Until January 1, 2012, the majority of PPL's subsidiaries domestic employees were eligible for pension benefits under non-contributory defined benefit pension plans with benefits based on length of service and final average pay, as defined by the plans. Effective January 1, 2012, PPL's domestic qualified pension plans were closed to newly hired salaried employees. Newly hired bargaining unit employees will continue to be eligible under the plans based on their collective bargaining agreements. Salaried employees hired on or after January 1, 2012 are eligible to participate in the new PPL Retirement Savings Plan, a 401(k) savings plan with enhanced employer matching. PPL does not expect a significant near-term cost impact as a result of the change.

Until January 1, 2012, employees of PPL Montana were eligible for pension benefits under a cash balance pension plan. Effective January 1, 2012, that plan also was closed to newly hired salaried employees. Newly hired bargaining unit employees will continue to be eligible under the plan based on their collective bargaining agreements. Salaried employees hired on or after January 1, 2012 are eligible to participate in the new PPL Retirement Savings Plan. PPL Montana does not expect a significant near-term cost impact as a result of the change.

The defined benefit pension plans of LKE and its subsidiaries were closed to new salaried and bargaining unit employees hired after December 31, 2005. Employees hired after December 31, 2005 receive additional company contributions above the standard matching contributions to their savings plans.

Employees of certain of PPL Energy Supply's mechanical contracting companies are eligible for benefits under multiemployer plans sponsored by various unions.

Effective April 1, 2010, PPL WW's principal defined benefit pension plan was closed to most new employees, except for those meeting specific grandfathered participation rights. WPD Midlands was acquired by PPL WEM on April 1, 2011. WPD Midlands' defined benefit plan had been closed to new members, except for those meeting specific grandfathered participation rights, prior to acquisition. New employees not eligible to participate in the plan are offered benefits under a defined contribution plan.

PPL and certain of its subsidiaries also provide supplemental retirement benefits to executives and other key management employees through unfunded nonqualified retirement plans.

The majority of employees of PPL's domestic subsidiaries will become eligible for certain health care and life insurance benefits upon retirement through contributory plans. Postretirement health benefits may be paid from 401(h) accounts established as part of the PPL Retirement Plan and the LG&E and KU Retirement Plan within the PPL Services Corporation Master Trust, funded VEBA trusts and company funds. Postretirement benefits under the PPL Montana Retiree Health Plan are paid from company assets. WPD does not sponsor any postretirement benefit plans other than pensions.

The following disclosures distinguish between the domestic (U.S.) and WPD (U.K.) pension plans.

			Pension Benefits
			U.S.						U.K.						Other Postretirement Benefits
			2012		2011		2010		2012		2011		2010		2012		2011		2010
PPL
Net periodic defined benefit costs
	(credits):
Service cost			$	103	$	95	$	64	$	54	$	44	$	17	$	12	$	12	$	8
Interest cost				220		217		159		340		282		151		31		33		28
Expected return on plan assets				(259)		(245)		(184)		(458)		(338)		(202)		(23)		(23)		(20)
Amortization of:
		Transition (asset) obligation														2		2		5
		Prior service cost		24		24		21		4		4		4		1				4
		Actuarial (gain) loss		42		30		8		79		57		48		4		6		6
Net periodic defined benefit costs
	(credits) prior to settlement
	charges and termination benefits			130		121		68		19		49		18		27		30		31
Settlement charges				11
Termination benefits (a)										2		50
Net periodic defined benefit costs
	(credits)		$	141	$	121	$	68	$	21	$	99	$	18	$	27	$	30	$	31

Other Changes in Plan Assets
	and Benefit Obligations
	Recognized in OCI and
	Regulatory Assets/Liabilities -
	Gross:
Settlements			$	(11)
Net (gain) loss				372	$	117	$	142	$	1,073	$	152	$	17	$	13	$	(9)	$	20
Prior service cost
	(credit)					8										(1)		10		(71)
Amortization of:
		Transition asset														(2)		(2)		(5)
		Prior service cost		(24)		(24)		(21)		(4)		(4)		(4)		(1)				(4)
		Actuarial gain (loss)		(42)		(30)		(7)		(79)		(57)		(48)		(4)		(6)		(6)
Acquisition of regulatory assets/
	liabilities:
		Transition obligation																		4
		Prior service cost						31												6
		Actuarial (gain) loss						303												(2)
Total recognized in OCI and
	regulatory assets/liabilities (b)			295		71		448		990		91		(35)		5		(7)		(58)

Total recognized in net periodic
	defined benefit costs, OCI and
	regulatory assets/liabilities (b)		$	436	$	192	$	516	$	1,011	$	190	$	(17)	$	32	$	23	$	(27)

(b) WPD is not subject to accounting for the effects of certain types of regulation as prescribed by GAAP. As a result, WPD does not record regulatory assets/liabilities.

For PPL's U.S. pension benefits and for other postretirement benefits, the amounts recognized in OCI and regulatory assets/liabilities for the years ended December 31 were as follows:

The estimated amounts to be amortized from AOCI and regulatory assets/liabilities into net periodic defined benefit costs in 2013 are as follows:

(PPL Energy Supply)
			Pension Benefits
			U.S.						U.K. (a)				Other Postretirement Benefits
			2012		2011		2010		2012	2011	2010		2012		2011		2010
PPL Energy Supply
Net periodic defined benefit costs
(credits):
Service cost			$	6	$	5	$	4			$	17	$	1	$	1	$	1
Interest cost				7		7		7				151		1		1		1
Expected return on plan assets				(9)		(9)		(7)				(202)
Amortization of:
		Prior service cost										4
		Actuarial (gain) loss		2		2		2				48
Net periodic defined benefit costs
	(credits) prior to settlement charges			6		5		6				18		2		2		2
Net periodic defined benefit costs
	(credits)		$	6	$	5	$	6			$	18	$	2	$	2	$	2

Other Changes in Plan Assets
	and Benefit Obligations
	Recognized in OCI:
Current year net (gain) loss			$	16	$	7	$	4			$	17			$	(2)
Current year prior service credit													$	(1)
Amortization of:
		Prior service cost										(4)
		Actuarial gain (loss)		(2)		(2)		(2)				(48)
Total recognized in OCI				14		5		2				(35)		(1)		(2)

Total recognized in net periodic
	defined benefit costs and OCI		$	20	$	10	$	8			$	(17)	$	1	$		$	2

(a) In January 2011, PPL Energy Supply distributed its membership interest in PPL Global to PPL Energy Supply's parent. See Note 9 for additional information.

Actuarial loss of $3 million related to PPL Energy Supply's U.S. pension plan is expected to be amortized from AOCI into net periodic defined benefit costs in 2013.

The following table provides the components of net periodic defined benefit costs for LKE's pension and other postretirement benefit plans for the years ended December 31, 2012, and 2011, and November 1, 2010 through December 31, 2010, for the Successor and January 1, 2010 through October 31, 2010, for the Predecessor.

			Pension Benefits								Other Postretirement Benefits
			Successor						Predecessor		Successor						Predecessor
			2012		2011		2010		2010		2012		2011		2010		2010
LKE
Net periodic defined benefit costs
	(credits):
Service cost			$	22	$	24	$	4	$	17	$	4	$	4	$	1	$	3
Interest cost				64		67		11		54		9		10		1		9
Expected return on plan assets				(70)		(64)		(9)		(45)		(4)		(3)				(2)
Amortization of:
		Transition obligation										2		2				1
		Prior service cost		5		5		1		7		3		2				2
		Actuarial (gain) loss		22		24		5		16		(1)
Net periodic defined benefit costs			$	43	$	56	$	12	$	49	$	13	$	15	$	2	$	13

Other Changes in Plan Assets
	and Benefit Obligations
	Recognized in OCI and
	Regulatory Assets/Liabilities -
	Gross:
Current year net (gain) loss			$	96	$	29	$	(22)	$	96	$	(11)	$	(3)	$	(2)	$	3
Current year prior service cost						8								11
Amortization of:
		Transition obligation										(2)		(2)				(2)
		Prior service cost		(5)		(5)		(1)		(7)		(3)		(2)				(1)
		Actuarial gain (loss)		(22)		(24)		(5)		(16)		1
Total recognized in OCI and
	regulatory assets/liabilities			69		8		(28)		73		(15)		4		(2)

Total recognized in net periodic
	defined benefit costs, OCI and regulatory
	assets/liabilities		$	112	$	64	$	(16)	$	122	$	(2)	$	19	$		$	13

For LKE's pension and other postretirement benefits, the amounts recognized in OCI and regulatory assets/liabilities are as follows at December 31, 2012, 2011 and 2010 for the Successor, and at October 31, 2010 for the Predecessor.

The estimated amounts to be amortized from AOCI and regulatory assets/liabilities into net periodic defined benefit costs for LKE in 2013 are as follows.

The following table provides the components of net periodic defined benefit costs for LG&E's pension benefit plan for the years ended December 31, 2012 and 2011, and November 1, 2010 through December 31, 2010, for the Successor and January 1, 2010 through October 31, 2010, for the Predecessor.

			Pension Benefits
			Successor						Predecessor
			2012		2011		2010		2010
LG&E
Net periodic defined benefit costs (credits):
Service cost			$	2	$	2			$	1
Interest cost				14		14	$	2		12
Expected return on plan assets				(19)		(18)		(3)		(13)
Amortization of:
		Prior service cost		3		2		1		2
		Actuarial loss		11		11		2		6
Net periodic defined benefit costs			$	11	$	11	$	2	$	8

Other Changes in Plan Assets and Benefit Obligations
	Recognized in Regulatory Assets - Gross:
Current year net (gain) loss			$	18	$	15	$	(5)	$	18
Current year prior service cost						9
Amortization of:
		Prior service cost		(2)		(2)				(2)
		Actuarial (loss)		(11)		(11)		(2)		(6)
Total recognized in regulatory assets				5		11		(7)		10

Total recognized in net periodic defined benefit costs and regulatory assets			$	16	$	22	$	(5)	$	18

The estimated amounts to be amortized from regulatory assets into net periodic defined benefit costs for LG&E in 2013 are as follows.

Net periodic defined benefit costs (credits) charged to operating expense, excluding amounts charged to construction and other non-expense accounts were:

(a) As a result of PPL Energy Supply's January 2011 distribution of its membership interest in PPL Global to its parent, PPL Energy Funding, these amounts are included in "Income (Loss) from Discontinued Operations (net of income taxes)" on PPL Energy Supply's Statements of Income. See Note 9 for additional information.

(b) PPL Electric does not directly sponsor any defined benefit plans. PPL Electric was allocated these costs of defined benefit plans sponsored by PPL Services, based on its participation in those plans, which management believes are reasonable.

In the table above, for PPL Energy Supply, amounts include costs for the specific plans it sponsors and the following allocated costs of defined benefit plans sponsored by PPL Services, based on PPL Energy Supply's participation in those plans, which management believes are reasonable:

The following table provides net periodic defined benefit costs charged to operating expense for the years ended December 31, 2012, and 2011, and November 1, 2010 through December 31, 2010, for the Successor and January 1, 2010 through October 31, 2010, for the Predecessor.

(a) KU does not directly sponsor any defined benefit plans. KU was allocated these costs of defined benefit plans sponsored by LKE, based on its participation in those plans, which management believes are reasonable.

In the table above, for LG&E, amounts include costs for the specific plans it sponsors and the following allocated costs of defined benefit plans sponsored by LKE, based on its participation in those plans, which management believes are reasonable.

The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31.

The following table provides the weighted-average assumptions used in the valuation of the benefit obligations at December 31.

The following weighted-average assumptions were used to determine the net periodic defined benefit costs for the year ended December 31.

		Pension Benefits
		U.S.						U.K.						Other Postretirement Benefits
		2012		2011		2010		2012		2011		2010		2012		2011		2010
PPL
	Discount rate		5.06%		5.42%		5.96%		5.24%		5.59%		5.59%		4.80%		5.14%		5.47%
	Rate of compensation increase		4.02%		4.88%		4.79%		4.00%		3.75%		4.00%		4.00%		4.90%		4.78%
	Expected return on plan assets (a)		7.07%		7.25%		7.96%		7.17%		7.04%		7.91%		5.99%		6.57%		6.90%

PPL Energy Supply
	Discount rate		5.12%		5.47%		6.00%						5.59%		4.60%		4.95%		5.55%
	Rate of compensation increase		4.00%		4.75%		4.75%						4.00%		4.00%		4.75%		4.75%
	Expected return on plan assets (a)		7.00%		7.25%		8.00%						7.91%		N/A		N/A		N/A

The following table provides the weighted-average assumptions used to determine the net periodic defined benefit costs for the years ended December 31, 2012, and 2011, and November 1, 2010 through December 31, 2010, for the Successor and January 1, 2010 through October 31, 2010, for the Predecessor.

		Pension Benefits								Other Postretirement Benefits
		Successor						Predecessor		Successor						Predecessor
		2012		2011		2010		2010		2012		2011		2010		2010
LKE
	Discount rate		5.09%		5.49%		5.40%		6.11%		4.78%		5.12%		4.94%		5.82%
	Rate of compensation increase		4.00%		5.25%		5.25%		5.25%		4.00%		5.25%		5.25%		5.25%
	Expected return on plan assets (a)		7.25%		7.25%		7.25%		7.75%		7.02%		7.16%		7.04%		7.20%
LG&E
	Discount rate		5.00%		5.39%		5.28%		6.08%
	Rate of compensation increase		N/A		N/A		N/A		N/A
	Expected return on plan assets (a)		7.25%		7.25%		7.25%		7.75%

(a) The expected long-term rates of return for PPL's, PPL Energy Supply's, LKE's and LG&E's U.S. pension and other postretirement benefits have been developed using a best-estimate of expected returns, volatilities and correlations for each asset class. The best estimates are based on historical performance, future expectations and periodic portfolio rebalancing among the diversified asset classes. PPL management corroborates these rates with expected long-term rates of return calculated by its independent actuary, who uses a building block approach that begins with a risk-free rate of return with factors being added such as inflation, duration, credit spreads and equity risk. Each plan's specific asset allocation is also considered in developing a reasonable return assumption.

The expected long-term rates of return for PPL's U.K. pension plans have been developed by PPL management with assistance from an independent actuary using a best estimate of expected returns, volatilities and correlations for each asset class. The best estimates are based on historical performance, future expectations and periodic portfolio rebalancing among the diversified asset classes.

The following table provides the assumed health care cost trend rates for the year ended December 31:

			2012		2011		2010
PPL and PPL Energy Supply
	Health care cost trend rate assumed for next year
		- obligations		8.0%		8.5%		9.0%
		- cost		8.5%		9.0%		8.0%
	Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
		- obligations		5.5%		5.5%		5.5%
		- cost		5.5%		5.5%		5.5%
	Year that the rate reaches the ultimate trend rate
		- obligations		2019		2019		2019
		- cost		2019		2019		2016

The following table provides the assumed health care cost trend rates for the years ended December 31, 2012, 2011 and November 1, 2010 through December 31, 2010, for the Successor and January 1, 2010 through October 31, 2010, for the Predecessor.

			Successor						Predecessor
			2012		2011		2010		2010
LKE
	Health care cost trend rate assumed for next year
		- obligations		8.0%		8.5%		9.0%		7.8%
		- cost		8.5%		9.0%		9.0%		8.0%
	Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
		- obligations		5.5%		5.5%		5.5%		4.5%
		- cost		5.5%		5.5%		5.5%		4.5%
	Year that the rate reaches the ultimate trend rate
		- obligations		2019		2019		2019		2029
		- cost		2019		2019		2019		2029

A one percentage point change in the assumed health care costs trend rate assumption would have had the following effects on the other postretirement benefit plans in 2012:

The effects on PPL Energy Supply's other postretirement benefit plan would not have been significant.

			Pension Benefits
			U.S.				U.K.				Other Postretirement Benefits
			2012		2011		2012		2011		2012		2011
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	4,381	$	4,007	$	6,638	$	2,841	$	687	$	667
		Service cost		103		95		54		44		12		12
		Interest cost		220		217		340		282		31		33
		Participant contributions						15		11		6		5
		Plan amendments				8						(1)		10
		Actuarial loss		546		220		1,081		257		31		6
		Acquisition (a)								3,501
		Settlements		(25)
		Termination benefits						2		50
		Net transfer in (out)						12
		Actual expenses paid		(3)
		Gross benefits paid		(176)		(166)		(397)		(309)		(46)		(47)
		Federal subsidy										2		1
		Currency conversion						143		(39)
Benefit Obligation, end of period				5,046		4,381		7,888		6,638		722		687

Change in Plan Assets
Plan assets at fair value, beginning of period				3,471		2,819		6,351		2,524		391		360
		Actual return on plan assets		432		349		476		444		42		38
		Employer contributions		239		470		341		164		27		33
		Participant contributions						15		11		5		5
		Acquisition (a)								3,567
		Settlements		(25)
		Actual expenses paid		(2)		(1)
		Gross benefits paid		(176)		(166)		(397)		(309)		(44)		(45)
		Currency conversion						125		(50)
Plan assets at fair value, end of period				3,939		3,471		6,911		6,351		421		391

Funded Status, end of period			$	(1,107)	$	(910)	$	(977)	$	(287)	$	(301)	$	(296)

Amounts recognized in the Balance
	Sheets consist of:
		Noncurrent asset							$	130
		Current liability	$	(8)	$	(29)					$	(1)	$	(1)
		Noncurrent liability		(1,099)		(881)	$	(977)		(417)		(300)		(295)
Net amount recognized, end of period			$	(1,107)	$	(910)	$	(977)	$	(287)	$	(301)	$	(296)

Amounts recognized in AOCI and
	regulatory assets/liabilities (pre-tax)
	consist of:
Transition obligation													$	2
Prior service cost (credit)			$	91	$	115	$	1	$	3	$	(7)		(5)
Net actuarial loss				1,241		922		2,184		1,191		106		97
Total (b)			$	1,332	$	1,037	$	2,185	$	1,194	$	99	$	94

Total accumulated benefit obligation
	for defined benefit pension plans		$	4,569	$	3,949	$	7,259	$	6,144

(a) Includes the pension plans of WPD Midlands, which was acquired in 2011. See Note 10 for additional information.

(b) WPD is not subject to accounting for the effects of certain types of regulation as prescribed by GAAP. As a result, WPD does not record regulatory assets/liabilities.

For PPL's U.S. pension and other postretirement benefit plans, the amounts recognized in AOCI and regulatory assets/liabilities at December 31 were as follows:

All of PPL's U.S. pension plans had projected and accumulated benefit obligations in excess of plan assets at December 31, 2012 and 2011. All of PPL's other postretirement benefit plans had accumulated postretirement benefit obligations in excess of plan assets at December 31, 2012 and 2011.

For the U.K. pension plans of PPL WEM, projected benefit obligations of $4.3 billion were in excess of plan assets of $4.1 billion at December 31, 2012.

For the U.K. pension plans of PPL WW, projected and accumulated benefit obligations were in excess of plan assets at December 31 as follows (in billions):

(PPL Energy Supply)

The funded status of the PPL Energy Supply plans were as follows:

			Pension Benefits
			U.S.				U.K.			Other Postretirement Benefits
			2012		2011		2012	2011		2012		2011
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	143	$	121		$	2,841	$	17	$	18
		Service cost		6		5					1		1
		Interest cost		7		7					1		1
		Plan amendments									(1)
		Actuarial loss		23		13							(2)
		Distribution to parent (a)							(2,841)
		Actual expenses paid											(1)
		Gross benefits paid		(3)		(3)					(1)
Benefit Obligation, end of period				176		143					17		17

Change in Plan Assets
Plan assets at fair value, beginning of
	period			132		106			2,524
		Actual return on plan assets		16		14
		Employer contributions		4		15
		Distribution to parent (a)							(2,524)
		Gross benefits paid		(3)		(3)
Plan assets at fair value, end of period				149		132

Funded Status, end of period			$	(27)	$	(11)		$		$	(17)	$	(17)

Amounts recognized in the Balance
	Sheets consist of:
		Current liability								$	(1)	$	(1)
		Noncurrent liability	$	(27)	$	(11)					(16)		(16)
Net amount recognized, end of period			$	(27)	$	(11)				$	(17)	$	(17)

Amounts recognized in AOCI
	(pre-tax) consist of:
Prior service cost (credit)					$	1				$	(1)
Net actuarial loss			$	52		38					2	$	2
Total			$	52	$	39				$	1	$	2

Total accumulated benefit obligation
	for defined benefit pension plans		$	176	$	143

(a) As a result of PPL Energy Supply's January 2011 distribution of its membership interest in PPL Global to its parent, PPL Energy Funding, the funded status and AOCI were removed from the balance sheet in January 2011. See Note 9 for additional information.

PPL Energy Supply's pension plan had projected and accumulated benefit obligations in excess of plan assets at December 31, 2012 and 2011. PPL Energy Supply's other postretirement benefit plan had accumulated postretirement benefit obligations in excess of plan assets at December 31, 2012 and 2011.

In addition to the plans it sponsors, PPL Energy Supply and its subsidiaries are allocated a portion of the funded status and costs of the defined benefit plans sponsored by PPL Services based on their participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees are used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to PPL Energy Supply resulted in liabilities at December 31 as follows:

			Pension Benefits				Other Postretirement Benefits
			2012		2011		2012		2011
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	1,306	$	1,229	$	214	$	204
		Service cost		22		24		4		4
		Interest cost		63		67		9		10
		Plan amendments				9				10
		Actuarial loss (gain)		144		25		(8)		(3)
		Gross benefits paid		(48)		(48)		(11)		(12)
		Federal subsidy						1		1
Benefit Obligation, end of period				1,487		1,306		209		214

Change in Plan Assets
Plan assets at fair value, beginning of period				944		778		58		49
		Actual return on plan assets		117		62		8		3
		Employer contributions		57		152		13		18
		Gross benefits paid		(48)		(48)		(11)		(12)
Plan assets at fair value, end of period				1,070		944		68		58

Funded Status, end of period			$	(417)	$	(362)	$	(141)	$	(156)

Amounts recognized in the Balance
	Sheets consist of:
		Current liability	$	(3)	$	(3)
		Noncurrent liability		(414)		(359)	$	(141)	$	(156)
Net amount recognized, end of period			$	(417)	$	(362)	$	(141)	$	(156)

Amounts recognized in AOCI and
	regulatory assets/liabilities (pre-tax)
	consist of:
Transition obligation									$	2
Prior service cost			$	28	$	34	$	11		14
Net actuarial (gain) loss				355		280		(17)		(7)
Total			$	383	$	314	$	(6)	$	9

Total accumulated benefit obligation
	for defined benefit pension plans		$	1,319	$	1,141

At December 31, the amounts recognized in AOCI and regulatory assets/liabilities are as follows.

All of LKE's pension plans had projected and accumulated benefit obligations in excess of plan assets at December 31, 2012 and 2011. LKE's other postretirement benefit plan had accumulated postretirement benefit obligations in excess of plan assets at December 31, 2012 and 2011.

			Pension Benefits
			2012		2011
Change in Benefit Obligation
Benefit Obligation, beginning of period			$	298	$	274
		Service cost		1		2
		Interest cost		14		14
		Plan amendments				9
		Actuarial loss		32		14
		Gross benefits paid		(14)		(15)
Benefit Obligation, end of period				331		298

Change in Plan Assets
Plan assets at fair value, beginning of period				256		217
		Actual return on plan assets		32		16
		Employer contributions		13		38
		Gross benefits paid		(14)		(15)
Plan assets at fair value, end of period				287		256

Funded Status, end of period			$	(44)	$	(42)

Amounts recognized in the Balance Sheets consist of:
		Noncurrent liability	$	(44)	$	(42)
Net amount recognized, end of period			$	(44)	$	(42)

Amounts recognized in regulatory assets (pre-tax)
	consist of:
Prior service cost			$	17	$	20
Net actuarial loss				123		115
Total			$	140	$	135

Total accumulated benefit obligation for defined benefit pension plan			$	328	$	292

LG&E's pension plan had projected and accumulated benefit obligations in excess of plan assets at December 31, 2012 and 2011.

In addition to the plan it sponsors, LG&E is allocated a portion of the funded status and costs of certain defined benefit plans sponsored by LKE based on its participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees and retired employees are used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to LG&E resulted in liabilities at December 31 as follows.

PPL Energy Supply's mechanical contracting subsidiaries make contributions to over 70 multiemployer pension plans, based on the bargaining units from which labor is procured. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:

 Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.

 If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

 If PPL Energy Supply's mechanical contracting subsidiaries choose to stop participating in some of their multiemployer plans, they may be required to pay those plans an amount based on the unfunded status of the plan, referred to as a withdrawal liability.

PPL Energy Supply identified the Steamfitters Local Union No. 420 Pension Plan, EIN/Plan Number 23-2004424/001 as the only significant plan to which contributions are made. Contributions to this plan by PPL Energy Supply's mechanical contracting companies were $5 million for 2012, $5 million for 2011 and $4 million for 2010. At the date the financial statements were issued, the Form 5500 was not available for the plan year ending in 2012. Therefore, the following disclosures specific to this plan are being made based on the Form 5500s filed for the plan years ended December 31, 2011 and 2010. PPL Energy Supply's mechanical contracting subsidiaries were not identified individually as greater than 5% contributors on the Form 5500s. However, the combined contributions of the three subsidiaries contributing to the plan had exceeded 5%. The plan had a Pension Protection Act zone status of yellow and red, without utilizing an extended amortization period, as of December 31, 2011 and 2010. In addition, the plan is subject to a rehabilitation plan and surcharges have been applied to participating employer contributions. The expiration date of the collective-bargaining agreement related to those employees participating in this plan is April 30, 2014. There were no other plans deemed individually significant based on a multifaceted assessment of each plan. This assessment included review of the funded/zone status of each plan and PPL Energy Supply's potential obligations under the plan and the number of participating employers contributing to the plan.

PPL Energy Supply's mechanical contracting subsidiaries also participate in multiemployer other postretirement plans that provide for retiree life insurance and health benefits.

The table below details total contributions to all multiemployer pension and other postretirement plans, including the plan identified as significant above. The contribution amounts fluctuate each year based on the volume of work and type of projects undertaken from year to year.

PPL Energy Supply maintains a liability for the cost of health care of retired miners of former subsidiaries that had been engaged in coal mining, as required by the Coal Industry Retiree Health Benefit Act of 1992. At December 31, 2012, the liability was $3 million. The liability is the net of $67 million of estimated future benefit payments offset by $35 million of assets in a retired miners VEBA trust and an additional $29 million of excess assets available in a Black Lung Trust that can be used to fund the health care benefits of retired miners.

Although PPL Electric does not directly sponsor any defined benefit plans, it is allocated a portion of the funded status and costs of plans sponsored by PPL Services based on its participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees are used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to PPL Electric resulted in liabilities at December 31 as follows:

Although KU does not directly sponsor any defined benefit plans, it is allocated a portion of the funded status and costs of plans sponsored by LKE based on its participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees and retired employees of KU are used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to KU resulted in liabilities at December 31 as follows.

PPL's primary legacy pension plan and the pension plan in which employees of PPL Montana participate are invested in the PPL Services Corporation Master Trust that also includes a 401(h) account that is restricted for certain other postretirement benefit obligations. Through December 31, 2011, the plans sponsored by LKE, including LG&E's plan, were invested in Pension Trusts that also included a 401(h) account that is restricted for certain other postretirement benefit obligations. Effective January 1, 2012, the assets in the LKE Pension Trusts were transferred into the PPL Services Corporation Master Trust. The investment strategy for the master trust is to achieve a risk-adjusted return on a mix of assets that, in combination with PPL's funding policy, will ensure that sufficient assets are available to provide long-term growth and liquidity for benefit payments. The master trust benefits from a wide diversification of asset types, investment fund strategies and external investment fund managers, and therefore has no significant concentration of risk.

The investment policy of the PPL Services Corporation Master Trust outlines investment objectives and defines the responsibilities of the EBPB, external investment managers, investment advisor and trustee and custodian. The investment policy is reviewed annually by PPL's Board of Directors.

The EBPB created a risk management framework around the trust assets and pension liabilities. This framework considers the trust assets as being composed of three sub-portfolios: the growth, immunizing and liquidity portfolios. The growth portfolio is comprised of investments that generate a return at a reasonable risk, including equity securities, certain debt securities and alternative investments. The immunizing portfolio consists of debt securities and derivative positions that will typically have long durations. The immunizing portfolio is designed to offset a portion of the change in the pension liabilities due to changes in interest rates. The liquidity portfolio consists primarily of cash and cash equivalents.

Target allocation ranges have been developed for each portfolio on a plan basis based on input from external consultants with a goal of limiting funded status volatility. The EBPB monitors the investments in each portfolio on a plan basis, and seeks to obtain a target portfolio that emphasizes reduction of risk of loss from market volatility. In pursuing that goal, the EBPB establishes revised guidelines from time to time. EBPB investment guidelines on a plan basis, as well as the weighted average of such guidelines, as of the end of 2012 are presented below.

The asset allocation for the trusts and the target allocation by portfolio, at December 31, are as follows:

					2012 Target Asset Allocation (a)
		Percentage of trust assets				Weighted
			2012 (a)	2011		Average	PPL Plans	LKE Plans

Growth Portfolio			58%	57%		56%	55%	59%
	Equity securities		31%	31%
	Debt securities (b)		18%	17%
	Alternative investments		9%	9%
Immunizing Portfolio			41%	41%		42%	43%	38%
	Debt securities (b)		40%	40%
	Derivatives		1%	1%
Liquidity Portfolio			1%	2%		2%	2%	3%
Total			100%	100%		100%	100%	100%

(a) Allocations exclude consideration of cash for the WKE Bargaining Employees' Retirement Plan and a guaranteed annuity contract held by the LG&E and KU Retirement Plan.

(b) Includes commingled debt funds, which PPL treats as debt securities for asset allocation purposes.

(a) Includes commingled debt funds, which LKE treats as debt securities for asset allocation purposes.

(b) The asset allocation for this portfolio was not within the established target range due to the transition of assets at the end of 2011 in anticipation of transfer into the PPL Services Corporation Master Trust in January 2012.

PPL Montana, a subsidiary of PPL Energy Supply, has a pension plan whose assets are invested solely in the PPL Services Corporation Master Trust, which is fully disclosed below. The fair value of this plan's assets of $149 million at December 31, 2012 represents an interest of approximately 4% in the master trust.

LKE has pension plans, including LG&E's plan, whose assets, effective January 1, 2012, are invested solely in the PPL Services Corporation Master Trust, which is fully disclosed below. The fair value of these plans' assets of $1.1 billion at December 31, 2012 represents an interest of approximately 26% in the master trust.

LG&E has a pension plan whose assets, effective January 1, 2012, are invested solely in the PPL Services Corporation Master Trust, which is fully disclosed below. The fair value of this plan's assets of $287 million at December 31, 2012 represents an interest of approximately 7% in the master trust. At December 31, 2011, this plan's assets were invested solely in the LG&E and KU Energy LLC Pension Trusts, which is also fully disclosed below. The fair value of this plan's assets of $256 million at December 31, 2011 represents an interest of approximately 26% in the pension trust.

The fair value of net assets in the U.S. pension plan trusts by asset class and level within the fair value hierarchy was:

				December 31, 2012								December 31, 2011
						Fair Value Measurements Using								Fair Value Measurements Using
				Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
PPL Services Corporation Master Trust
Cash and cash equivalents				$	84	$	84					$	78	$	78
Equity securities:
		U.S.:
			Large-cap		558		206	$	352				371		247	$	124
			Small-cap		124		124						112		112
			Commingled debt		676		56		620				458				458
		International			557		184		373				299		102		197
Debt securities:
		U.S. Treasury and U.S. government sponsored
			agency		704		634		70				515		443		72
		Residential/commercial backed securities			12				11	$	1		9				9
		Corporate			874				847		27		446				439	$	7
		Other			24				23		1		10				10
		International			7				7				6				6
Alternative investments:
		Commodities			59				59
		Real estate			93				93				85				85
		Private equity			75						75		45						45
		Hedge funds			125				125				92				92
Derivatives:
		Interest rate swaps and swaptions			36				36				20				20
		Other			2				2				5				5
Insurance contracts					42						42
Receivables					55		29		26				50		31		19
Payables					(66)		(55)		(11)				(48)		(40)		(8)
Total PPL Services Corporation Master Trust assets					4,041		1,262		2,633		146		2,553		973		1,528		52
401(h) account restricted for other
	postretirement benefit obligations				(102)		(32)		(66)		(4)		(26)		(10)		(16)
Fair value - PPL Services Corporation Master
	Trust pension assets				3,939		1,230		2,567		142		2,527		963		1,512		52

(PPL, LKE and LG&E)

LG&E and KU Energy LLC Pension Trusts
Cash and cash equivalents													122		122
Equity securities:
		U.S.:
			Large-cap										220				220
			Commingled debt										65				65
		International											106		44		62
Debt securities:
		U.S. Treasury											97		97
		Corporate											342				342
Derivatives:
		Total return swaps											4				4
Insurance contracts													46						46
Total LG&E and KU Energy LLC
	Pension Trusts assets												1,002		263		693		46
401(h) account restricted for other
	postretirement benefit obligations												(58)		(13)		(45)
Fair value - LG&E and KU Energy LLC
	Pension Trusts pension assets												944		250		648		46

Fair value - total U.S. pension plans				$	3,939	$	1,230	$	2,567	$	142	$	3,471	$	1,213	$	2,160	$	98

A reconciliation of U.S. pension trust assets classified as Level 3 at December 31, 2012 is as follows:

				Residential/
				commercial
				backed		Corporate		Private		Insurance		Other
				securities		debt		equity		contracts		Debt		Total

Balance at beginning of period						$	7	$	45	$	46			$	98
	Actual return on plan assets
		Relating to assets still held
			at the reporting date				1		10		3				14
		Relating to assets sold during the period					2								2
	Purchases, sales and settlements			$	1		21		20		(7)				35
	Transfers from level 2 to level 3											$	1		1
	Transfers from level 3 to level 2						(4)								(4)
Balance at end of period				$	1	$	27	$	75	$	42	$	1	$	146

A reconciliation of U.S. pension trust assets classified as Level 3 at December 31, 2011 is as follows:

The fair value measurements of cash and cash equivalents are based on the amounts on deposit.

The market approach is used to measure fair value of equity securities. The fair value measurements of equity securities (excluding commingled funds), which are generally classified as Level 1, are based on quoted prices in active markets. These securities represent actively and passively managed investments that are managed against various equity indices.

Investments in commingled equity and debt funds are categorized as equity securities. These investments are classified as Level 2, except for exchange-traded funds, which are classified as Level 1 based on quoted prices in active markets. The fair value measurements for Level 2 investments are based on firm quotes of net asset values per share, which are not considered obtained from a quoted price in an active market. For the commingled equity funds, these securities represent investments that are measured against the Russell 1000 Growth Index, the Russell 1000 Index, the Russell 3000 Index and the MSCI EAFE Index. Commingled debt funds are described in greater detail in the following discussion of debt securities.

The fair value measurements of debt securities are generally based on evaluated prices that reflect observable market information, such as actual trade information for identical securities or for similar securities, adjusted for observable differences. Debt securities are generally measured using a market approach, including the use of matrix pricing. Common inputs include reported trades; broker/dealer bid/ask prices, benchmark securities and credit valuation adjustments. When necessary, the fair value of debt securities is measured using the income approach, which incorporates similar observable inputs as well as benchmark yields, credit valuation adjustments, reference data from market research publications, monthly payment data, collateral performance and new issue data. For the PPL Services Corporation Master Trust, these securities represent investments in securities issued by U.S. Treasury and U.S. government sponsored agencies; investments securitized by residential mortgages, auto loans, credit cards and other pooled loans; investments in investment grade and non-investment grade bonds issued by U.S. companies across several industries; investments in debt securities issued by foreign governments and corporations; and exchange traded funds as well as commingled fund investments. Investments in commingled funds include a fund that invests in a diversified portfolio of emerging market debt obligations that is measured against the JP Morgan EMBI Global Diversified Index, as well as funds that invest in investment grade long duration fixed income securities that are measured against the Barclays Long A or Better Index. During the first ten months of 2011 for the LG&E and KU Energy LLC Pension Trusts, debt securities within commingled trusts were measured against the Barclays Aggregated Bond Index and the Barclays U.S. Government/Credit Long Index. During the last two months of 2011, the debt securities for the LG&E and KU Energy LLC Pension Trusts were transitioned to debt securities similar to those within the PPL Services Corporation Master Trust. The debt securities, excluding those in commingled funds, held by the PPL Services Corporation Master Trust at December 31, 2012 have a weighted-average coupon of 3.49% and a weighted-average maturity of 21 years.

Investments in commodities represent ownership of units of a commingled fund that is invested as a long-only, unleveraged portfolio of exchange-traded futures and forward contracts in tangible commodities to obtain broad exposure to all principal groups in the global commodity markets, including energies, agriculture and metals (both precious and industrial) using proprietary commodity trading strategies. The fund has daily liquidity with a specified notification period. The fund's fair value is based upon a unit value as calculated by the fund's trustee.

Investments in real estate represent an investment in a partnership whose purpose is to manage investments in core U.S. real estate properties diversified geographically and across major property types (e.g., office, industrial, retail, etc.). The manager is focused on properties with high occupancy rates with quality tenants. This results in a focus on high income and stable cash flows with appreciation being a secondary factor. Core real estate generally has a lower degree of leverage when compared with more speculative real estate investing strategies. The partnership has limitations on the amounts that may be redeemed based on available cash to fund redemptions. Additionally, the general partner may decline to accept redemptions when necessary to avoid adverse consequences for the partnership, including legal and tax implications, among others. The fair value of the investment is based upon a partnership unit value.

Investments in private equity represent interests in partnerships in multiple early-stage venture capital funds and private equity fund of funds that use a number of diverse investment strategies. Four of the partnerships have limited lives of ten years, while the fifth has a life of 15 years, after which liquidating distributions will be received. Prior to the end of each partnership's life, the investment cannot be redeemed with the partnership; however, the interest may be sold to other parties, subject to the general partner's approval. The PPL Services Corporation Master Trust has unfunded commitments of $73 million that may be required during the lives of the partnerships. Fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed.

Investments in hedge funds represent investments in three hedge fund of funds. Hedge funds seek a return utilizing a number of diverse investment strategies. The strategies, when combined aim to reduce volatility and risk while attempting to deliver positive returns under all market conditions. Major investment strategies for the hedge fund of funds include long/short equity, market neutral, distressed debt, and relative value. Generally, shares may be redeemed on 90 days prior written notice. The funds are subject to short term lockups and have limitations on the amount that may be withdrawn based on a percentage of the total net asset value of the fund, among other restrictions. All withdrawals are subject to the general partner's approval. The fair value for two of the funds has been estimated using the net asset value per share and the third fund's fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed.

The fair value measurements of derivative instruments utilize various inputs that include quoted prices for similar contracts or market-corroborated inputs. In certain instances, these instruments may be valued using models, including standard option valuation models and standard industry models. These securities primarily represent investments in interest rate swaps and swaptions (the option to enter into an interest rate swap) which are valued based on the swap details, such as swap curves, notional amount, index and term of index, reset frequency, volatility and payer/receiver credit ratings.

Receivables/payables classified as Level 1 represent investments sold/purchased but not yet settled. Receivables/payables classified as Level 2 represent interest and dividends earned but not yet received and costs incurred but not yet paid.

Insurance contracts, classified as Level 3, represent an investment in an immediate participation guaranteed group annuity contract. The fair value is based on contract value, which represents cost plus interest income less distributions for benefit payments and administrative expenses.

PPL's and LKE's investment strategy with respect to its other postretirement benefit obligations is to fund VEBA trusts and/or 401(h) accounts with voluntary contributions and to invest in a tax efficient manner. Excluding the 401(h) accounts included in the PPL Services Corporation Master Trust in 2012 and LG&E and KU Energy LLC Pension Trusts in 2011 discussed in Plan Assets - U.S. Pension Plans above, PPL's and LKE's other postretirement benefit plans are invested in a mix of assets for long-term growth with an objective of earning returns that provide liquidity as required for benefit payments. These plans benefit from diversification of asset types, investment fund strategies and investment fund managers, and therefore, have no significant concentration of risk. Equity securities include investments in domestic large-cap commingled funds. Ownership interests in commingled funds that invest entirely in debt securities are classified as equity securities, but treated by PPL and LKE as debt securities for asset allocation and target allocation purposes. Ownership interests in commingled money market funds that invest entirely in money market securities are classified as equity securities, but treated by PPL and LKE as cash and cash equivalents for asset allocation and target allocation purposes. The asset allocation for the VEBA trusts and the target allocation, by asset class, at December 31 are detailed below.

The fair value of assets in the U.S. other postretirement benefit plans by asset class and level within the fair value hierarchy was:

			December 31, 2012								December 31, 2011
					Fair Value Measurement Using								Fair Value Measurement Using
			Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
U.S. Equity securities:
		Large-cap	$	145			$	145			$	126			$	126
		Commingled debt		119				119				121				121
		Commingled money market funds		13	$	13						20				20
		Municipalities		41				41				40				40
Receivables				1				1
Total VEBA trust assets				319		13		306				307				307
401(h) account assets (a)				102		32		66	$	4		84	$	23		61
Fair value - U.S. other postretirement
	benefit plans		$	421	$	45	$	372	$	4	$	391	$	23	$	368

(a) LKE's other postretirement benefit plan was invested primarily in a 401(h) account as disclosed in the PPL Services Corporation Master trust in 2012 and the LG&E and KU Energy LLC Pension Trusts in 2011.

Investments in large-cap equity securities represent investments in a passively managed equity index fund that invests in securities and a combination of other collective funds that together track the performance of the S&P 500 Index. Redemptions can be made daily on this fund.

Investments in commingled debt securities represent investments in a fund that invests in a diversified portfolio of investment grade long-duration fixed income securities that are managed to track the Barclays U.S. Long Credit Index, as well as a fund that is tracked to the Barclays U.S. Long Treasury Index. Redemptions can be made weekly on these funds.

Investments in commingled money market funds represent investments in a fund that invests primarily in a diversified portfolio of investment grade money market instruments, including, but not limited to, commercial paper, notes, repurchase agreements and other evidences of indebtedness with a maturity not exceeding 13 months from the date of purchase. The primary objective of the fund is a high level of current income consistent with stability of principal and liquidity. Redemptions can be made daily on this fund.

Investments in municipalities represent investments in a diverse mix of tax-exempt municipal securities.

Receivables represent interest and dividends earned but not received as well as investments sold but not yet settled.

The overall investment strategy of WPD's pension plans is developed by each plan's independent trustees in its Statement of Investment Principles in compliance with the U.K. Pensions Act of 1995 and other U.K. legislation. The trustees' primary focus is to ensure that assets are sufficient to meet members' benefits as they fall due with a longer term objective to reduce investment risk. The investment strategy is intended to maximize investment returns while not incurring excessive volatility in the funding position. WPD's plans are invested in a wide diversification of asset types, fund strategies and fund managers and therefore have no significant concentration of risk. Commingled funds that consist entirely of debt securities are traded as equity units, but treated by WPD as debt securities for asset allocation and target allocation purposes. These include investments in U.K. corporate bonds and U.K. gilts.

The asset allocation and target allocation at December 31 of WPD's pension plans are detailed below.

						Target Asset
		Percentage of plan assets				Allocation
		2012		2011		2012
Asset Class
Cash and cash equivalents					5%
Equity securities
	U.K.		6%		14%		6%
	European (excluding the U.K.)		14%		5%		4%
	Asian-Pacific				5%		3%
	North American				5%		5%
	Emerging markets		3%		2%		5%
	Currency		2%		1%		1%
	Global Tactical Asset Allocation		18%				18%
Debt securities (a)			51%		56%		52%
Alternative investments			6%		7%		6%
	Total		100%		100%		100%

The fair value of assets in the U.K. pension plans by asset class and level within the fair value hierarchy was:

			December 31, 2012							December 31, 2011
					Fair Value Measurement Using							Fair Value Measurement Using
			Total		Level 1		Level 2		Level 3	Total		Level 1		Level 2		Level 3

Cash and cash equivalents			$	14	$	14				$	313	$	313
Equity securities:
	U.K. companies			440		223	$	217			921			$	921
	European companies (excluding the U.K.)			956		720		236			313				313
	Asian-Pacific companies										312				312
	North American companies										335				335
	Emerging markets companies			231				231			116				116
	Currency			127				127			31				31
	Global Tactical Asset Allocation			1,220				1,220			25				25
	Commingled debt:
		U.K. corporate bonds		593				593			699				699
		U.K. gilts		1,664				1,664			2,109				2,109
		U.K. index-linked gilts		1,243				1,243			744				744
Alternative investments:
	Real estate			423				423			433				433
Fair value - U.K. pension plans			$	6,911	$	957	$	5,954		$	6,351	$	313	$	6,038

Except for investments in real estate, the fair value measurements of WPD's pension plan assets are based on the same inputs and measurement techniques used to measure the U.S. pension plan assets described above.

Investments in U.K. equity securities represent passively managed equity index funds that are measured against the FTSE All Share Index. Investments in European equity securities represent passively managed equity index funds that are measured against the FTSE Europe ex U.K. Index. Investments in Asian-Pacific equity securities represent passively managed equity index funds that aim to outperform 50% FTSE Asia Pacific ex-Japan Index and 50% FTSE Japan Index. Investments in North American equity securities represent passively managed index funds that are measured against the FTSE North America Index. Investments in emerging market equity securities represent passively managed equity index funds that are measured against the MSCI Emerging Markets Index. Investments in currency equity securities represent investments in unitized passive and actively traded currency funds. The Global Tactical Asset Allocation strategy attempts to benefit from short-term market inefficiencies by taking positions in worldwide markets with the objective to profit from relative movements across those markets.

Debt securities include investment grade corporate bonds of companies from diversified U.K. industries.

Investments in real estate represent holdings in a U.K. unitized fund that owns and manages U.K. industrial and commercial real estate with a strategy of earning current rental income and achieving capital growth. The fair value measurement of the fund is based upon a net asset value per share, which is based on the value of underlying properties that are independently appraised in accordance with Royal Institution of Chartered Surveyors valuation standards at least annually with quarterly valuation updates based on recent sales of similar properties, leasing levels, property operations and/or market conditions. The fund may be subject to redemption restrictions in the unlikely event of a large forced sale in order to ensure other unit holders are not disadvantaged.

PPL's U.S. defined benefit plans have the option to utilize available prior year credit balances to meet current and future contribution requirements. However, PPL contributed $394 million to its U.S. pension plans in January 2013.

PPL sponsors various non-qualified supplemental pension plans for which no assets are segregated from corporate assets. PPL expects to make approximately $7 million of benefit payments under these plans in 2013.

PPL is not required to make contributions to its other postretirement benefit plans but has historically funded these plans in amounts equal to the postretirement benefit costs recognized. Continuation of this past practice would cause PPL to contribute $24 million to its other postretirement benefit plans in 2013.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid and the following federal subsidy payments are expected to be received by the separate plan trusts.

The PPL Montana pension plan has the option to utilize available prior year credit balances to meet current and future contribution requirements. Therefore, no contributions are expected for 2013.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the separate plan trusts.

LKE's defined benefit plans have the option to utilize available prior year credit balances to meet current and future contribution requirements. However, LKE contributed $150 million to its pension plans in January 2013.

LKE sponsors various non-qualified supplemental pension plans for which no assets are segregated from corporate assets. LKE expects to make $3 million of benefit payments under these plans in 2013.

LKE is not required to make contributions to its other postretirement benefit plan but has historically funded this plan in amounts equal to the postretirement benefit costs recognized. Continuation of this past practice would cause LKE to contribute $12 million to its other postretirement benefit plan in 2013.

LG&E's defined benefit plan has the option to utilize available prior year credit balances to meet current and future contribution requirements. However, LG&E contributed $11 million to its pension plan in January 2013.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the separate plan trust.

The pension plans of WPD are subject to formal actuarial valuations every three years, which are used to determine funding requirements. Future contributions for PPL WW were evaluated in accordance with the latest valuation performed as of March 31, 2010, in respect of PPL WW's principal pension plan, to determine contribution requirements for 2013 and forward. Future contributions for PPL WEM were evaluated in accordance with the latest valuation performed as of June 30, 2011, in respect of PPL WEM's principal pension plan, to determine contribution requirements for 2013 and forward. WPD expects to make contributions of approximately $136 million in 2013. PPL WW and PPL WEM are currently permitted to recover in rates approximately 75% of their deficit funding requirements for their primary pension plans.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the separate plan trusts.

Substantially all employees of PPL's domestic subsidiaries are eligible to participate in deferred savings plans (401(k)s). Employer contributions to the plans were:

The increase for PPL in 2012 and 2011 is primarily the result of PPL's acquisition of LKE and the employer contributions related to the employees of that company and its subsidiaries under their existing plans.

Certain PPL subsidiaries sponsor a non-leveraged ESOP in which domestic employees, excluding those of PPL Montana, LKE and the mechanical contractors, are enrolled on the first day of the month following eligible employee status. Dividends paid on ESOP shares are treated as ordinary dividends by PPL. Under existing income tax laws, PPL is permitted to deduct the amount of those dividends for income tax purposes and to contribute the resulting tax savings (dividend-based contribution) to the ESOP.

The dividend-based contribution is used to buy shares of PPL's common stock and is expressly conditioned upon the deductibility of the contribution for federal income tax purposes. Contributions to the ESOP are allocated to eligible participants' accounts as of the end of each year, based 75% on shares held in existing participants' accounts and 25% on the eligible participants' compensation.

Compensation expense for ESOP contributions was $8 million in 2012, 2011 and 2010. These amounts were offset by the dividend-based contribution tax savings and had no impact on PPL's earnings.

PPL shares within the ESOP outstanding at December 31, 2012 were 7,857,222, or 1% of total common shares outstanding, and are included in all EPS calculations.

Certain PPL subsidiaries provide separation benefits to eligible employees. These benefits may be provided in the case of separations due to performance issues, loss of job related qualifications or organizational changes. Until December 1, 2012, certain employees separated were eligible for cash severance payments, outplacement services, accelerated stock award vesting, continuation of group health and welfare coverage, and enhanced pension and postretirement medical benefits. As of December 1, 2012, separation benefits for certain employees were changed to eliminate accelerated stock award vesting and enhanced pension and postretirement medical benefits. Also, the continuation of group health and welfare coverage was replaced with a single sum payment approximating the dollar amount of premium payments that would be incurred for continuation of group health and welfare coverage. Separation benefits are recorded when such amounts are probable and estimable.

See Note 10 for separation benefits recorded in 2011 in connection with a reorganization following the acquisition of WPD Midlands.

In March 2010, Health Care Reform was signed into law. Many provisions of Health Care Reform do not take effect for an extended period of time, and most will require the publication of implementing regulations and/or issuance of program guidelines.

Beginning in 2013, provisions within Health Care Reform eliminate the tax deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D Coverage. As a result, in 2010:

Other provisions within Health Care Reform that apply to PPL and its subsidiaries include:

· an excise tax, beginning in 2018, imposed on high-cost plans providing health coverage that exceeds certain thresholds;

PPL and its subsidiaries have evaluated the provisions of Health Care Reform and have included the applicable provision in the valuation of those benefit plans that are impacted. The inclusion of the various provisions of Health Care Reform did not have a material impact on the financial statements. PPL and its subsidiaries will continue to monitor the potential impact of any changes to the existing provisions and implementation guidance related to Health Care Reform on their benefit programs.