognized in "Interest Expense" on the Statements of Income at the time the underlying hedged interest expense is recorded. At March 31, 2018, LG&E held contracts with a notional amount of $147 million that range in maturity through 2033. Foreign Currency Risk (PPL) PPL is exposed to foreign currency risk, primarily through investments in and earnings of U.K. affiliates. PPL has adopted a foreign currency risk management program designed to hedge certain foreign currency exposures, including firm commitments, recognized assets or liabilities, anticipated transactions and net investments. In addition, PPL enters into financial instruments to protect against foreign currency translation risk of expected GBP earnings. Net Investment Hedges PPL enters into foreign currency contracts on behalf of a subsidiary to protect the value of a portion of its net investment in WPD. The contracts outstanding at March 31, 2018 had a notional amount of £140 million (approximately $195 million based on contracted rates). The settlement dates of these contracts are in June 2018. At March 31, 2018 and December 31, 2017, PPL had $20 million and $22 million of accumulated net investment hedge after tax gains (losses) that were included in the foreign currency translation adjustment component of AOCI. Economic Activity PPL enters into foreign currency contracts on behalf of a subsidiary to economically hedge GBP-denominated anticipated earnings. At March 31, 2018, the total exposure hedged by PPL was approximately £2.1 billion (approximately $2.9 billion based on contracted rates). These contracts have termination dates ranging from April 2018 through August 2020. Accounting and Reporting (All Registrants) All derivative instruments are recorded at fair value on the Balance Sheet as an asset or liability unless NPNS is elected. NPNS contracts for PPL and PPL Electric include certain full-requirement purchase contracts and other physical purchase contracts. Changes in the fair value of derivatives not designated as NPNS are recognized in earnings unless specific hedge accounting criteria are met and designated as such, except for the changes in fair values of LG&E's interest rate swaps that are recognized as regulatory assets or regulatory liabilities. See Note 7 for amounts recorded in regulatory assets and regulatory liabilities at March 31, 2018 and December 31, 2017. See Note 1 in each Registrant's 2017 Form 10-K for additional information on accounting policies related to derivative instruments. (PPL) The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.
The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended March 31, 2018.
The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended March 31, 2017.
(LKE and LG&E) The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.
The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the periods ended March 31, 2018.
The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the periods ended March 31, 2017.
(PPL, LKE, LG&E and KU) Offsetting Derivative Instruments PPL, LKE, LG&E and KU or certain of their subsidiaries have master netting arrangements in place and also enter into agreements pursuant to which they purchase or sell certain energy and other products. Under the agreements, upon termination of the agreement as a result of a default or other termination event, the non-defaulting party typically would have a right to set off amounts owed under the agreement against any other obligations arising between the two parties (whether under the agreement or not), whether matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation. PPL, LKE, LG&E and KU have elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivatives agreements. The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.
Credit Risk-Related Contingent Features Certain derivative contracts contain credit risk-related contingent features which, when in a net liability position, would permit the counterparties to require the transfer of additional collateral upon a decrease in the credit ratings of PPL, LKE, LG&E and KU or certain of their subsidiaries. Most of these features would require the transfer of additional collateral or permit the counterparty to terminate the contract if the applicable credit rating were to fall below investment grade. Some of these features also would allow the counterparty to require additional collateral upon each downgrade in credit rating at levels that remain above investment grade. In either case, if the applicable credit rating were to fall below investment grade, and assuming no assignment to an investment grade affiliate were allowed, most of these credit contingent features require either immediate payment of the net liability as a termination payment or immediate and ongoing full collateralization on derivative instruments in net liability positions. Additionally, certain derivative contracts contain credit risk-related contingent features that require adequate assurance of performance be provided if the other party has reasonable concerns regarding the performance of PPL's, LKE's, LG&E's and KU's obligations under the contracts. A counterparty demanding adequate assurance could require a transfer of additional collateral or other security, including letters of credit, cash and guarantees from a creditworthy entity. This would typically involve negotiations among the parties. However, amounts disclosed below represent assumed immediate payment or immediate and ongoing full collateralization for derivative instruments in net liability positions with "adequate assurance" features. (PPL, LKE and LG&E) At March 31, 2018, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:
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Goodwill |
3 Months Ended |
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Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 15. Goodwill and Other Intangible Assets (PPL) The change in the carrying amount of goodwill for the three months ended March 31, 2018 was due to the effect of foreign currency exchange rates on the U.K. Regulated segment. |
Asset Retirement Obligations |
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Asset Retirement Obligations | 16. Asset Retirement Obligations (PPL, LKE, LG&E and KU) PPL's, LKE's, LG&E's and KU's ARO liabilities are primarily related to CCR closure costs. See Note 10 for information on the final CCR rule. For LKE, LG&E and KU, all ARO accretion and depreciation expenses are reclassified as a regulatory asset. ARO regulatory assets associated with certain CCR projects are amortized to expense in accordance with regulatory approvals. For other AROs, at the time of retirement, the related ARO regulatory asset is offset against the associated cost of removal regulatory liability, PP&E and ARO liability. The changes in the carrying amounts of AROs were as follows.
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Asset Retirement Obligations | 16. Asset Retirement Obligations (PPL, LKE, LG&E and KU) PPL's, LKE's, LG&E's and KU's ARO liabilities are primarily related to CCR closure costs. See Note 10 for information on the final CCR rule. For LKE, LG&E and KU, all ARO accretion and depreciation expenses are reclassified as a regulatory asset. ARO regulatory assets associated with certain CCR projects are amortized to expense in accordance with regulatory approvals. For other AROs, at the time of retirement, the related ARO regulatory asset is offset against the associated cost of removal regulatory liability, PP&E and ARO liability. The changes in the carrying amounts of AROs were as follows.
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Asset Retirement Obligations | 16. Asset Retirement Obligations (PPL, LKE, LG&E and KU) PPL's, LKE's, LG&E's and KU's ARO liabilities are primarily related to CCR closure costs. See Note 10 for information on the final CCR rule. For LKE, LG&E and KU, all ARO accretion and depreciation expenses are reclassified as a regulatory asset. ARO regulatory assets associated with certain CCR projects are amortized to expense in accordance with regulatory approvals. For other AROs, at the time of retirement, the related ARO regulatory asset is offset against the associated cost of removal regulatory liability, PP&E and ARO liability. The changes in the carrying amounts of AROs were as follows.
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Asset Retirement Obligations | 16. Asset Retirement Obligations (PPL, LKE, LG&E and KU) PPL's, LKE's, LG&E's and KU's ARO liabilities are primarily related to CCR closure costs. See Note 10 for information on the final CCR rule. For LKE, LG&E and KU, all ARO accretion and depreciation expenses are reclassified as a regulatory asset. ARO regulatory assets associated with certain CCR projects are amortized to expense in accordance with regulatory approvals. For other AROs, at the time of retirement, the related ARO regulatory asset is offset against the associated cost of removal regulatory liability, PP&E and ARO liability. The changes in the carrying amounts of AROs were as follows.
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss) | 17. Accumulated Other Comprehensive Income (Loss) (PPL) The after-tax changes in AOCI by component for the periods ended March 31 were as follows.
The following table presents the gains (losses) and related income taxes for reclassifications from AOCI for the periods ended March 31. The defined benefit plan components of AOCI are not reflected in their entirety in the Statement of Income during the periods; rather, they are included in the computation of net periodic defined benefit costs (credits) and subject to capitalization. See Note 9 for additional information.
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New Accounting Guidance Pending Adoption |
3 Months Ended |
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Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | 18. New Accounting Guidance Pending Adoption (All Registrants) Accounting for Leases In February 2016, the FASB issued accounting guidance for leases. This new guidance requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, the FASB retained a dual model for lessees, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright line tests. Lessor accounting under the new guidance is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Similar to current practice, lessors will classify leases as operating, direct financing, or sales-type. The standard is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. One of these practical expedients allows entities to elect to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases. In January 2018, the FASB also issued additional guidance that provides for a practical expedient that allows entities to elect to not evaluate land easements as leases that exist or expired before the adoption date and were not previously accounted for as leases under current lease guidance. The Registrants plan to elect these practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Registrants are currently assessing the impact of adopting this guidance. The Registrants will adopt this guidance effective January 1, 2019. Accounting for Financial Instrument Credit Losses In June 2016, the FASB issued accounting guidance that requires the use of a current expected credit loss (CECL) model for the measurement of credit losses on financial instruments within the scope of this guidance, which includes accounts receivable. The CECL model requires an entity to measure credit losses using historical information, current information and reasonable and supportable forecasts of future events, rather than the incurred loss impairment model required under current GAAP. For public business entities, this guidance will be applied using a modified retrospective approach and is effective for fiscal years beginning after December 15, 2019, and interim periods within those years. All entities may early adopt this guidance in beginning after December 15, 2018, including interim periods within those years. The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it. Improvements to Accounting for Hedging Activities In August 2017, the FASB issued accounting guidance that reduces complexity when applying hedge accounting as well as improves transparency about an entity's risk management activities. This guidance eliminates recognizing hedge ineffectiveness for cash flow and net investment hedges and provides for the ability to perform subsequent effectiveness assessments qualitatively. The guidance also makes certain changes to allowable methodologies such as allowing entities to apply the short-cut method to partial-term fair value hedges of interest rate risk as well as expands the ability to apply the critical terms match method to cash flow hedges of groups of forecasted transactions. The guidance also updates certain recognition and presentation requirements as well as disclosure requirements. For public business entities, this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. This standard must be adopted using a modified retrospective approach and provides for certain transition elections that must be made prior to the first effectiveness testing date after adoption. The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it. (PPL, LKE, LG&E and KU) Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued accounting guidance that simplifies the test for goodwill impairment by eliminating the second step of the quantitative test. The second step of the quantitative test requires a calculation of the implied fair value of goodwill, which is determined in the same manner as the amount of goodwill in a business combination. Under this new guidance, an entity will now compare the estimated fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount the carrying amount exceeds the fair value of the reporting unit. For public business entities, this guidance will be applied prospectively and is effective for annual or any interim goodwill impairment tests for fiscal years beginning after December 15, 2019. All entities may early adopt this guidance for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it. (PPL and LKE) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued accounting guidance that gives entities the option to reclassify tax effects stranded within AOCI as a result of the TCJA to retained earnings. The reclassification applies only to those stranded tax effects arising from the TCJA enactment. Certain disclosures related to the stranded tax effects, including a description of the accounting policy for releasing income tax effects from AOCI, are required. For all entities, this guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The amendments should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The adoption of this guidance will result in PPL and LKE reclassifying $50 million and $18 million of deferred tax effects (primarily related to pension and other post-retirement benefits) stranded in AOCI as a result of the TCJA to retained earnings. The Registrants are assessing the period in which they will adopt this guidance. |
Fair Value Measurements (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Transfer, Policy | Transfers between levels are recognized at end-of-reporting-period values. |
Derivative Instruments and Hedging Activities (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives, Offsetting Fair Value Amounts, Policy | Net derivative positions on the balance sheets are not offset against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements. |
Summary of Significant Accounting Policies Adoption of Accounting Guidance [Tables] |
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Schedule of Non-Service Benefits Costs (Credits) [Table Text Block] | The following provides the non-service cost components of net periodic benefits (costs) or credits presented in "Other Income (Expense) - net" in 2018 and reclassified from "Other operation and maintenance" to "Other Income (Expense) - net" in 2017 on the Statements of Income as a result of the adoption.
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Reconciliation of Cash, Cash Equivalents and Restricted Cash from the Balance Sheet to Cash Flow Statement | The following provides a reconciliation of Cash, Cash Equivalents and Restricted Cash reported within the Balance Sheets that sum to the total of the same amounts shown on the Statements of Cash Flows:
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Segment and Related Information (Tables) |
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Segment and Related Information | Income Statement data for the segments and reconciliation to PPL's consolidated results for the periods ended March 31 are as follows:
The following provides Balance Sheet data for the segments and reconciliation to PPL's consolidated results as of:
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Revenue from Contracts with Customers (Tables) |
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Reconciliation of Revenue from Contracts with Customers [Table Text Block] | The following table reconciles "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the period ended March 31, 2018.
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Disaggregation of Revenue [Table Text Block] | The following table shows revenues from contracts with customers disaggregated by customer class for the period ended March 31, 2018.
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Credit Loss Recognized from Contracts with Customers [Table Text Block] | The following table shows the accounts receivable balances that were impaired for the period ended March 31, 2018.
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Contract with Customer, Asset and Liability [Table Text Block] | The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers.
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted EPS Computations | Reconciliations of the amounts of income and shares of PPL common stock (in thousands) for the periods ended March 31 used in the EPS calculation are:
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Common Stock Issuances | For the periods ended March 31, PPL issued common stock related to stock-based compensation plans and the DRIP as follows (in thousands):
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Antidilutive Securities Excluded From Diluted EPS | For the periods ended March 31, the following shares (in thousands) were excluded from the computations of diluted EPS because the effect would have been antidilutive.
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of income taxes for the periods ended March 31 are as follows.
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PPL Electric Utilities Corp [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of income taxes for the periods ended March 31 are as follows.
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LG And E And KU Energy LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of income taxes for the periods ended March 31 are as follows.
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Louisville Gas And Electric Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of income taxes for the periods ended March 31 are as follows.
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Kentucky Utilities Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of income taxes for the periods ended March 31 are as follows.
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Utility Rate Regulation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Utility Rate Regulation [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities | The following table provides information about the regulatory assets and liabilities of cost-based rate-regulated utility operations.
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Financing Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Line of Credit Facilities | The following credit facilities were in place at:
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Schedule of Short-term Debt | The following commercial paper programs were in place at:
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Defined Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Net Periodic Defined Benefit Costs (Credits) | Following are the net periodic defined benefit costs (credits) of the plans sponsored by PPL and its subsidiaries, LKE and its subsidiaries, and LG&E for the periods ended March 31:
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PPL Electric Utilities Corp [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of Net Periodic Benefit Costs | For the periods ended March 31, PPL Services allocated the following net periodic defined benefit costs to PPL Electric, and LKE allocated the following net periodic defined benefit costs to LG&E and KU:
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LG And E And KU Energy LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Net Periodic Defined Benefit Costs (Credits) | Following are the net periodic defined benefit costs (credits) of the plans sponsored by PPL and its subsidiaries, LKE and its subsidiaries, and LG&E for the periods ended March 31:
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Louisville Gas And Electric Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Net Periodic Defined Benefit Costs (Credits) | Following are the net periodic defined benefit costs (credits) of the plans sponsored by PPL and its subsidiaries, LKE and its subsidiaries, and LG&E for the periods ended March 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of Net Periodic Benefit Costs | For the periods ended March 31, PPL Services allocated the following net periodic defined benefit costs to PPL Electric, and LKE allocated the following net periodic defined benefit costs to LG&E and KU:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kentucky Utilities Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of Net Periodic Benefit Costs | For the periods ended March 31, PPL Services allocated the following net periodic defined benefit costs to PPL Electric, and LKE allocated the following net periodic defined benefit costs to LG&E and KU:
|
Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees | The table below details guarantees provided as of March 31, 2018.
In connection with their sales of various businesses, WPD and its affiliates have provided the purchasers with indemnifications that are standard for such transactions, including indemnifications for certain pre-existing liabilities and environmental and tax matters or have agreed to continue their obligations under existing third-party guarantees, either for a set period of time following the transactions or upon the condition that the purchasers make reasonable efforts to terminate the guarantees. Additionally, WPD and its affiliates remain secondarily responsible for lease payments under certain leases that they have assigned to third parties.
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Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPL Electric Utilities Corp [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intercompany Support Cost Allocations | PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LG And E And KU Energy LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intercompany Support Cost Allocations | PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Louisville Gas And Electric Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intercompany Support Cost Allocations | PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kentucky Utilities Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intercompany Support Cost Allocations | PPL Services, PPL EU Services and LKS charged the following amounts for the periods ended March 31, including amounts applied to accounts that are further distributed between capital and expense on the books of the recipients, based on methods that are believed to be reasonable.
|
Other Income (Expense)- net Other Income (Expense) - net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) Net [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | The details of "Other Income (Expense) - net" for the three months ended March 31, were:
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PPL Electric Utilities Corp [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) Net [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | The details of "Other Income (Expense) - net" for the three months ended March 31, were:
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The assets and liabilities measured at fair value were:
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Fair Value, by Balance Sheet Grouping | The carrying amounts of long-term debt on the Balance Sheets and their estimated fair values are set forth below.
|
Derivative Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.
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Derivative Instruments, Gain (Loss) | The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended March 31, 2018.
The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended March 31, 2017.
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Derivative Positions Eligible for Offset with Related Cash Collateral | The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.
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Credit Risk-Related Contingent Features | At March 31, 2018, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:
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LG And E And KU Energy LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.
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Derivative Instruments, Gain (Loss) | The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the periods ended March 31, 2018.
The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the periods ended March 31, 2017.
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Derivative Positions Eligible for Offset with Related Cash Collateral | The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.
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Credit Risk-Related Contingent Features | At March 31, 2018, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:
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Louisville Gas And Electric Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.
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Derivative Instruments, Gain (Loss) | The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the periods ended March 31, 2018.
The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the periods ended March 31, 2017.
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Derivative Positions Eligible for Offset with Related Cash Collateral | The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.
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Credit Risk-Related Contingent Features | At March 31, 2018, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:
|
Asset Retirement Obligations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Roll Forward | The changes in the carrying amounts of AROs were as follows.
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LG And E And KU Energy LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Roll Forward | The changes in the carrying amounts of AROs were as follows.
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Louisville Gas And Electric Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Roll Forward | The changes in the carrying amounts of AROs were as follows.
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Kentucky Utilities Co [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Roll Forward | The changes in the carrying amounts of AROs were as follows.
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The after-tax changes in AOCI by component for the periods ended March 31 were as follows.
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Reclassification out of Other Comprehensive Income (Loss) | The following table presents the gains (losses) and related income taxes for reclassifications from AOCI for the periods ended March 31.
|
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of Cash, Cash Equivalents and Restricted Cash from the Balance Sheet to Cash Flow Statement [Line Items] | ||||
Cash and cash equivalents | $ 629 | $ 485 | ||
Restricted Cash, Current | 3 | 3 | ||
Restricted Cash, Noncurrent | 21 | 23 | ||
Cash, Cash Equivalents and Restricted Cash | 653 | $ 433 | 511 | $ 367 |
Income Statement impact of ASU 2017-07 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit- Non Service | 5 | |||
Defined Benefit Plan Net Periodic Benefit (Cost) Credit Non Service, After tax | $ 4 | |||
Defined Benefit Plan Net Periodic Benefit (Cost) Credit NonService, Per Share | $ 0.01 | |||
Impact of adoption of ASU 2017-07 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit- Non Service | $ 68 | 38 | ||
PPL Electric Utilities Corp [Member] | ||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash from the Balance Sheet to Cash Flow Statement [Line Items] | ||||
Cash and cash equivalents | 20 | 49 | ||
Restricted Cash, Current | 2 | 2 | ||
Restricted Cash, Noncurrent | 0 | 0 | ||
Cash, Cash Equivalents and Restricted Cash | 22 | 22 | 51 | 15 |
PPL Electric Utilities Corp [Member] | Impact of adoption of ASU 2017-07 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit- Non Service | 2 | (1) | ||
LG And E And KU Energy LLC [Member] | ||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash from the Balance Sheet to Cash Flow Statement [Line Items] | ||||
Cash and cash equivalents | 27 | 15 | 30 | 13 |
LG And E And KU Energy LLC [Member] | Impact of adoption of ASU 2017-07 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit- Non Service | 2 | (2) | ||
Louisville Gas And Electric Co [Member] | ||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash from the Balance Sheet to Cash Flow Statement [Line Items] | ||||
Cash and cash equivalents | 14 | 4 | 15 | 5 |
Louisville Gas And Electric Co [Member] | Impact of adoption of ASU 2017-07 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit- Non Service | 1 | (2) | ||
Kentucky Utilities Co [Member] | ||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash from the Balance Sheet to Cash Flow Statement [Line Items] | ||||
Cash and cash equivalents | 11 | 7 | $ 15 | $ 7 |
Kentucky Utilities Co [Member] | Impact of adoption of ASU 2017-07 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit- Non Service | $ 1 | $ (1) |
Segment and Related Information (Details) $ in Millions |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2018
USD ($)
Integer
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | $ 2,126 | $ 1,951 | ||||||
Net Income | 452 | 403 | ||||||
Balance Sheet Data [Abstract] | ||||||||
Assets | 42,388 | $ 41,479 | ||||||
PPL Electric Utilities Corp [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | 639 | 573 | ||||||
Net Income | [1] | 148 | 79 | |||||
Balance Sheet Data [Abstract] | ||||||||
Assets | $ 10,343 | 10,082 | ||||||
Segment (Numeric) [Abstract] | ||||||||
Number of Reportable Segments | Integer | 1 | |||||||
Number of Operating Segments | Integer | 2 | |||||||
LG And E And KU Energy LLC [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | $ 872 | 809 | ||||||
Net Income | [2] | 142 | 103 | |||||
Balance Sheet Data [Abstract] | ||||||||
Assets | $ 14,834 | 14,802 | ||||||
Segment (Numeric) [Abstract] | ||||||||
Number of Reportable Segments | Integer | 1 | |||||||
Number of Operating Segments | Integer | 1 | |||||||
Louisville Gas And Electric Co [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | $ 419 | 391 | ||||||
Net Income | [1] | 72 | 54 | |||||
Balance Sheet Data [Abstract] | ||||||||
Assets | $ 6,587 | 6,559 | ||||||
Segment (Numeric) [Abstract] | ||||||||
Number of Reportable Segments | Integer | 1 | |||||||
Number of Operating Segments | Integer | 1 | |||||||
Kentucky Utilities Co [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | $ 471 | 437 | ||||||
Net Income | [2] | 87 | 63 | |||||
Balance Sheet Data [Abstract] | ||||||||
Assets | $ 8,276 | 8,254 | ||||||
Segment (Numeric) [Abstract] | ||||||||
Number of Reportable Segments | Integer | 1 | |||||||
Number of Operating Segments | Integer | 1 | |||||||
United Kingdom Regulated [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | $ 615 | 568 | ||||||
Net Income | 197 | 286 | ||||||
Balance Sheet Data [Abstract] | ||||||||
Assets | 17,444 | 16,813 | ||||||
Segment (Numeric) [Abstract] | ||||||||
Net property, plant and equipment not subject to accounting for the effects of certain types of regulation | 12,900 | 12,500 | ||||||
Kentucky Regulated [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | 872 | 809 | ||||||
Net Income | 133 | 95 | ||||||
Balance Sheet Data [Abstract] | ||||||||
Assets | 14,500 | 14,468 | ||||||
Kentucky Regulated [Member] | LG And E And KU Energy LLC [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | 872 | |||||||
Pennsylvania Regulated [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | 639 | 573 | ||||||
Net Income | 148 | 79 | ||||||
Balance Sheet Data [Abstract] | ||||||||
Assets | 10,356 | 10,082 | ||||||
Pennsylvania Regulated [Member] | PPL Electric Utilities Corp [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | 639 | |||||||
Corporate And Other [Member] | ||||||||
Income Statement Data [Abstract] | ||||||||
Operating Revenues from external customers | 0 | 1 | ||||||
Net Income | (26) | $ (57) | ||||||
Balance Sheet Data [Abstract] | ||||||||
Assets | $ 88 | $ 116 | ||||||
|
Revenue from Contracts with Customers (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018
USD ($)
Days
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 2,126 | $ 1,951 | |
Reconciliation of Revenue from Contracts with Customers [Abstract] | |||
Alternative Revenue Programs | 32 | ||
Other Revenue | (16) | ||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 2,142 | ||
Credit Loss from Contracts with Customers [Abstract] | |||
Provision for Doubtful Accounts | 10 | ||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract with Customer, Liability | 20 | $ 29 | |
Contract with Customer, Liability, Revenue Recognized | 17 | ||
Licensed energy suppliers [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 584 | ||
Residential [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 804 | ||
Commercial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 325 | ||
Industrial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 155 | ||
Other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 105 | ||
Wholesale - municipal [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 30 | ||
Wholesale - other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 34 | ||
Transmission [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 105 | ||
Pennsylvania Regulated [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 639 | 573 | |
Number Of Days Due From Invoice Date | Days | 21 | ||
United Kingdom Regulated [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 615 | 568 | |
Number Of Days Due From Invoice Date | Days | 14 | ||
Kentucky Regulated [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 872 | 809 | |
Number Of Days Due From Invoice Date | Days | 22 | ||
PPL Electric [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Number Of Days Due From Invoice Date | Days | 21 | ||
LGE [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Number Of Days Due From Invoice Date | Days | 22 | ||
KU [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Number Of Days Due From Invoice Date | Days | 22 | ||
PPL Electric Utilities Corp [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 639 | 573 | |
Number Of Days Due From Invoice Date | Days | 21 | ||
Reconciliation of Revenue from Contracts with Customers [Abstract] | |||
Alternative Revenue Programs | $ 2 | ||
Other Revenue | (4) | ||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 637 | ||
Credit Loss from Contracts with Customers [Abstract] | |||
Provision for Doubtful Accounts | 7 | ||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract with Customer, Liability | 11 | 19 | |
Contract with Customer, Liability, Revenue Recognized | 8 | ||
PPL Electric Utilities Corp [Member] | Licensed energy suppliers [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
PPL Electric Utilities Corp [Member] | Residential [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 408 | ||
PPL Electric Utilities Corp [Member] | Commercial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 98 | ||
PPL Electric Utilities Corp [Member] | Industrial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 13 | ||
PPL Electric Utilities Corp [Member] | Other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 13 | ||
PPL Electric Utilities Corp [Member] | Wholesale - municipal [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
PPL Electric Utilities Corp [Member] | Wholesale - other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
PPL Electric Utilities Corp [Member] | Distribution [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 532 | ||
PPL Electric Utilities Corp [Member] | Transmission [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 105 | ||
PPL Electric Utilities Corp [Member] | Pennsylvania Regulated [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | 639 | ||
LG And E And KU Energy LLC [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | 872 | 809 | |
Reconciliation of Revenue from Contracts with Customers [Abstract] | |||
Alternative Revenue Programs | 30 | ||
Other Revenue | (5) | ||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 897 | ||
Credit Loss from Contracts with Customers [Abstract] | |||
Provision for Doubtful Accounts | 2 | ||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract with Customer, Liability | 7 | 8 | |
Contract with Customer, Liability, Revenue Recognized | 8 | ||
LG And E And KU Energy LLC [Member] | Licensed energy suppliers [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
LG And E And KU Energy LLC [Member] | Residential [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 396 | ||
LG And E And KU Energy LLC [Member] | Commercial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 227 | ||
LG And E And KU Energy LLC [Member] | Industrial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 142 | ||
LG And E And KU Energy LLC [Member] | Other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 68 | ||
LG And E And KU Energy LLC [Member] | Wholesale - municipal [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 30 | ||
LG And E And KU Energy LLC [Member] | Wholesale - other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 34 | ||
LG And E And KU Energy LLC [Member] | Transmission [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
LG And E And KU Energy LLC [Member] | Kentucky Regulated [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 872 | ||
LG And E And KU Energy LLC [Member] | KU [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Number Of Days Due From Invoice Date | Days | 22 | ||
Louisville Gas And Electric Co [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 419 | 391 | |
Number Of Days Due From Invoice Date | Days | 22 | ||
Reconciliation of Revenue from Contracts with Customers [Abstract] | |||
Alternative Revenue Programs | $ 14 | ||
Other Revenue | (1) | ||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 432 | ||
Credit Loss from Contracts with Customers [Abstract] | |||
Provision for Doubtful Accounts | 1 | ||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract with Customer, Liability | 3 | 4 | |
Contract with Customer, Liability, Revenue Recognized | 4 | ||
Louisville Gas And Electric Co [Member] | Licensed energy suppliers [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
Louisville Gas And Electric Co [Member] | Residential [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 197 | ||
Louisville Gas And Electric Co [Member] | Commercial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 124 | ||
Louisville Gas And Electric Co [Member] | Industrial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 44 | ||
Louisville Gas And Electric Co [Member] | Other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 31 | ||
Louisville Gas And Electric Co [Member] | Wholesale - municipal [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
Louisville Gas And Electric Co [Member] | Wholesale - other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 36 | ||
Louisville Gas And Electric Co [Member] | Transmission [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
Kentucky Utilities Co [Member] | |||
Revenue from Contracts with Customers [Line Items] | |||
Operating Revenues | $ 471 | $ 437 | |
Number Of Days Due From Invoice Date | Days | 22 | ||
Reconciliation of Revenue from Contracts with Customers [Abstract] | |||
Alternative Revenue Programs | $ 16 | ||
Other Revenue | (4) | ||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 483 | ||
Credit Loss from Contracts with Customers [Abstract] | |||
Provision for Doubtful Accounts | 1 | ||
Contract with Customer, Asset and Liability [Abstract] | |||
Contract with Customer, Liability | 4 | $ 4 | |
Contract with Customer, Liability, Revenue Recognized | 4 | ||
Kentucky Utilities Co [Member] | Licensed energy suppliers [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 0 | ||
Kentucky Utilities Co [Member] | Residential [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 199 | ||
Kentucky Utilities Co [Member] | Commercial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 103 | ||
Kentucky Utilities Co [Member] | Industrial [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 98 | ||
Kentucky Utilities Co [Member] | Other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 37 | ||
Kentucky Utilities Co [Member] | Wholesale - municipal [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 30 | ||
Kentucky Utilities Co [Member] | Wholesale - other [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | 16 | ||
Kentucky Utilities Co [Member] | Transmission [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Revenue from Contracts with Customers | $ 0 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income (Numerator) [Abstract] | ||
Net Income | $ 452 | $ 403 |
Less amounts allocated to participating securities | 1 | 1 |
Net income available to PPL common shareowners - Basic | 451 | 402 |
Net income available to PPL common shareowners - Diluted | $ 451 | $ 402 |
Shares of Common Stock (Denominator) [Abstract] | ||
Weighted-average shares - Basic EPS (in shares) | 694,514 | 680,882 |
Add incremental non-participating securities: [Abstract] | ||
Share-based payment awards (in shares) | 808 | 2,202 |
Weighted-average shares - Diluted EPS (in shares) | 695,322 | 683,084 |
Basic EPS - Available to PPL common shareowners: [Abstract] | ||
Net Income Available to PPL common shareowners (in dollars per share) | $ 0.65 | $ 0.59 |
Diluted EPS - Available to PPL common shareowners: [Abstract] | ||
Net Income Available to PPL common shareowners (in dollars per share) | $ 0.65 | $ 0.59 |
Shares Issued (Numeric) [Abstract] | ||
Common stock issued under stock-based compensation plans (in shares) | 476 | 887 |
Common stock issued under dividend reinvestment plan (in shares) | 485 | 445 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from the computations of diluted EPS | 230 | 696 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from the computations of diluted EPS | 20 | 0 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 13, 2018 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | $ (64) | $ 17 | |
Reconciliation of Income Tax Expense [Abstract] | |||
Federal income tax on Income Before Income Taxes at statutory tax rate | 119 | 186 | |
Increase (decrease) due to: [Abstract] | |||
State income taxes, net of federal income tax benefit | 15 | 13 | |
Valuation allowance adjustments | 7 | 5 | |
Impact of lower U.K. income tax rates relative to U.S. income tax rates | (7) | (48) | |
U.S. income tax on foreign earnings - net of foreign tax credit | 1 | (9) | |
Impact of the U.K. Finance Acts | (1) | (3) | |
Depreciation and other items not normalized | (12) | (3) | |
Interest benefit on U.K. financing entities | (5) | (4) | |
Stock-based compensation | 1 | (3) | |
Other | (1) | (5) | |
Total increase (decrease) | (2) | (57) | |
Total income taxes | 117 | 129 | |
LKE [Member] | Tax Cuts And Jobs Act [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Deferred Income Tax Expense (Benefit) | $ 9 | ||
LGE [Member] | Kentucky tax reform [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | 16 | ||
KU [Member] | Kentucky tax reform [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | 19 | ||
PPL Electric Utilities Corp [Member] | |||
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | (5) | 11 | |
Reconciliation of Income Tax Expense [Abstract] | |||
Federal income tax on Income Before Income Taxes at statutory tax rate | 41 | 44 | |
Increase (decrease) due to: [Abstract] | |||
State income taxes, net of federal income tax benefit | 15 | 8 | |
Depreciation and other items not normalized | (7) | (2) | |
Stock-based compensation | 0 | (2) | |
Other | 0 | 0 | |
Total increase (decrease) | 8 | 4 | |
Total income taxes | 49 | 48 | |
LG And E And KU Energy LLC [Member] | |||
Reconciliation of Income Tax Expense [Abstract] | |||
Federal income tax on Income Before Income Taxes at statutory tax rate | 38 | 58 | |
Increase (decrease) due to: [Abstract] | |||
State income taxes, net of federal income tax benefit | 8 | 6 | |
Amortization of investment tax credit | 0 | 0 | |
Depreciation and other items not normalized | (5) | 0 | |
Stock-based compensation | 0 | 0 | |
Other | (2) | (1) | |
Total increase (decrease) | 1 | 5 | |
Total income taxes | 39 | 63 | |
LG And E And KU Energy LLC [Member] | Kentucky tax reform [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Deferred Income Tax Expense (Benefit) | 9 | ||
LG And E And KU Energy LLC [Member] | LGE [Member] | Kentucky tax reform [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | 16 | ||
LG And E And KU Energy LLC [Member] | KU [Member] | Kentucky tax reform [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | 19 | ||
Louisville Gas And Electric Co [Member] | |||
Reconciliation of Income Tax Expense [Abstract] | |||
Federal income tax on Income Before Income Taxes at statutory tax rate | 20 | 30 | |
Increase (decrease) due to: [Abstract] | |||
State income taxes, net of federal income tax benefit | 4 | 3 | |
Depreciation and other items not normalized | (2) | 0 | |
Other | (1) | 0 | |
Total increase (decrease) | 1 | 3 | |
Total income taxes | 21 | 33 | |
Louisville Gas And Electric Co [Member] | Kentucky tax reform [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | 16 | ||
Kentucky Utilities Co [Member] | |||
Reconciliation of Income Tax Expense [Abstract] | |||
Federal income tax on Income Before Income Taxes at statutory tax rate | 23 | 36 | |
Increase (decrease) due to: [Abstract] | |||
State income taxes, net of federal income tax benefit | 5 | 4 | |
Depreciation and other items not normalized | (3) | 0 | |
Other | (1) | (1) | |
Total increase (decrease) | 1 | 3 | |
Total income taxes | $ 24 | $ 39 | |
Kentucky Utilities Co [Member] | Kentucky tax reform [Member] | Subsequent Event [Member] | |||
Income Taxes [Line Items] | |||
Increase (Decrease) in Regulatory Assets and Liabilities | $ 19 |
Utility Rate Regulation - Regulatory Assets (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Regulatory Assets [Line Items] | ||
Current regulatory assets | $ 28 | $ 34 |
Noncurrent regulatory assets | 1,519 | 1,504 |
Environmental Cost Recovery [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 5 |
Generation Formula Rate [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 2 | 6 |
Smart Meter Rider [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 15 | 15 |
Act 129 Compliance Rider [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 7 | 0 |
Defined Benefit Plans [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 866 | 880 |
Taxes Recoverable Through Future Rates [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 3 | 3 |
Storm Costs [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 47 | 33 |
Unamortized Loss On Debt [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 51 | 54 |
Interest Rate Swaps [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 22 | 26 |
Terminated Interest Rate Swap [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 91 | 92 |
Accumulated Cost Of Removal Of Utility Plant [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 176 | 173 |
Asset Retirement Obligations [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 247 | 234 |
Plant outage costs [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 6 | 3 |
Other Regulatory Assets [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 5 | 5 |
Noncurrent regulatory assets | 9 | 9 |
PPL Electric Utilities Corp [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 16 | 16 |
Noncurrent regulatory assets | 726 | 709 |
PPL Electric Utilities Corp [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 0 |
PPL Electric Utilities Corp [Member] | Generation Formula Rate [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 0 |
PPL Electric Utilities Corp [Member] | Smart Meter Rider [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 15 | 15 |
PPL Electric Utilities Corp [Member] | Act 129 Compliance Rider [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 7 | 0 |
PPL Electric Utilities Corp [Member] | Defined Benefit Plans [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 496 | 504 |
PPL Electric Utilities Corp [Member] | Taxes Recoverable Through Future Rates [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 3 | 3 |
PPL Electric Utilities Corp [Member] | Storm Costs [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 17 | 0 |
PPL Electric Utilities Corp [Member] | Unamortized Loss On Debt [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 27 | 29 |
PPL Electric Utilities Corp [Member] | Interest Rate Swaps [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 0 | 0 |
PPL Electric Utilities Corp [Member] | Terminated Interest Rate Swap [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 0 | 0 |
PPL Electric Utilities Corp [Member] | Accumulated Cost Of Removal Of Utility Plant [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 176 | 173 |
PPL Electric Utilities Corp [Member] | Asset Retirement Obligations [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 0 | 0 |
PPL Electric Utilities Corp [Member] | Plant outage costs [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 0 |
PPL Electric Utilities Corp [Member] | Other Regulatory Assets [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 1 | 1 |
Noncurrent regulatory assets | 0 | 0 |
LG And E And KU Energy LLC [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 12 | 18 |
Noncurrent regulatory assets | 793 | 795 |
LG And E And KU Energy LLC [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 5 |
LG And E And KU Energy LLC [Member] | Generation Formula Rate [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 2 | 6 |
LG And E And KU Energy LLC [Member] | Defined Benefit Plans [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 370 | 376 |
LG And E And KU Energy LLC [Member] | Storm Costs [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 30 | 33 |
LG And E And KU Energy LLC [Member] | Unamortized Loss On Debt [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 24 | 25 |
LG And E And KU Energy LLC [Member] | Interest Rate Swaps [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 22 | 26 |
LG And E And KU Energy LLC [Member] | Terminated Interest Rate Swap [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 91 | 92 |
LG And E And KU Energy LLC [Member] | Asset Retirement Obligations [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 247 | 234 |
LG And E And KU Energy LLC [Member] | Plant outage costs [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 6 | 3 |
LG And E And KU Energy LLC [Member] | Other Regulatory Assets [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 4 | 4 |
Noncurrent regulatory assets | 9 | 9 |
Louisville Gas And Electric Co [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 10 | 12 |
Noncurrent regulatory assets | 406 | 411 |
Louisville Gas And Electric Co [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 5 |
Louisville Gas And Electric Co [Member] | Generation Formula Rate [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 0 |
Louisville Gas And Electric Co [Member] | Defined Benefit Plans [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 230 | 234 |
Louisville Gas And Electric Co [Member] | Storm Costs [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 16 | 18 |
Louisville Gas And Electric Co [Member] | Unamortized Loss On Debt [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 15 | 16 |
Louisville Gas And Electric Co [Member] | Interest Rate Swaps [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 22 | 26 |
Louisville Gas And Electric Co [Member] | Terminated Interest Rate Swap [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 53 | 54 |
Louisville Gas And Electric Co [Member] | Asset Retirement Obligations [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 67 | 61 |
Louisville Gas And Electric Co [Member] | Plant outage costs [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 6 | 3 |
Louisville Gas And Electric Co [Member] | Other Regulatory Assets [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 4 | 4 |
Noncurrent regulatory assets | 3 | 2 |
Kentucky Utilities Co [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 2 | 6 |
Noncurrent regulatory assets | 387 | 384 |
Kentucky Utilities Co [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 0 |
Kentucky Utilities Co [Member] | Generation Formula Rate [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 2 | 6 |
Kentucky Utilities Co [Member] | Defined Benefit Plans [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 140 | 142 |
Kentucky Utilities Co [Member] | Storm Costs [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 14 | 15 |
Kentucky Utilities Co [Member] | Unamortized Loss On Debt [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 9 | 9 |
Kentucky Utilities Co [Member] | Interest Rate Swaps [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 0 | 0 |
Kentucky Utilities Co [Member] | Terminated Interest Rate Swap [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 38 | 38 |
Kentucky Utilities Co [Member] | Asset Retirement Obligations [Member] | ||
Regulatory Assets [Line Items] | ||
Noncurrent regulatory assets | 180 | 173 |
Kentucky Utilities Co [Member] | Plant outage costs [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 0 |
Kentucky Utilities Co [Member] | Other Regulatory Assets [Member] | ||
Regulatory Assets [Line Items] | ||
Current regulatory assets | 0 | 0 |
Noncurrent regulatory assets | $ 6 | $ 7 |
Utility Rate Regulation - Regulatory Liabilities (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | $ 158 | $ 95 |
Noncurrent regulatory liabilities | 2,689 | 2,704 |
Environmental Cost Recovery [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 18 | 1 |
Generation Supply Charge [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 33 | 34 |
Transmission Service Charge [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 16 | 9 |
Universal Service Rider [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 24 | 26 |
Transmission Formula Rate [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 10 | 9 |
Fuel Adjustment Clause [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 2 | 3 |
Storm Damage Expense Rider [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 12 | 8 |
Accumulated Cost Of Removal Of Utility Plant [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 677 | 677 |
Power Purchase Agreement OVEC [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 66 | 68 |
Net deferred taxes [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 1,839 | 1,853 |
Defined Benefit Plans [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 28 | 27 |
Terminated interest rate swaps [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 74 | 74 |
TCJA bill credit [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 34 | 0 |
Other Regulatory Liabilities [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 9 | 5 |
Noncurrent regulatory liabilities | 5 | 5 |
PPL Electric Utilities Corp [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 95 | 86 |
Noncurrent regulatory liabilities | 662 | 668 |
PPL Electric Utilities Corp [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | Generation Supply Charge [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 33 | 34 |
PPL Electric Utilities Corp [Member] | Transmission Service Charge [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 16 | 9 |
PPL Electric Utilities Corp [Member] | Universal Service Rider [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 24 | 26 |
PPL Electric Utilities Corp [Member] | Transmission Formula Rate [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 10 | 9 |
PPL Electric Utilities Corp [Member] | Fuel Adjustment Clause [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | Storm Damage Expense Rider [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 12 | 8 |
PPL Electric Utilities Corp [Member] | Accumulated Cost Of Removal Of Utility Plant [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | Power Purchase Agreement OVEC [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | Net deferred taxes [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 660 | 668 |
PPL Electric Utilities Corp [Member] | Defined Benefit Plans [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | Terminated interest rate swaps [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | TCJA bill credit [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | Other Regulatory Liabilities [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 0 | 0 |
Noncurrent regulatory liabilities | 2 | 0 |
LG And E And KU Energy LLC [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 63 | 9 |
Noncurrent regulatory liabilities | 2,027 | 2,036 |
LG And E And KU Energy LLC [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 18 | 1 |
LG And E And KU Energy LLC [Member] | Fuel Adjustment Clause [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 2 | 3 |
LG And E And KU Energy LLC [Member] | Gas Line Tracker [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 2 | 3 |
LG And E And KU Energy LLC [Member] | Accumulated Cost Of Removal Of Utility Plant [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 677 | 677 |
LG And E And KU Energy LLC [Member] | Power Purchase Agreement OVEC [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 66 | 68 |
LG And E And KU Energy LLC [Member] | Net deferred taxes [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 1,179 | 1,185 |
LG And E And KU Energy LLC [Member] | Defined Benefit Plans [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 28 | 27 |
LG And E And KU Energy LLC [Member] | Terminated interest rate swaps [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 74 | 74 |
LG And E And KU Energy LLC [Member] | TCJA bill credit [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 34 | 0 |
LG And E And KU Energy LLC [Member] | Other Regulatory Liabilities [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 7 | 2 |
Noncurrent regulatory liabilities | 3 | 5 |
Louisville Gas And Electric Co [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 29 | 3 |
Noncurrent regulatory liabilities | 912 | 919 |
Louisville Gas And Electric Co [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 7 | 0 |
Louisville Gas And Electric Co [Member] | Fuel Adjustment Clause [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 0 | 0 |
Louisville Gas And Electric Co [Member] | Gas Line Tracker [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 2 | 3 |
Louisville Gas And Electric Co [Member] | Accumulated Cost Of Removal Of Utility Plant [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 280 | 282 |
Louisville Gas And Electric Co [Member] | Power Purchase Agreement OVEC [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 46 | 47 |
Louisville Gas And Electric Co [Member] | Net deferred taxes [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 549 | 552 |
Louisville Gas And Electric Co [Member] | Defined Benefit Plans [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 0 | 0 |
Louisville Gas And Electric Co [Member] | Terminated interest rate swaps [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 37 | 37 |
Louisville Gas And Electric Co [Member] | TCJA bill credit [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 16 | 0 |
Louisville Gas And Electric Co [Member] | Other Regulatory Liabilities [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 4 | 0 |
Noncurrent regulatory liabilities | 0 | 1 |
Kentucky Utilities Co [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 34 | 6 |
Noncurrent regulatory liabilities | 1,115 | 1,117 |
Kentucky Utilities Co [Member] | Environmental Cost Recovery [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 11 | 1 |
Kentucky Utilities Co [Member] | Fuel Adjustment Clause [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 2 | 3 |
Kentucky Utilities Co [Member] | Gas Line Tracker [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 0 | 0 |
Kentucky Utilities Co [Member] | Accumulated Cost Of Removal Of Utility Plant [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 397 | 395 |
Kentucky Utilities Co [Member] | Power Purchase Agreement OVEC [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 20 | 21 |
Kentucky Utilities Co [Member] | Net deferred taxes [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 630 | 633 |
Kentucky Utilities Co [Member] | Defined Benefit Plans [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 28 | 27 |
Kentucky Utilities Co [Member] | Terminated interest rate swaps [Member] | ||
Regulatory Liabilities [Line Items] | ||
Noncurrent regulatory liabilities | 37 | 37 |
Kentucky Utilities Co [Member] | TCJA bill credit [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 18 | 0 |
Kentucky Utilities Co [Member] | Other Regulatory Liabilities [Member] | ||
Regulatory Liabilities [Line Items] | ||
Current regulatory liabilities | 3 | 2 |
Noncurrent regulatory liabilities | $ 3 | $ 4 |
Utility Rate Regulation - Regulatory Matters (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 20, 2018 |
Jan. 29, 2018 |
Jan. 10, 2018 |
Aug. 31, 2016 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
LKE [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase Decrease Amended Amount | $ 27 | |||||
LGE [Member] | Kentucky Public Service Commission [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Electric Service | $ 104 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Electric Service | 11 | |||||
LGE [Member] | Kentucky Public Service Commission [Member] | Gas Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Gas Service | 62 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Gas Service | 3 | |||||
LGE [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | $ 69 | |||||
Approved Revenue Reduction Refunded Through Existing Mechanisms | 20 | |||||
Approved Revenue Reduction Refunded Through New Bill Credit | 59 | |||||
Public Utilities, Approved Rate Increase (Decrease), Amount | 79 | |||||
Proposed Revenue Reduction Refunded Through Existing Mechanisms | 20 | |||||
Proposed Revenue Reduction Refunded Through New Bill Credit | 49 | |||||
LGE [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Gas Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 17 | |||||
KU [Member] | Kentucky Public Service Commission [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Electric Service | 155 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Electric Service | 17 | |||||
KU [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 91 | |||||
Approved Revenue Reduction Refunded Through Existing Mechanisms | 21 | |||||
Approved Revenue Reduction Refunded Through New Bill Credit | 87 | |||||
Public Utilities, Approved Rate Increase (Decrease), Amount | 108 | |||||
Proposed Revenue Reduction Refunded Through Existing Mechanisms | 21 | |||||
Proposed Revenue Reduction Refunded Through New Bill Credit | 70 | |||||
LG And E And KU Energy LLC [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase Decrease Amended Amount | 27 | |||||
LG And E And KU Energy LLC [Member] | LGE [Member] | ||||||
Regulatory Matters - Kentucky Activities - Gas Franchise (Numeric) [Abstract] | ||||||
Franchise Agreement Term | 5 years | |||||
Days of Notice to Modify Franchise Fee | 60 days | |||||
Franchise Fee Cap | 3.00% | |||||
Franchise Fee If Recovered From Customers | 0.00% | |||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Kentucky Public Service Commission [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Electric Service | 104 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Electric Service | 11 | |||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Kentucky Public Service Commission [Member] | Gas Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Gas Service | 62 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Gas Service | 3 | |||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 69 | |||||
Approved Revenue Reduction Refunded Through Existing Mechanisms | 20 | |||||
Approved Revenue Reduction Refunded Through New Bill Credit | 59 | |||||
Public Utilities, Approved Rate Increase (Decrease), Amount | 79 | |||||
Proposed Revenue Reduction Refunded Through Existing Mechanisms | 20 | |||||
Proposed Revenue Reduction Refunded Through New Bill Credit | 49 | |||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Gas Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 17 | |||||
LG And E And KU Energy LLC [Member] | KU [Member] | Kentucky Public Service Commission [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Electric Service | 155 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Electric Service | 17 | |||||
LG And E And KU Energy LLC [Member] | KU [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 91 | |||||
Approved Revenue Reduction Refunded Through Existing Mechanisms | 21 | |||||
Approved Revenue Reduction Refunded Through New Bill Credit | 87 | |||||
Public Utilities, Approved Rate Increase (Decrease), Amount | 108 | |||||
Proposed Revenue Reduction Refunded Through Existing Mechanisms | 21 | |||||
Proposed Revenue Reduction Refunded Through New Bill Credit | 70 | |||||
Louisville Gas And Electric Co [Member] | ||||||
Regulatory Matters - Kentucky Activities - Gas Franchise (Numeric) [Abstract] | ||||||
Franchise Agreement Term | 5 years | |||||
Days of Notice to Modify Franchise Fee | 60 days | |||||
Franchise Fee Cap | 3.00% | |||||
Franchise Fee If Recovered From Customers | 0.00% | |||||
Louisville Gas And Electric Co [Member] | Kentucky Public Service Commission [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Electric Service | 104 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Electric Service | 11 | |||||
Louisville Gas And Electric Co [Member] | Kentucky Public Service Commission [Member] | Gas Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Gas Service | 62 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Gas Service | 3 | |||||
Louisville Gas And Electric Co [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 69 | |||||
Approved Revenue Reduction Refunded Through Existing Mechanisms | 20 | |||||
Approved Revenue Reduction Refunded Through New Bill Credit | 59 | |||||
Public Utilities, Approved Rate Increase (Decrease), Amount | 79 | |||||
Public Utilities, Proposed Rate Increase Decrease Amended Amount | 10 | |||||
Proposed Revenue Reduction Refunded Through Existing Mechanisms | 20 | |||||
Proposed Revenue Reduction Refunded Through New Bill Credit | 49 | |||||
Louisville Gas And Electric Co [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Gas Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 17 | |||||
Kentucky Utilities Co [Member] | Kentucky Public Service Commission [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Advanced Metering Systems Deployment Estimated Capital Cost, Electric Service | 155 | |||||
Advanced Metering Systems Deployment Incremental O&M Cost, Electric Service | $ 17 | |||||
Kentucky Utilities Co [Member] | Kentucky Public Service Commission [Member] | TCJA Savings Distributed To Customers [Member] | Electric Rates [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Public Utilities, Proposed Rate Increase (Decrease), Amount | 91 | |||||
Approved Revenue Reduction Refunded Through Existing Mechanisms | 21 | |||||
Approved Revenue Reduction Refunded Through New Bill Credit | 87 | |||||
Public Utilities, Approved Rate Increase (Decrease), Amount | 108 | |||||
Public Utilities, Proposed Rate Increase Decrease Amended Amount | $ 17 | |||||
Proposed Revenue Reduction Refunded Through Existing Mechanisms | 21 | |||||
Proposed Revenue Reduction Refunded Through New Bill Credit | $ 70 | |||||
Unaffiliated Third Party Entity [Member] | PPL Electric [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Purchases of Accounts Receivable | $ 376 | $ 356 | ||||
Unaffiliated Third Party Entity [Member] | PPL Electric Utilities Corp [Member] | ||||||
Regulatory Matters - Kentucky Activities - Rate Case Proceedings (Numeric) [Abstract] | ||||||
Purchases of Accounts Receivable | $ 376 | $ 356 |
Utility Rate Regulation Utility Rate Regulation (Other) (Detail (Details) - Unaffiliated Third Party Entity [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
PPL Electric [Member] | ||
Purchases Of Accounts Receivable [Line Items] | ||
Purchases of Accounts Receivable | $ 376 | $ 356 |
PPL Electric Utilities Corp [Member] | ||
Purchases Of Accounts Receivable [Line Items] | ||
Purchases of Accounts Receivable | $ 376 | $ 356 |
Financing Activities - Credit Arrangements (Details) £ in Millions, $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2018
GBP (£)
|
Jan. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
GBP (£)
|
|
UNITED KINGDOM | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | £ | £ 1,315 | ||||
Borrowed | £ | 497 | £ 448 | |||
Letters of Credit and Commercial Paper Issued | £ | 4 | 4 | |||
Unused Capacity | $ 1,100 | 816 | |||
UNITED KINGDOM | Uncommitted Credit Facilities [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | £ | 130 | ||||
Borrowed | £ | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | £ | 4 | 4 | |||
Unused Capacity | £ | 126 | ||||
WPD PLC [Member] | UNITED KINGDOM | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2022 | ||||
Capacity | £ | 210 | ||||
Borrowed | $ 200 | 145 | $ 200 | 148 | |
Letters of Credit and Commercial Paper Issued | £ | 0 | £ 0 | |||
Unused Capacity | £ | £ 67 | ||||
Interest rate on outstanding borrowing | 2.47% | 2.47% | 2.17% | 2.17% | |
Borrowings | £ | £ 143 | ||||
WPD PLC [Member] | UNITED KINGDOM | Index Linked Term Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Dec. 31, 2018 | ||||
Capacity | £ | 130 | ||||
Borrowed | $ 179 | 130 | |||
Letters of Credit and Commercial Paper Issued | £ | 0 | ||||
Unused Capacity | £ | £ 0 | ||||
Interest rate on outstanding borrowing | 1.77% | 1.77% | |||
WPD South West [Member] | UNITED KINGDOM | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jul. 31, 2021 | ||||
Capacity | £ | £ 245 | ||||
Borrowed | £ | 0 | £ 0 | |||
Letters of Credit and Commercial Paper Issued | £ | 0 | 0 | |||
Unused Capacity | £ | 245 | ||||
WPD East Midlands [Member] | UNITED KINGDOM | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jul. 31, 2021 | ||||
Capacity | £ | 300 | ||||
Borrowed | $ 216 | 157 | $ 244 | 180 | |
Letters of Credit and Commercial Paper Issued | £ | 0 | £ 0 | |||
Unused Capacity | £ | £ 143 | ||||
Interest rate on outstanding borrowing | 0.90% | 0.90% | 0.89% | 0.89% | |
WPD West Midlands [Member] | UNITED KINGDOM | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jul. 31, 2021 | ||||
Capacity | £ | £ 300 | ||||
Borrowed | $ 89 | 65 | $ 162 | £ 120 | |
Letters of Credit and Commercial Paper Issued | £ | 0 | £ 0 | |||
Unused Capacity | £ | £ 235 | ||||
Interest rate on outstanding borrowing | 0.90% | 0.90% | 0.89% | 0.89% | |
PPL Capital Funding [Member] | UNITED STATES | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | $ 1,350 | ||||
Borrowed | 0 | $ 0 | |||
Letters of Credit and Commercial Paper Issued | 369 | 248 | |||
Unused Capacity | $ 981 | ||||
PPL Capital Funding [Member] | UNITED STATES | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 950 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 345 | 230 | |||
Unused Capacity | $ 605 | ||||
PPL Capital Funding [Member] | UNITED STATES | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Nov. 30, 2018 | ||||
Capacity | $ 300 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 0 | 0 | |||
Unused Capacity | $ 300 | ||||
PPL Capital Funding [Member] | UNITED STATES | Bilateral Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Mar. 31, 2019 | ||||
Capacity | $ 100 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 24 | 18 | |||
Unused Capacity | $ 76 | ||||
PPL Electric [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 650 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 214 | 1 | |||
Unused Capacity | $ 436 | ||||
LKE [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2018 | ||||
Capacity | $ 75 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 0 | 0 | |||
Unused Capacity | 75 | ||||
LGE [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | 700 | ||||
Borrowed | 200 | 100 | |||
Letters of Credit and Commercial Paper Issued | 137 | 199 | |||
Unused Capacity | $ 363 | ||||
LGE [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 500 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 137 | 199 | |||
Unused Capacity | $ 363 | ||||
LGE [Member] | Term Loan Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2019 | ||||
Capacity | $ 200 | ||||
Borrowed | 200 | $ 100 | 100 | ||
Letters of Credit and Commercial Paper Issued | 0 | 0 | |||
Unused Capacity | 0 | ||||
KU [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | 598 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 276 | 243 | |||
Unused Capacity | $ 322 | ||||
KU [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 400 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 78 | 45 | |||
Unused Capacity | $ 322 | ||||
KU [Member] | Letter Of Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2020 | ||||
Capacity | $ 198 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 198 | 198 | |||
Unused Capacity | $ 0 | ||||
PPL Electric Utilities Corp [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 650 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 214 | 1 | |||
Unused Capacity | $ 436 | ||||
LG And E And KU Energy LLC [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2018 | ||||
Capacity | $ 75 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 0 | 0 | |||
Unused Capacity | 75 | ||||
LG And E And KU Energy LLC [Member] | LGE [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | 700 | ||||
Borrowed | 200 | 100 | |||
Letters of Credit and Commercial Paper Issued | 137 | 199 | |||
Unused Capacity | $ 363 | ||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 500 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 137 | 199 | |||
Unused Capacity | $ 363 | ||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Term Loan Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2019 | ||||
Capacity | $ 200 | ||||
Borrowed | 200 | 100 | 100 | ||
Letters of Credit and Commercial Paper Issued | 0 | 0 | |||
Unused Capacity | 0 | ||||
LG And E And KU Energy LLC [Member] | KU [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | 598 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 276 | 243 | |||
Unused Capacity | $ 322 | ||||
LG And E And KU Energy LLC [Member] | KU [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 400 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 78 | 45 | |||
Unused Capacity | $ 322 | ||||
LG And E And KU Energy LLC [Member] | KU [Member] | Letter Of Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2020 | ||||
Capacity | $ 198 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 198 | 198 | |||
Unused Capacity | 0 | ||||
Louisville Gas And Electric Co [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | 700 | ||||
Borrowed | 200 | 100 | |||
Letters of Credit and Commercial Paper Issued | 137 | 199 | |||
Unused Capacity | $ 363 | ||||
Louisville Gas And Electric Co [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 500 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 137 | 199 | |||
Unused Capacity | $ 363 | ||||
Louisville Gas And Electric Co [Member] | Term Loan Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2019 | ||||
Capacity | $ 200 | ||||
Borrowed | 200 | $ 100 | 100 | ||
Letters of Credit and Commercial Paper Issued | 0 | 0 | |||
Unused Capacity | 0 | ||||
Kentucky Utilities Co [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Capacity | 598 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 276 | 243 | |||
Unused Capacity | $ 322 | ||||
Kentucky Utilities Co [Member] | Syndicated Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Jan. 31, 2023 | ||||
Capacity | $ 400 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 78 | 45 | |||
Unused Capacity | $ 322 | ||||
Kentucky Utilities Co [Member] | Letter Of Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Expiration Date | Oct. 31, 2020 | ||||
Capacity | $ 198 | ||||
Borrowed | 0 | 0 | |||
Letters of Credit and Commercial Paper Issued | 198 | $ 198 | |||
Unused Capacity | $ 0 |
Financing Activities - Short-term Debt (Details) - Commercial Paper [Member] - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Short-term Debt [Line Items] | ||
Capacity | $ 2,350 | |
Commercial Paper Issuances | 773 | $ 474 |
Unused Capacity | $ 1,577 | |
PPL Capital Funding [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.44% | 1.64% |
Capacity | $ 1,000 | |
Commercial Paper Issuances | 345 | $ 230 |
Unused Capacity | $ 655 | |
PPL Electric [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.42% | |
Capacity | $ 650 | |
Commercial Paper Issuances | 213 | $ 0 |
Unused Capacity | $ 437 | |
LGE [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.23% | 1.83% |
Capacity | $ 350 | |
Commercial Paper Issuances | 137 | $ 199 |
Unused Capacity | $ 213 | |
KU [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.35% | 1.97% |
Capacity | $ 350 | |
Commercial Paper Issuances | 78 | $ 45 |
Unused Capacity | $ 272 | |
PPL Electric Utilities Corp [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.42% | |
Capacity | $ 650 | |
Commercial Paper Issuances | 213 | $ 0 |
Unused Capacity | $ 437 | |
LG And E And KU Energy LLC [Member] | LGE [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.23% | 1.83% |
Capacity | $ 350 | |
Commercial Paper Issuances | 137 | $ 199 |
Unused Capacity | $ 213 | |
LG And E And KU Energy LLC [Member] | KU [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.35% | 1.97% |
Capacity | $ 350 | |
Commercial Paper Issuances | 78 | $ 45 |
Unused Capacity | $ 272 | |
Louisville Gas And Electric Co [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.23% | 1.83% |
Capacity | $ 350 | |
Commercial Paper Issuances | 137 | $ 199 |
Unused Capacity | $ 213 | |
Kentucky Utilities Co [Member] | ||
Short-term Debt [Line Items] | ||
Weighted - Average Interest Rate | 2.35% | 1.97% |
Capacity | $ 350 | |
Commercial Paper Issuances | 78 | $ 45 |
Unused Capacity | $ 272 |
Financing Activities - Long-term Debt and ATM Program (Details) shares in Thousands, £ in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | |||||
---|---|---|---|---|---|---|---|
May 31, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2018
GBP (£)
|
Mar. 31, 2018
USD ($)
shares
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2018
GBP (£)
|
Feb. 28, 2018
USD ($)
|
|
At-the-Market Stock Offering Program (Numeric) [Abstract] | |||||||
Net proceeds from issuance of common stock | $ 100 | $ 73 | |||||
WPD South Wales PLC [Member] | Index Linked Senior Unsecured Notes [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | £ | £ 30 | ||||||
Stated interest rate | 0.01% | 0.01% | 0.01% | ||||
Proceeds from debt, net of issuance costs | £ | £ 31 | ||||||
Maturity date | Dec. 31, 2036 | Dec. 31, 2036 | |||||
Proceeds from debt, including premium net of debt issuance costs | $ 44 | ||||||
LGE [Member] | Senior Debt Obligations [Member] | Pollution Control Revenue Bonds, 2001 Series A [Member] | Remarketed [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 28 | $ 28 | |||||
Stated interest rate | 2.30% | 2.30% | 2.30% | ||||
Maturity date | Dec. 31, 2026 | Dec. 31, 2026 | |||||
Repurchase date of debt instruments | Sep. 01, 2021 | Sep. 01, 2021 | |||||
LGE [Member] | Senior Debt Obligations [Member] | Pollution Control Revenue Bonds, 2001 Series B [Member] | Remarketed [Member] | Subsequent Event [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 35 | ||||||
Stated interest rate | 2.55% | ||||||
Maturity date | Dec. 31, 2027 | ||||||
Repurchase date of debt instruments | May 03, 2021 | ||||||
LGE [Member] | Senior Debt Obligations [Member] | Jefferson County Pollution Control Revenue Bonds, 2001 Series B [Member] | Remarketed [Member] | Subsequent Event [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 35 | ||||||
Stated interest rate | 2.55% | ||||||
Maturity date | Dec. 31, 2027 | ||||||
Repurchase date of debt instruments | May 03, 2021 | ||||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Senior Debt Obligations [Member] | Pollution Control Revenue Bonds, 2001 Series A [Member] | Remarketed [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 28 | $ 28 | |||||
Stated interest rate | 2.30% | 2.30% | 2.30% | ||||
Maturity date | Dec. 31, 2026 | Dec. 31, 2026 | |||||
Repurchase date of debt instruments | Sep. 01, 2021 | Sep. 01, 2021 | |||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Senior Debt Obligations [Member] | Pollution Control Revenue Bonds, 2001 Series B [Member] | Remarketed [Member] | Subsequent Event [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 35 | ||||||
Stated interest rate | 2.55% | ||||||
Maturity date | Dec. 31, 2027 | ||||||
Repurchase date of debt instruments | May 03, 2021 | ||||||
LG And E And KU Energy LLC [Member] | LGE [Member] | Senior Debt Obligations [Member] | Jefferson County Pollution Control Revenue Bonds, 2001 Series B [Member] | Remarketed [Member] | Subsequent Event [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 35 | ||||||
Stated interest rate | 2.55% | ||||||
Maturity date | Dec. 31, 2027 | ||||||
Repurchase date of debt instruments | May 03, 2021 | ||||||
LG And E And KU Energy LLC [Member] | Affiliated Entity [Member] | Note Payable [Member] | Subsequent Event [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Stated interest rate | 4.00% | ||||||
Maturity date | May 31, 2028 | ||||||
Notes Payable, Noncurrent | $ 250 | ||||||
Louisville Gas And Electric Co [Member] | Senior Debt Obligations [Member] | Pollution Control Revenue Bonds, 2001 Series A [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 28 | $ 28 | |||||
Stated interest rate | 2.30% | 2.30% | 2.30% | ||||
Maturity date | Dec. 31, 2026 | Dec. 31, 2026 | |||||
Repurchase date of debt instruments | Sep. 01, 2021 | Sep. 01, 2021 | |||||
Louisville Gas And Electric Co [Member] | Senior Debt Obligations [Member] | Pollution Control Revenue Bonds, 2001 Series B [Member] | Remarketed [Member] | Subsequent Event [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 35 | ||||||
Stated interest rate | 2.55% | ||||||
Maturity date | Dec. 31, 2027 | ||||||
Repurchase date of debt instruments | May 03, 2021 | ||||||
Louisville Gas And Electric Co [Member] | Senior Debt Obligations [Member] | Jefferson County Pollution Control Revenue Bonds, 2001 Series B [Member] | Remarketed [Member] | Subsequent Event [Member] | |||||||
Long-term Debt (Numeric) [Abstract] | |||||||
Principal amount | $ 35 | ||||||
Stated interest rate | 2.55% | ||||||
Maturity date | Dec. 31, 2027 | ||||||
Repurchase date of debt instruments | May 03, 2021 | ||||||
At The Market Stock Offering Program [Member] | |||||||
At-the-Market Stock Offering Program (Numeric) [Abstract] | |||||||
Aggregate sales price of common stock based on two separate equity distribution agreements | $ 1,000 | ||||||
Stock Issued During Period, Shares, New Issues | shares | 3,000 | ||||||
Net proceeds from issuance of common stock | $ 85 |
Financing Activities - Distributions (Details) - $ / shares |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 28, 2018 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Distributions (Numeric) [Abstract] | |||
Dividend payable date of quarterly common stock dividend | Apr. 02, 2018 | ||
Current quarterly common stock dividend (in dollars per share) | $ 0.410 | $ 0.41 | $ 0.395 |
Annualized current quarterly common stock dividend (in dollars per share) | $ 1.64 |
Defined Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Pension Plan [Member] | U.S. | ||
Net Periodic Defined Benefit Costs (Credits) (Details) [Abstract] | ||
Service cost | $ 16 | $ 17 |
Interest cost | 39 | 42 |
Expected return on plan assets | (62) | (57) |
Amortization of: [Abstract] | ||
Prior service cost | 2 | 2 |
Actuarial loss | 22 | 20 |
Net periodic defined benefit costs (credits) before settlements and special termination benefits | 17 | 24 |
Special termination benefits | 0 | 2 |
Net periodic defined benefit costs (credits) | 17 | 26 |
Pension Plan [Member] | U.K. | ||
Net Periodic Defined Benefit Costs (Credits) (Details) [Abstract] | ||
Service cost | 21 | 19 |
Interest cost | 47 | 43 |
Expected return on plan assets | (150) | (125) |
Amortization of: [Abstract] | ||
Prior service cost | 0 | 0 |
Actuarial loss | 39 | 35 |
Net periodic defined benefit costs (credits) before settlements and special termination benefits | (43) | (28) |
Special termination benefits | 0 | 0 |
Net periodic defined benefit costs (credits) | (43) | (28) |
Other Postretirement Benefits Plan [Member] | ||
Net Periodic Defined Benefit Costs (Credits) (Details) [Abstract] | ||
Service cost | 1 | 2 |
Interest cost | 3 | 6 |
Expected return on plan assets | (4) | (6) |
Amortization of: [Abstract] | ||
Prior service cost | (1) | 0 |
Net periodic defined benefit costs (credits) | (1) | 2 |
PPL Electric Utilities Corp [Member] | PPL Services [Member] | ||
Net Periodic Defined Benefit Costs Allocated to Subsidiary by Sponsor (Numeric) [Abstract] | ||
Costs allocated to subsidiary by plan sponsors | 4 | 8 |
LG And E And KU Energy LLC [Member] | Pension Plan [Member] | ||
Net Periodic Defined Benefit Costs (Credits) (Details) [Abstract] | ||
Service cost | 7 | 7 |
Interest cost | 16 | 16 |
Expected return on plan assets | (26) | (22) |
Amortization of: [Abstract] | ||
Prior service cost | 2 | 2 |
Actuarial loss | $ 10 | $ 11 |
Regulatory Asset Amortization Period | 15 years | 15 years |
Deferred recovery of the difference between pension costs calculated with pension accounting policy and pension cost using 15 year amortization period | $ 4 | $ 5 |
Net periodic defined benefit costs (credits) | 9 | 14 |
LG And E And KU Energy LLC [Member] | Other Postretirement Benefits Plan [Member] | ||
Net Periodic Defined Benefit Costs (Credits) (Details) [Abstract] | ||
Service cost | 1 | 1 |
Interest cost | 2 | 2 |
Expected return on plan assets | (2) | (1) |
Amortization of: [Abstract] | ||
Net periodic defined benefit costs (credits) | 1 | 2 |
Louisville Gas And Electric Co [Member] | LKE [Member] | ||
Net Periodic Defined Benefit Costs Allocated to Subsidiary by Sponsor (Numeric) [Abstract] | ||
Costs allocated to subsidiary by plan sponsors | 2 | 3 |
Louisville Gas And Electric Co [Member] | Pension Plan [Member] | ||
Net Periodic Defined Benefit Costs (Credits) (Details) [Abstract] | ||
Interest cost | 3 | 3 |
Expected return on plan assets | (5) | (5) |
Amortization of: [Abstract] | ||
Prior service cost | 1 | 1 |
Actuarial loss | $ 2 | $ 3 |
Regulatory Asset Amortization Period | 15 years | 15 years |
Deferred recovery of the difference between pension costs calculated with pension accounting policy and pension cost using 15 year amortization period | $ 1 | $ 1 |
Net periodic defined benefit costs (credits) | 1 | 2 |
Kentucky Utilities Co [Member] | LKE [Member] | ||
Net Periodic Defined Benefit Costs Allocated to Subsidiary by Sponsor (Numeric) [Abstract] | ||
Costs allocated to subsidiary by plan sponsors | $ 1 | $ 4 |
Commitments and Contingencies - Legal Matters and Regulatory Issues (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018
claim
resident
coal-fired_unit
mi
| |
LGE [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of residents that filed class action suit | resident | 6 |
Number of miles within plant that would include a class of residents | 4 |
Number of remaining unresolved Clean Air Act violation claims after July 2014 court ruling | claim | 1 |
Generating units retired at the Cane Run plant | coal-fired_unit | 3 |
LGE [Member] | Minimum [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of miles within plant that would include a class of residents | 1 |
LGE [Member] | Maximum [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of miles within plant that would include a class of residents | 3 |
LG And E And KU Energy LLC [Member] | LGE [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of residents that filed class action suit | resident | 6 |
Number of miles within plant that would include a class of residents | 4 |
Number of remaining unresolved Clean Air Act violation claims after July 2014 court ruling | claim | 1 |
Generating units retired at the Cane Run plant | coal-fired_unit | 3 |
LG And E And KU Energy LLC [Member] | LGE [Member] | Minimum [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of miles within plant that would include a class of residents | 1 |
LG And E And KU Energy LLC [Member] | LGE [Member] | Maximum [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of miles within plant that would include a class of residents | 3 |
Louisville Gas And Electric Co [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of residents that filed class action suit | resident | 6 |
Number of miles within plant that would include a class of residents | 4 |
Number of remaining unresolved Clean Air Act violation claims after July 2014 court ruling | claim | 1 |
Generating units retired at the Cane Run plant | coal-fired_unit | 3 |
Louisville Gas And Electric Co [Member] | Minimum [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of miles within plant that would include a class of residents | 1 |
Louisville Gas And Electric Co [Member] | Maximum [Member] | |
Legal Matters - Cane Run Environmental Claims (Numeric) [Abstract] | |
Number of miles within plant that would include a class of residents | 3 |
Commitments and Contingencies - Environmental Matters and Other (Details) - PPL Electric Additional Sites [Member] - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
PPL Electric [Member] | ||
Environmental Matters - Superfund and Other Remediation (Numeric) [Abstract] | ||
Environmental site accrual | $ 11 | $ 10 |
PPL Electric Utilities Corp [Member] | ||
Environmental Matters - Superfund and Other Remediation (Numeric) [Abstract] | ||
Environmental site accrual | $ 11 | $ 10 |
Commitments and Contingencies - Guarantees and Other Assurances (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018
USD ($)
Integer
|
Dec. 31, 2017
USD ($)
|
|
Guarantor Obligations [Line Items] | ||
Recorded liability for all guarantees | $ 7 | $ 17 |
Other Guarantee (Numeric) [Abstract] | ||
Maximum aggregate coverage bodily injury and property damage | $ 225 | |
PPL Guarantee [Member] | Indemnification Guarantee [Member] | Indemnifications Related To WPD Midlands Acquisition [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure is not estimable | The maximum exposure and expiration of these indemnifications cannot be estimated because the maximum potential liability is not capped and the expiration date is not specified in the transaction documents. | |
PPL Guarantee [Member] | Indemnification Guarantee [Member] | WPD Indemnifications For Entities In Liquidation and Sales Of Assets [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure | $ 11 | |
Expiration date | 2020 | |
Minimum Period In Years That Indemnifications Generally Expire | Integer | 2 | |
Maximum Period In Years That Indemnifications Generally Expire | Integer | 7 | |
PPL Guarantee [Member] | Financial Guarantee [Member] | WPD Guarantee Of Pension And Other Obligations Of Unconsolidated Entities [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure | $ 99 | |
PPL Electric Guarantee [Member] | Indemnification Guarantee [Member] | Guarantee Of Inventory Value [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure | $ 17 | |
Expiration date | 2020 | |
LKE Guarantee [Member] | Indemnification Guarantee [Member] | Indemnification Of Lease Termination And Other Divestitures [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure | $ 201 | |
Expiration date | 2021 | |
Term of guarantee (in years) | 12 | |
Maximum exposure of guarantee related to terminated lease specific to operational, regulatory and environmental issues | $ 200 | |
LKE Guarantee [Member] | Financial Guarantee [Member] | LGE And KU Guarantee Of Shortfall Related To OVEC [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure is not estimable | The maximum exposure and the expiration date of these potential obligations are not presently determinable. | |
Contingent proportionate share of OVEC's outstanding debt | $ 117 | |
PPL Electric Utilities Corp [Member] | Indemnification Guarantee [Member] | Guarantee Of Inventory Value [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure | $ 17 | |
Expiration date | 2020 | |
LG And E And KU Energy LLC [Member] | ||
Guarantor Obligations [Line Items] | ||
Recorded liability for all guarantees | $ 11 | |
LG And E And KU Energy LLC [Member] | Indemnification Guarantee [Member] | Indemnification Of Lease Termination And Other Divestitures [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure | $ 201 | |
Expiration date | 2021 | |
Term of guarantee (in years) | 12 | |
Maximum exposure of guarantee related to terminated lease specific to operational, regulatory and environmental issues | $ 200 | |
LG And E And KU Energy LLC [Member] | Financial Guarantee [Member] | LGE And KU Guarantee Of Shortfall Related To OVEC [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure is not estimable | The maximum exposure and the expiration date of these potential obligations are not presently determinable. | |
Contingent proportionate share of OVEC's outstanding debt | $ 117 | |
Louisville Gas And Electric Co [Member] | Financial Guarantee [Member] | LGE And KU Guarantee Of Shortfall Related To OVEC [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure is not estimable | The maximum exposure and the expiration date of these potential obligations are not presently determinable. | |
Louisville Gas And Electric Co [Member] | LGE And KU Guarantee [Member] | Financial Guarantee [Member] | LGE And KU Guarantee Of Shortfall Related To OVEC [Member] | ||
Guarantor Obligations [Line Items] | ||
Contingent proportionate share of OVEC's outstanding debt | $ 81 | |
Kentucky Utilities Co [Member] | Financial Guarantee [Member] | LGE And KU Guarantee Of Shortfall Related To OVEC [Member] | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure is not estimable | The maximum exposure and the expiration date of these potential obligations are not presently determinable. | |
Kentucky Utilities Co [Member] | LGE And KU Guarantee [Member] | Financial Guarantee [Member] | LGE And KU Guarantee Of Shortfall Related To OVEC [Member] | ||
Guarantor Obligations [Line Items] | ||
Contingent proportionate share of OVEC's outstanding debt | $ 36 |
Related Party Transactions (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
May 31, 2018 |
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
Feb. 28, 2018 |
|
PPL Electric Utilities Corp [Member] | PPL Services [Member] | |||||
Support Costs (Details) [Abstract] | |||||
Support cost allocations from subsidiary of parent to registrant | $ 16 | $ 51 | |||
PPL Electric Utilities Corp [Member] | PPL EU Services [Member] | |||||
Support Costs (Details) [Abstract] | |||||
Support cost allocations from subsidiary of parent to registrant | 35 | 18 | |||
PPL Electric Utilities Corp [Member] | PPL Energy Funding [Member] | |||||
Intercompany Borrowings (Numeric) [Abstract] | |||||
Intercompany note with affiliate maximum borrowing capacity | 400 | ||||
Notes receivable from affiliate | 0 | $ 0 | |||
LG And E And KU Energy LLC [Member] | |||||
Intercompany Borrowings (Numeric) [Abstract] | |||||
Notes payable to affiliates | 237 | 225 | |||
Long-term debt to affiliate | 400 | 400 | |||
Interest Expense with Affiliate | 5 | 4 | |||
LG And E And KU Energy LLC [Member] | PPL Services [Member] | |||||
Support Costs (Details) [Abstract] | |||||
Support cost allocations from subsidiary of parent to registrant | 7 | 6 | |||
LG And E And KU Energy LLC [Member] | PPL Energy Funding [Member] | |||||
Intercompany Borrowings (Numeric) [Abstract] | |||||
Intercompany note with affiliate maximum borrowing capacity | 300 | ||||
Notes payable to affiliates | $ 237 | $ 225 | |||
Intercompany borrowings demand note rate on outstanding borrowing | 3.17% | 2.87% | |||
Intercompany Note Affiliate Maximum Borrowing Capacity Increase | $ 25 | ||||
LG And E And KU Energy LLC [Member] | PPL Affiliate [Member] | |||||
Intercompany Borrowings (Numeric) [Abstract] | |||||
Debt instrument term (in years) | 10 years | ||||
Long-term debt to affiliate | $ 400 | ||||
Interest rate on ten-year note | 3.50% | ||||
Interest Expense with Affiliate | $ 4 | 4 | |||
LG And E And KU Energy LLC [Member] | Note Payable [Member] | Affiliated Entity [Member] | Subsequent Event [Member] | |||||
Intercompany Borrowings (Numeric) [Abstract] | |||||
Stated interest rate | 4.00% | ||||
Maturity date | May 31, 2028 | ||||
Notes Payable, Noncurrent | $ 250 | ||||
Louisville Gas And Electric Co [Member] | LKS [Member] | |||||
Intercompany Billings by LKS (Details) [Abstract] | |||||
Intercompany billings between affiliates | 38 | 44 | |||
Kentucky Utilities Co [Member] | LKS [Member] | |||||
Intercompany Billings by LKS (Details) [Abstract] | |||||
Intercompany billings between affiliates | $ 42 | $ 44 |
Other Income (Expense)- net Other Income (Expense) - net (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Other Expense | ||
Economic foreign currency exchange contracts | $ 112 | $ 43 |
Charitable Contributions | 4 | 4 |
Miscellaneous | 1 | 11 |
Total Other Expense | 117 | 58 |
Other Income [Line Items] | ||
Defined benefit plans - non-service credits | 68 | 38 |
Allowance for Funds Used During Construction - equity component | 5 | 2 |
Miscellaneous | 1 | 9 |
Total Other Income | 74 | 49 |
Other Income (Expense) - net | (43) | (9) |
PPL Electric Utilities Corp [Member] | ||
Other Expense | ||
Charitable Contributions | 1 | 1 |
Defined benefit plans - non-service costs | 0 | 1 |
Total Other Expense | 1 | 2 |
Other Income [Line Items] | ||
Defined benefit plans - non-service credits | 2 | 0 |
Allowance for Funds Used During Construction - equity component | 5 | 2 |
Total Other Income | 7 | 2 |
Other Income (Expense) - net | $ 6 | $ 0 |
Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis Table (Details) - Recurring Fair Value Measurements [Member] - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Assets | ||
Cash and cash equivalents | $ 629 | $ 485 |
Restricted cash and cash equivalents | 24 | 26 |
Price risk management assets: | ||
Foreign currency contracts | 97 | 163 |
Cross-currency swaps | 79 | 101 |
Total price risk management assets | 176 | 264 |
Total assets | 829 | 775 |
Price risk management liabilities: | ||
Interest rate swaps | 22 | 26 |
Foreign currency contracts | 167 | 148 |
Total price risk management liabilities | 189 | 174 |
Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 629 | 485 |
Restricted cash and cash equivalents | 24 | 26 |
Price risk management assets: | ||
Foreign currency contracts | 0 | 0 |
Cross-currency swaps | 0 | 0 |
Total price risk management assets | 0 | 0 |
Total assets | 653 | 511 |
Price risk management liabilities: | ||
Interest rate swaps | 0 | 0 |
Foreign currency contracts | 0 | 0 |
Total price risk management liabilities | 0 | 0 |
Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Foreign currency contracts | 97 | 163 |
Cross-currency swaps | 79 | 101 |
Total price risk management assets | 176 | 264 |
Total assets | 176 | 264 |
Price risk management liabilities: | ||
Interest rate swaps | 22 | 26 |
Foreign currency contracts | 167 | 148 |
Total price risk management liabilities | 189 | 174 |
Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Foreign currency contracts | 0 | 0 |
Cross-currency swaps | 0 | 0 |
Total price risk management assets | 0 | 0 |
Total assets | 0 | 0 |
Price risk management liabilities: | ||
Interest rate swaps | 0 | 0 |
Foreign currency contracts | 0 | 0 |
Total price risk management liabilities | 0 | 0 |
PPL Electric Utilities Corp [Member] | ||
Assets | ||
Cash and cash equivalents | 20 | 49 |
Restricted cash and cash equivalents | 2 | 2 |
Price risk management assets: | ||
Total assets | 22 | 51 |
PPL Electric Utilities Corp [Member] | Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 20 | 49 |
Restricted cash and cash equivalents | 2 | 2 |
Price risk management assets: | ||
Total assets | 22 | 51 |
PPL Electric Utilities Corp [Member] | Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | 0 | 0 |
PPL Electric Utilities Corp [Member] | Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | 0 | 0 |
LG And E And KU Energy LLC [Member] | ||
Assets | ||
Cash and cash equivalents | 27 | 30 |
Price risk management assets: | ||
Total assets | 27 | 30 |
Price risk management liabilities: | ||
Interest rate swaps | 22 | 26 |
Total price risk management liabilities | 22 | 26 |
LG And E And KU Energy LLC [Member] | Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 27 | 30 |
Price risk management assets: | ||
Total assets | 27 | 30 |
Price risk management liabilities: | ||
Interest rate swaps | 0 | 0 |
Total price risk management liabilities | 0 | 0 |
LG And E And KU Energy LLC [Member] | Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | 0 | 0 |
Price risk management liabilities: | ||
Interest rate swaps | 22 | 26 |
Total price risk management liabilities | 22 | 26 |
LG And E And KU Energy LLC [Member] | Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | 0 | 0 |
Price risk management liabilities: | ||
Interest rate swaps | 0 | 0 |
Total price risk management liabilities | 0 | 0 |
Louisville Gas And Electric Co [Member] | ||
Assets | ||
Cash and cash equivalents | 14 | 15 |
Price risk management assets: | ||
Total assets | 14 | 15 |
Price risk management liabilities: | ||
Interest rate swaps | 22 | 26 |
Total price risk management liabilities | 22 | 26 |
Louisville Gas And Electric Co [Member] | Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 14 | 15 |
Price risk management assets: | ||
Total assets | 14 | 15 |
Price risk management liabilities: | ||
Interest rate swaps | 0 | 0 |
Total price risk management liabilities | 0 | 0 |
Louisville Gas And Electric Co [Member] | Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | 0 | 0 |
Price risk management liabilities: | ||
Interest rate swaps | 22 | 26 |
Total price risk management liabilities | 22 | 26 |
Louisville Gas And Electric Co [Member] | Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | 0 | 0 |
Price risk management liabilities: | ||
Interest rate swaps | 0 | 0 |
Total price risk management liabilities | 0 | 0 |
Kentucky Utilities Co [Member] | ||
Assets | ||
Cash and cash equivalents | 11 | 15 |
Price risk management assets: | ||
Total assets | 11 | 15 |
Kentucky Utilities Co [Member] | Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 11 | 15 |
Price risk management assets: | ||
Total assets | 11 | 15 |
Kentucky Utilities Co [Member] | Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | 0 | 0 |
Kentucky Utilities Co [Member] | Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Price risk management assets: | ||
Total assets | $ 0 | $ 0 |
Fair Value Measurements - Financial Instruments Not Recorded at Fair Value (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Carrying Amount [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | $ 20,464 | $ 20,195 |
Fair Value [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 23,577 | 23,783 |
PPL Electric Utilities Corp [Member] | Carrying Amount [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 3,298 | 3,298 |
PPL Electric Utilities Corp [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 3,632 | 3,769 |
LG And E And KU Energy LLC [Member] | Carrying Amount [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 5,259 | 5,159 |
LG And E And KU Energy LLC [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 5,654 | 5,670 |
Louisville Gas And Electric Co [Member] | Carrying Amount [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 1,808 | 1,709 |
Louisville Gas And Electric Co [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 1,925 | 1,865 |
Kentucky Utilities Co [Member] | Carrying Amount [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | 2,329 | 2,328 |
Kentucky Utilities Co [Member] | Fair Value [Member] | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | $ 2,546 | $ 2,605 |
Derivative Instruments and Hedging Activities - Intro (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Master Netting Arrangements (Numeric) [Line Items] | ||
Cash Collateral Obligation Under Master Netting Arrangement | $ 16 | $ 20 |
Cash collateral posted under master netting arrangements | 5 | 0 |
LG And E And KU Energy LLC [Member] | ||
Master Netting Arrangements (Numeric) [Line Items] | ||
Cash Collateral Obligation Under Master Netting Arrangement | 0 | 0 |
Cash collateral posted under master netting arrangements | 0 | 0 |
Louisville Gas And Electric Co [Member] | ||
Master Netting Arrangements (Numeric) [Line Items] | ||
Cash Collateral Obligation Under Master Netting Arrangement | 0 | 0 |
Cash collateral posted under master netting arrangements | 0 | 0 |
Kentucky Utilities Co [Member] | ||
Master Netting Arrangements (Numeric) [Line Items] | ||
Cash Collateral Obligation Under Master Netting Arrangement | 0 | 0 |
Cash collateral posted under master netting arrangements | $ 0 | $ 0 |
Derivative Instruments and Hedging Activities - Risk Disclosures (Details) £ in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
Mar. 31, 2018
GBP (£)
|
|
Cash Flow Hedges [Member] | Cross Currency Interest Rate Swap Contracts [Member] | ||||
Interest Rate Risk And Foreign Currency Risk [Line Items] | ||||
Notional amount | $ 702 | |||
Interest Rate Risk - Cash Flow Hedges (Numeric) [Abstract] | ||||
Earliest maturity date of cross-currency cash flow hedge contracts | 2021 | |||
Latest maturity date of cross-currency cash flow hedge contracts | 2028 | |||
Gain (Loss) on Interest Rate Cash Flow Hedge Ineffectiveness | $ 0 | $ 0 | ||
Cash Flow Hedges [Member] | Interest Rate Swap Contracts [Member] | ||||
Interest Rate Risk - Cash Flow Hedges (Numeric) [Abstract] | ||||
No or insignificant after-tax gains (losses) previously recorded in AOCI reclassified to earnings related to interest rate cash flow hedge contracts | For the three months ended March 31, 2018, PPL had no cash flow hedges reclassified into earnings associated with discontinued cash flow hedges. For the three months ended March 31, 2017, PPL had an insignificant amount of cash flow hedges reclassified into earnings associated with discontinued cash flow hedges. | |||
No or insignificant unrealized after-tax gains (losses) on interest rate cash flow hedge contracts expected to be reclassified into earnings during next 12 months | insignificant | |||
Gain (Loss) on Interest Rate Cash Flow Hedge Ineffectiveness | $ 0 | $ 0 | ||
Net Investment Hedges [Member] | Combined Foreign Currency Contracts And Intercompany Loans [Member] | ||||
Foreign Currency Risk - Net Investment Hedges (Numeric) [Abstract] | ||||
Net after tax gains (losses) on net investment hedges recognized in the foreign currency translation adjustment component of AOCI | 20 | $ 22 | ||
Net Investment Hedges [Member] | Foreign Currency Contracts [Member] | ||||
Interest Rate Risk And Foreign Currency Risk [Line Items] | ||||
Notional amount | $ 195 | £ 140 | ||
Maximum Termination Date Net Investment Hedges Classified As Economic Activity | Jun. 30, 2018 | |||
Economic Hedges [Member] | Foreign Currency Contracts [Member] | ||||
Interest Rate Risk And Foreign Currency Risk [Line Items] | ||||
Maximum Termination Date Net Investment Hedges Classified As Economic Activity | Aug. 31, 2020 | |||
Foreign Currency Risk - Economic Activity (Numeric) [Abstract] | ||||
Total exposure hedged related to foreign currency contracts for anticipated earnings hedges classified as economic activity | $ 2,900 | £ 2,100 | ||
Minimum Termination Date Net Investment Hedges Classified As Economic Activity | Apr. 30, 2018 | |||
Louisville Gas And Electric Co [Member] | Economic Hedges [Member] | Interest Rate Swap Contracts [Member] | ||||
Interest Rate Risk And Foreign Currency Risk [Line Items] | ||||
Notional amount | $ 147 | |||
Interest Rate Risk - Economic Activity (Numeric) [Abstract] | ||||
Year of expiration of the maximum maturity date of interest rate economic activity contracts | 2033 | |||
LGE [Member] | Economic Hedges [Member] | Interest Rate Swap Contracts [Member] | ||||
Interest Rate Risk And Foreign Currency Risk [Line Items] | ||||
Notional amount | $ 147 | |||
Interest Rate Risk - Economic Activity (Numeric) [Abstract] | ||||
Year of expiration of the maximum maturity date of interest rate economic activity contracts | 2033 | |||
LGE [Member] | LG And E And KU Energy LLC [Member] | Economic Hedges [Member] | Interest Rate Swap Contracts [Member] | ||||
Interest Rate Risk And Foreign Currency Risk [Line Items] | ||||
Notional amount | $ 147 | |||
Interest Rate Risk - Economic Activity (Numeric) [Abstract] | ||||
Year of expiration of the maximum maturity date of interest rate economic activity contracts | 2033 |
Derivative Instruments and Hedging Activities - Fair Values (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Designated As Hedging Instruments [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | $ 80 | $ 101 |
Liability value | 2 | 0 |
Designated As Hedging Instruments [Member] | Current Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 5 | 4 |
Designated As Hedging Instruments [Member] | Current Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Designated As Hedging Instruments [Member] | Current Assets [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 4 | 4 |
Designated As Hedging Instruments [Member] | Current Assets [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 1 | 0 |
Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 75 | 97 |
Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 75 | 97 |
Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Designated As Hedging Instruments [Member] | Current Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 2 | 0 |
Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 2 | 0 |
Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Not Designated As Hedging Instruments [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 96 | 163 |
Liability value | 187 | 174 |
Not Designated As Hedging Instruments [Member] | Current Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 51 | 45 |
Not Designated As Hedging Instruments [Member] | Current Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Not Designated As Hedging Instruments [Member] | Current Assets [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Not Designated As Hedging Instruments [Member] | Current Assets [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 51 | 45 |
Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 45 | 118 |
Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 45 | 118 |
Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 79 | 71 |
Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 4 | 4 |
Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 75 | 67 |
Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 108 | 103 |
Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 18 | 22 |
Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Cross Currency Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 0 | 0 |
Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Foreign Currency Contracts [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 90 | 81 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Liability value | 22 | 26 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Current Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Current Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 4 | 4 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 4 | 4 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 18 | 22 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 18 | 22 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Liability value | 22 | 26 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Current Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Current Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Assets [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 0 | 0 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 4 | 4 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Current Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 4 | 4 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 18 | 22 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Noncurrent Liabilities [Member] | Interest Rate Swaps [Member] | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | $ 18 | $ 22 |
Derivative Instruments and Hedging Activities - Gains and Losses (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Cash Flow Hedges [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | $ (14) | $ 2 |
Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | (1) |
Cash Flow Hedges [Member] | Other Comprehensive Income (Loss) [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Derivative Gain (Loss) Recognized in OCI (Effective Portion) | (24) | (8) |
Cash Flow Hedges [Member] | Interest Rate Swaps [Member] | Other Comprehensive Income (Loss) [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Derivative Gain (Loss) Recognized in OCI (Effective Portion) | 0 | 0 |
Cash Flow Hedges [Member] | Interest Rate Swaps [Member] | Interest Expense [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | (2) | (2) |
Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | (1) |
Cash Flow Hedges [Member] | Cross Currency Swaps [Member] | Other Comprehensive Income (Loss) [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Derivative Gain (Loss) Recognized in OCI (Effective Portion) | (24) | (8) |
Cash Flow Hedges [Member] | Cross Currency Swaps [Member] | Interest Expense [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 1 | |
Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | |
Cash Flow Hedges [Member] | Cross Currency Swaps [Member] | Other Income (Expense) Net [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | (12) | 3 |
Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 |
Net Investment Hedges [Member] | Foreign Currency Contracts [Member] | Other Comprehensive Income (Loss) [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Derivative Gain (Loss) Recognized in OCI (Effective Portion) | (1) | 0 |
Not Designated As Hedging Instruments [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized in income on derivative | (113) | (45) |
Not Designated As Hedging Instruments [Member] | Foreign Currency Contracts [Member] | Other Income (Expense) Net [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized in income on derivative | (112) | (43) |
Not Designated As Hedging Instruments [Member] | Interest Rate Swaps [Member] | Regulatory Assets Noncurrent [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized as regulatory liabilities/assets | 4 | 2 |
Not Designated As Hedging Instruments [Member] | Interest Rate Swaps [Member] | Interest Expense [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized in income on derivative | (1) | (2) |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Interest Rate Swaps [Member] | Regulatory Assets Noncurrent [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized as regulatory liabilities/assets | 4 | 2 |
LG And E And KU Energy LLC [Member] | Not Designated As Hedging Instruments [Member] | Interest Rate Swaps [Member] | Interest Expense [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized in income on derivative | (1) | (2) |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Interest Rate Swaps [Member] | Regulatory Assets Noncurrent [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized as regulatory liabilities/assets | 4 | 2 |
Louisville Gas And Electric Co [Member] | Not Designated As Hedging Instruments [Member] | Interest Rate Swaps [Member] | Interest Expense [Member] | ||
Amounts Included in Income, OCI or Regulatory Liabilities/Assets [Abstract] | ||
Gain (loss) recognized in income on derivative | $ (1) | $ (2) |
Derivative Instruments and Hedging Activities - Offsetting Derivative Instruments and Credit Risk-Related Features (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Credit Risk-Related Contingent Features [Abstract] | ||
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features | $ 101 | |
Aggregate fair value of collateral posted on these derivative instruments | 10 | |
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade | 91 | |
Treasury Derivatives [Member] | ||
Assets [Abstract] | ||
Gross | 176 | $ 264 |
Derivative instruments - eligible for offset | 78 | 107 |
Cash collateral received - eligible for offset | 16 | 20 |
Net | 82 | 137 |
Liabilities [Abstract] | ||
Gross | 189 | 174 |
Derivative instruments - eligible for offset | 78 | 107 |
Cash collateral pledged - eligible for offset | 5 | 0 |
Net | 106 | 67 |
LG And E And KU Energy LLC [Member] | ||
Credit Risk-Related Contingent Features [Abstract] | ||
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features | 8 | |
Aggregate fair value of collateral posted on these derivative instruments | 0 | |
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade | 8 | |
LG And E And KU Energy LLC [Member] | Treasury Derivatives [Member] | ||
Assets [Abstract] | ||
Gross | 0 | 0 |
Derivative instruments - eligible for offset | 0 | 0 |
Cash collateral received - eligible for offset | 0 | 0 |
Net | 0 | 0 |
Liabilities [Abstract] | ||
Gross | 22 | 26 |
Derivative instruments - eligible for offset | 0 | 0 |
Cash collateral pledged - eligible for offset | 0 | 0 |
Net | 22 | 26 |
Louisville Gas And Electric Co [Member] | ||
Credit Risk-Related Contingent Features [Abstract] | ||
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features | 8 | |
Aggregate fair value of collateral posted on these derivative instruments | 0 | |
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade | 8 | |
Louisville Gas And Electric Co [Member] | Treasury Derivatives [Member] | ||
Assets [Abstract] | ||
Gross | 0 | 0 |
Derivative instruments - eligible for offset | 0 | 0 |
Cash collateral received - eligible for offset | 0 | 0 |
Net | 0 | 0 |
Liabilities [Abstract] | ||
Gross | 22 | 26 |
Derivative instruments - eligible for offset | 0 | 0 |
Cash collateral pledged - eligible for offset | 0 | 0 |
Net | $ 22 | $ 26 |
Asset Retirement Obligations (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Asset Retirement Obligation [Roll Forward] | |
Balance at Beginning of Period | $ 397 |
Accretion | 3 |
Effect of foreign exchange rates | 1 |
Changes in estimated timing or cost | (10) |
Obligations settled | (9) |
Balance at End of Period | 382 |
LG And E And KU Energy LLC [Member] | |
Asset Retirement Obligation [Roll Forward] | |
Balance at Beginning of Period | 356 |
Accretion | 3 |
Effect of foreign exchange rates | 0 |
Changes in estimated timing or cost | (10) |
Obligations settled | (9) |
Balance at End of Period | 340 |
Louisville Gas And Electric Co [Member] | |
Asset Retirement Obligation [Roll Forward] | |
Balance at Beginning of Period | 121 |
Accretion | 0 |
Effect of foreign exchange rates | 0 |
Changes in estimated timing or cost | (5) |
Obligations settled | (5) |
Balance at End of Period | 111 |
Kentucky Utilities Co [Member] | |
Asset Retirement Obligation [Roll Forward] | |
Balance at Beginning of Period | 235 |
Accretion | 3 |
Effect of foreign exchange rates | 0 |
Changes in estimated timing or cost | (5) |
Obligations settled | (4) |
Balance at End of Period | $ 229 |
Accumulated Other Comprehensive Income (Loss) - After-tax Changes by Component (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of period | $ (3,422) | $ (3,778) |
Amounts arising during the period | 95 | (30) |
Reclassifications from accumulated other comprehensive income | 48 | 31 |
Net other comprehensive income during the period | 143 | 1 |
Balance at end of period | (3,279) | (3,777) |
Foreign Currency Translation Adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of period | (1,089) | (1,627) |
Amounts arising during the period | 116 | (24) |
Reclassifications from accumulated other comprehensive income | 0 | 0 |
Net other comprehensive income during the period | 116 | (24) |
Balance at end of period | (973) | (1,651) |
Qualifying Derivatives Unrealized Gains (Losses) [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of period | (13) | (7) |
Amounts arising during the period | (20) | (6) |
Reclassifications from accumulated other comprehensive income | 12 | (1) |
Net other comprehensive income during the period | (8) | (7) |
Balance at end of period | (21) | (14) |
Equity Investees Accumulated Other Comprehensive Income [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of period | 0 | (1) |
Amounts arising during the period | 0 | 0 |
Reclassifications from accumulated other comprehensive income | 0 | 0 |
Net other comprehensive income during the period | 0 | 0 |
Balance at end of period | 0 | (1) |
Defined Benefit Plans Prior Service Costs [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of period | (7) | (8) |
Amounts arising during the period | 0 | 0 |
Reclassifications from accumulated other comprehensive income | 0 | 0 |
Net other comprehensive income during the period | 0 | 0 |
Balance at end of period | (7) | (8) |
Defined Benefit Plans Actuarial Gain (Loss) [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of period | (2,313) | (2,135) |
Amounts arising during the period | (1) | 0 |
Reclassifications from accumulated other comprehensive income | 36 | 32 |
Net other comprehensive income during the period | 35 | 32 |
Balance at end of period | $ (2,278) | $ (2,103) |
Accumulated Other Comprehensive Income (Loss) - Income (Expense) Effect of Reclassifications (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Affected Line Item on the Statements of Income [Line Items] | ||
Other Income (Expense) - net | $ (43) | $ (9) |
Interest Expense | (239) | (217) |
Income Taxes | (117) | (129) |
Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | ||
Affected Line Item on the Statements of Income [Line Items] | ||
Total After-tax | (48) | (31) |
Qualifying Derivatives [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | ||
Affected Line Item on the Statements of Income [Line Items] | ||
Total Pre-tax | (14) | 1 |
Income Taxes | 2 | 0 |
Total After-tax | (12) | 1 |
Qualifying Derivatives [Member] | Interest Rate Swaps [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | ||
Affected Line Item on the Statements of Income [Line Items] | ||
Interest Expense | (2) | (3) |
Qualifying Derivatives [Member] | Cross Currency Swaps [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | ||
Affected Line Item on the Statements of Income [Line Items] | ||
Other Income (Expense) - net | (12) | 3 |
Interest Expense | 0 | 1 |
Defined Benefit Plans [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | ||
Affected Line Item on the Statements of Income [Line Items] | ||
Total Pre-tax | (45) | (41) |
Income Taxes | 9 | 9 |
Total After-tax | (36) | (32) |
Defined Benefit Plans [Member] | Net Actuarial Loss [Member] | Amounts Reclassified From Accumulated Other Comprehensive Income [Member] | ||
Affected Line Item on the Statements of Income [Line Items] | ||
Total Pre-tax | $ (45) | $ (41) |
New Accounting Guidance Pending Adoption New Accounting Guidance Pending Adoption (Details) $ in Millions |
Mar. 31, 2018
USD ($)
|
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Estimated Impact of Adoption of ASU 2018-02 | $ 50 |
LG And E And KU Energy LLC [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Estimated Impact of Adoption of ASU 2018-02 | $ 18 |
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