Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

4. Revenue from Contracts with Customers

(All Registrants)

See Note 3 in PPL's 2019 Form 10-K for a discussion of the principal activities from which the Registrants and PPL’s segments generate their revenues.

The following tables reconcile "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the periods ended September 30.

	2020 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	1,885	$	586	$	806	$	363	$	452
Revenues derived from:
Alternative revenue programs (b)	(1)		(5)		4		2		2
Other (c)	(5)		—		(4)		(2)		(2)
Revenues from Contracts with Customers	$	1,879	$	581	$	806	$	363	$	452
	2019 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	1,933	$	590	$	844	$	382	$	466
Revenues derived from:
Alternative revenue programs (b)	8		2		6		4		2
Other (c)	(11)		(3)		(6)		(3)		(3)
Revenues from Contracts with Customers	$	1,930	$	589	$	844	$	383	$	465

	2020 Nine Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	5,678	$	1,748	$	2,331	$	1,092	$	1,272
Revenues derived from:
Alternative revenue programs (b)	(12)		(6)		(6)		(2)		(4)
Other (c)	(22)		(3)		(14)		(6)		(8)
Revenues from Contracts with Customers	$	5,644	$	1,739	$	2,311	$	1,084	$	1,260
	2019 Nine Months
	PPL		PPL Electric		LKE		LG&E		KU
Operating Revenues (a)	$	5,815	$	1,756	$	2,421	$	1,126	$	1,322
Revenues derived from:
Alternative revenue programs (b)	(18)		(4)		(14)		(1)		(13)
Other (c)	(30)		(8)		(16)		(7)		(9)
Revenues from Contracts with Customers	$	5,767	$	1,744	$	2,391	$	1,118	$	1,300

(a)PPL includes $485 million and $1,575 million for the three and nine months ended September 30, 2020 and $491 million and $1,615 million for the three and nine months ended September 30, 2019 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 include the transmission formula rate for PPL Electric, the ECR and DSM programs for LG&E and KU, the GLT program for LG&E, and the generation formula rate for KU. This line item shows the over/under collection of these rate mechanisms with over-collections of revenue shown as positive amounts in the table above and under-collections shown as negative amounts.

(c)Represents additional revenues outside the scope of revenues from contracts with customers, such as lease and other miscellaneous revenues.

The following tables show revenues from contracts with customers disaggregated by customer class for the periods ended September 30.

	2020 Three Months
	PPL (d)		PPL Electric (d)		LKE		LG&E		KU
Licensed energy suppliers (a)	$	440	$	—	$	—	$	—	$	—
Residential	651		303		348		173		175
Commercial	310		79		231		112		119
Industrial	156		13		143		47		96
Other (b)	130		12		66		28		38
Wholesale - municipality	7		—		7		—		7
Wholesale - other (c)	11		—		11		3		17
Transmission	174		174		—		—		—
Revenues from Contracts with Customers	$	1,879	$	581	$	806	$	363	$	452
	2019 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)	$	454	$	—	$	—	$	—	$	—
Residential	708		352		356		177		179
Commercial	346		97		249		123		126
Industrial	164		16		148		47		101
Other (b)	128		12		73		31		42
Wholesale - municipality	6		—		6		—		6
Wholesale - other (c)	12		—		12		5		11
Transmission	112		112		—		—		—
Revenues from Contracts with Customers	$	1,930	$	589	$	844	$	383	$	465

	2020 Nine Months
	PPL (d)		PPL Electric (d)		LKE		LG&E		KU
Licensed energy suppliers (a)	$	1,472	$	—	$	—	$	—	$	—
Residential	1,948		937		1,011		509		502
Commercial	896		234		662		336		326
Industrial	434		33		401		130		271
Other (b)	354		38		194		84		110
Wholesale - municipality	15		—		15		—		15
Wholesale - other (c)	28		—		28		25		36
Transmission	497		497		—		—		—
Revenues from Contracts with Customers	$	5,644	$	1,739	$	2,311	$	1,084	$	1,260
	2019 Nine Months
	PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)	$	1,520	$	—	$	—	$	—	$	—
Residential	2,058		1,060		998		504		494
Commercial	967		279		688		352		336
Industrial	470		48		422		134		288
Other (b)	360		39		209		93		116
Wholesale - municipality	38		—		38		—		38
Wholesale - other (c)	36		—		36		35		28
Transmission	318		318		—		—		—
Revenues from Contracts with Customers	$	5,767	$	1,744	$	2,391	$	1,118	$	1,300

(a)Represents customers of WPD.

(b)Primarily includes revenues from pole attachments, street lighting, other public authorities and other non-core businesses.

(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.

(d)In the fourth quarter of 2019, management deemed it appropriate to present the revenue offset associated with network integration transmission service (NITS) as distribution revenue rather than transmission revenue.

As discussed in Note 2 in PPL's 2019 Form 10-K, PPL segments its business by geographic location. Revenues from external customers for each segment/geographic location are reconciled to revenues from contracts with customers in the footnotes to the tables above. PPL Electric's revenues from contracts with customers are further disaggregated by distribution and transmission, which were $407 million and $174 million for the three months ended September 30, 2020 and $1.2 billion and $497 million for the nine months ended September 30, 2020. PPL Electric's revenue from contracts with customers disaggregated by distribution and transmission were $477 million and $112 million for the three months ended September 30, 2019 and $1.4 billion and $318 million for the nine months ended September 30, 2019.

Contract receivables from customers are primarily included in "Accounts receivable - Customer" and "Unbilled revenues" on the Balance Sheets.

The following table shows the accounts receivable and unbilled revenues balances that were impaired for the periods ended September 30.

	Three Months				Nine Months
	2020		2019		2020		2019
PPL	$	8	$	11	$	22	$	22
PPL Electric	3		8		12		14
LKE	4		2		7		5
LG&E	3		1		4		2
KU	1		1		3		3

The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers.

	PPL		PPL Electric		LKE		LG&E		KU
Contract liabilities at December 31, 2019	$	44	$	21	$	9	$	5	$	4
Contract liabilities at September 30, 2020	40		18		9		5		4
Revenue recognized during the nine months ended September 30, 2020 that was included in the contract liability balance at December 31, 2019	28		9		9		5		4
Contract liabilities at December 31, 2018	$	42	$	23	$	9	$	5	$	4
Contract liabilities at September 30, 2019	42		19		9		5		4
Revenue recognized during the nine months ended September 30, 2019 that was included in the contract liability balance at December 31, 2018	31		11		9		5		4

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 services are delivered in subsequent periods.

At September 30, 2020, PPL had $40 million of performance obligations attributable to Corporate and Other that have not been satisfied. Of this amount, PPL expects to recognize approximately $40 million within the next 12 months.