XML 49 R48.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Income Taxes (Details) (USD $)
1 Months Ended 3 Months Ended 6 Months Ended
Jul. 31, 2011
Jun. 30, 2011
Jun. 30, 2010
Jun. 30, 2011
Jun. 30, 2010
Reconciliation of Income Tax Expense          
Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35%   $ 104,000,000 $ 32,000,000 $ 323,000,000 $ 163,000,000
Federal Statutory Tax Rate (in hundredths)   35.00% 35.00% 35.00% 35.00%
Increase (decrease) due to:          
State income taxes, net of federal income tax benefit   14,000,000 1,000,000 39,000,000 15,000,000
State valuation allowance adjustments       11,000,000 [1] (8,000,000)
Impact of lower U.K. income tax rates   (11,000,000) [2] (3,000,000) (19,000,000) [2] (7,000,000)
U.S. income tax on foreign earnings - net of foreign tax credit   (9,000,000) [3] (8,000,000) (15,000,000) [3] (6,000,000)
Federal and state tax reserve adjustments   (2,000,000) 1,000,000 (3,000,000) (7,000,000) [4]
Foreign tax reserve adjustments   0 22,000,000 [5] 0 22,000,000 [5]
Domestic manufacturing deduction   0 [6] (8,000,000) 0 [6] (12,000,000)
Health Care Reform   0 0 0 8,000,000
Foreign losses resulting from restructuring   0 (25,000,000) [5] 0 (25,000,000) [5]
Federal income tax credits   (2,000,000) (2,000,000) (7,000,000) (4,000,000)
Amortization of investment tax credit   (1,000,000) (1,000,000) (4,000,000) (2,000,000)
Depreciation not normalized   (2,000,000) 0 (6,000,000) [1] 0
Nondeductible acquisition-related costs   8,000,000 [7] 0 8,000,000 [7] 0
Other   (3,000,000) (2,000,000) (8,000,000) (4,000,000)
Total increase (decrease)   (8,000,000) (25,000,000) (4,000,000) (30,000,000)
Total income taxes from continuing operations   96,000,000 7,000,000 319,000,000 133,000,000
Bonus depreciation percentage (in hundreths)       100.00%  
Deferred tax expense recorded due to state clarification on treatment of bonus depreciation       11,000,000  
U.K. statutory income tax rate in effect during period prior to a change       27.00% 28.00%
U.K. Statutory income tax rate reduction 26.00%        
Tax benefit recorded due to U.K. pension contributions   (7,000,000)   (14,000,000)  
Tax benefit from claims associated with foreign earnings         (6,000,000)
U.K. Statutory income tax rate reduction for next year 25.00%        
Low end of range of estimated deferred tax benefit due to U.K. rate change 65,000,000        
High end of range of estimated deferred tax benefit due to U.K. rate change 75,000,000        
Unrecognized Tax Benefits [Rollforward]          
Beginning of period 250,000,000 251,000,000 201,000,000 251,000,000 212,000,000
Additions based on tax positions of prior years   1,000,000 2,000,000 1,000,000 4,000,000
Reductions based on tax positions of prior years   0 0 0 (6,000,000)
Additions based on tax positions related to the current year   0 30,000,000 0 30,000,000
Reductions based on tax positions related to the current year   (1,000,000) 0 (2,000,000) (5,000,000)
Settlements   0 (5,000,000) 0 (1,000,000)
Lapse of applicable statutes of limitations   (3,000,000) (2,000,000) (5,000,000) (4,000,000)
Effects of foreign currency translation   2,000,000 (2,000,000) 5,000,000 (6,000,000)
End of period   250,000,000 224,000,000 250,000,000 224,000,000
Unrecognized Tax Benefits - Probable Increase (Decrease) Next 12 Months (Numeric)          
Total amount unrecognized tax benefits may increase in next 12 months   25,000,000   25,000,000  
Total amount unrecognized tax benefits may decrease in next 12 months   231,000,000   231,000,000  
Total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective tax rate   $ 185,000,000 $ 132,000,000 $ 185,000,000 $ 132,000,000
Regulatory Issues - Tax Litigation (Numeric)          
Depreciable life of PPL Electric's street lighting assets (in years)       7  
Depreciable life of PPL Electric's street lighting assets argued by IRS (in years)       20  
[1] In February 2011, the Pennsylvania Department of Revenue issued interpretive guidance on the treatment of bonus depreciation for Pennsylvania income tax purposes. In accordance with Corporation Tax Bulletin 2011-01, Pennsylvania allows 100% bonus depreciation for qualifying assets in the same year bonus depreciation is allowed for federal income tax purposes. Due to the reduction in projected Pennsylvania taxable income for tax years 2011 and 2012 related to the 100% bonus depreciation deduction, PPL adjusted its deferred tax valuation allowances for Pennsylvania net operating losses. As a result, during the six months ended June 30, 2011 PPL recorded $11 million of deferred income tax expense.         Additionally, the 100% Pennsylvania bonus depreciation deduction created a current state income tax benefit for the flow-through impact of Pennsylvania regulated state tax depreciation.
[2] The U.K.'s Finance Act of 2010, enacted in July 2010, included a reduction in the U.K. statutory income tax rate. Effective April 1, 2011, the statutory income tax rate was reduced from 28% to 27%.
[3] During the three and six months ended June 30, 2011, PPL recorded a $7 million and $14 million federal income tax benefit related to U.K. pension contributions.
[4] During the six months ended June 30, 2010, PPL recorded a $6 million federal income tax benefit related to claims associated with foreign earnings.
[5] During the three and six months ended June 30, 2010, PPL recorded a $25 million foreign tax benefit and a related $22 million foreign tax reserve in conjunction with losses resulting from restructuring in the U.K. These losses offset tax on a deferred gain from a prior year sale of WPD's supply business.
[6] In December 2010, Congress enacted legislation allowing for 100% bonus depreciation on qualified property. The increased tax depreciation eliminates the estimated income tax benefit related to the domestic manufacturing deduction in 2011.
[7] During the three and six months ended June 30, 2011, PPL recorded nondeductible acquisition-related costs (primarily the U.K. stamp duty tax) associated with its acquisition of WPD Midlands. See Note 8 for additional information on the acquisition.