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Income and Other Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of Income (Loss) From Continuing Operations Before Income Taxes

"Income from Continuing Operations Before Income Taxes" included the following.

		2013		2012		2011

Domestic income		$	196	$	994	$	1,715
Foreign income			1,113		1,088		486
	Total	$	1,309	$	2,082	$	2,201

Components of Deferred Tax Assets and Liabilities

Significant components of PPL's deferred income tax assets and liabilities were as follows:

			2013		2012
Deferred Tax Assets
	Deferred investment tax credits		$	137	$	130
	Regulatory obligations			144		124
	Accrued pension costs			140		276
	Federal loss carryforwards			331		524
	State loss carryforwards			304		305
	Federal and state tax credit carryforwards			332		287
	Foreign capital loss carryforwards			467		525
	Foreign loss carryforwards			6		6
	Foreign - pensions			202		254
	Foreign - regulatory obligations			26		27
	Foreign - other			12		16
	Contributions in aid of construction			137		134
	Domestic - other			211		239
	Valuation allowances			(663)		(706)
		Total deferred tax assets		1,786		2,141

Deferred Tax Liabilities
	Domestic plant - net			4,073		3,967
	Taxes recoverable through future rates			151		141
	Unrealized gain on qualifying derivatives			37		122
	Other regulatory assets			244		319
	Reacquired debt costs			34		40
	Foreign plant - net			859		937
	Domestic - other			78		66
		Total deferred tax liabilities		5,476		5,592
Net deferred tax liability			$	3,690	$	3,451

Summary of Operating Loss Carryforwards and Tax Credit Carryforwards

At December 31, PPL had the following loss and tax credit carryforwards.

		2013		Expiration

Loss carryforwards
	Federal net operating losses (a)	$	952	2028-2032
	State net operating losses (a) (b)		5,011	2014-2033
	State capital losses (c)		125	2014-2016
	Foreign net operating losses (d)		30	Indefinite
	Foreign capital losses (e)		2,333	Indefinite

Credit carryforwards
	Federal investment tax credit		245	2025-2033
	Federal alternative minimum tax credit		32	Indefinite
	Federal foreign tax credit		17	2017-2023
	Federal - other		35	2016-2033
	State - other		5	2022

(a) Includes an insignificant amount of federal and state net operating loss carryforwards from excess tax deductions related to stock compensation for which a tax benefit will be recorded in Equity when realized.

(b) A valuation allowance of $185 million has been recorded against the deferred tax assets for these losses.

(d) A valuation allowance of $6 million has been recorded against the deferred tax assets for these losses.

(e) A valuation allowance of $467 million has been recorded against the deferred tax assets for these losses.

Schedule of Valuation and Qualifying Accounts of Deferred Tax Assets

The changes in deferred tax valuation allowances were as follows:

			Additions
	Balance at				Charged to						Balance
	Beginning		Charged		Other						at End
	of Period		to Income		Accounts			Deductions			of Period

2013	$	706	$	29				$	72	(a)	$	663
2012		724		18	$	10			46	(a)		706
2011		464		190		112	(b)		42	(a)		724

(a) The reductions of the U.K. statutory income tax rate in 2013, 2012 and 2011 resulted in $67 million, $46 million and $35 million in reductions in deferred tax assets and the corresponding valuation allowances. See "Reconciliation of Income Tax Expense" below for more information on the impact of the U.K. Finance Acts of 2013, 2012 and 2011.

(b) Primarily related to a $101 million valuation allowance that was recorded against certain deferred tax assets as a result of the 2011 acquisition of WPD Midlands. See Note 10 for additional information on the acquisition.

Components of Income Tax Expense (Benefit) From Continuing Operations

Details of the components of income tax expense, a reconciliation of federal income taxes derived from statutory tax rates applied to "Income from Continuing Operations Before Income Taxes" to income taxes for reporting purposes, and details of "Taxes, other than income" were as follows:

				2013		2012		2011
Income Tax Expense (Benefit)
	Current - Federal			$	(75)			$	54
	Current - State				1	$	(2)		(20)
	Current - Foreign				181		121		73
			Total Current Expense (Benefit)		107		119		107
	Deferred - Federal				73		553		558
	Deferred - State				45		103		127
	Deferred - Foreign				(53)		35		(23)
			Total Deferred Expense (Benefit), excluding operating loss carryforwards		65		691		662

	Investment tax credit, net - Federal				(10)		(10)		(10)
	Tax expense (benefit) of operating loss carryforwards
		Deferred - Federal (a)			36		(195)		(30)
		Deferred - State			(18)		(60)		(38)
			Total Tax Expense (Benefit) of Operating Loss Carryforwards		18		(255)		(68)
	Total income taxes from continuing operations			$	180	$	545	$	691

	Total income tax expense - Federal			$	24	$	348	$	572
	Total income tax expense (benefit) - State				28		41		69
	Total income tax expense - Foreign				128		156		50
			Total income taxes from continuing operations	$	180	$	545	$	691

In the table above, the following income tax expense (benefits) are excluded from income taxes from continuing operations.

(a) A 2012 Federal income tax return adjustment was recorded in 2013 related to a reduction in the 2012 NOL recorded in the filed return. The reduction was primarily due to PPL's decision, at the time of filing, to utilize regular modified accelerated cost recovery system (MACRS) depreciation rates for certain non-regulated assets otherwise eligible for bonus tax depreciation.

			2013		2012		2011

Discontinued operations			$	1	$	(4)	$	2
Stock-based compensation recorded to Additional Paid-in Capital				(2)		(1)		3
Issuance costs of Purchase Contracts recorded to Additional Paid-in Capital								(9)
Valuation allowance on state deferred taxes related to issuance costs of Purchase Contracts
	recorded to Additional Paid-in Capital			(2)				4
Other comprehensive income				159		(526)		(144)
Valuation allowance on state deferred taxes recorded to other comprehensive income				(7)				7
		Total	$	149	$	(531)	$	(137)

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

				2013		2012		2011
Reconciliation of Income Tax Expense
	Federal income tax on Income from Continuing Operations Before Income Taxes at
		statutory tax rate - 35%		$	458	$	729	$	770
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit				(7)		27		63
	State valuation allowance adjustments (a)				24		13		36
	Impact of lower U.K. income tax rates (b)				(129)		(110)		(33)
	U.S. income tax on foreign earnings - net of foreign tax credit (c)				9		26		(26)
	Federal and state tax reserves adjustments (d)				(43)		(1)		39
	Foreign tax reserves adjustments (e)				(2)		(5)		(141)
	Federal and state income tax return adjustments (a) (f)				(5)		16		(17)
	Foreign income tax return adjustments				(4)		(6)
	Impact of the U.K. Finance Acts on deferred tax balances (b)				(97)		(75)		(69)
	Federal income tax credits (g)				(9)		(12)		(13)
	Depreciation not normalized (a)				(8)		(11)		(20)
	Foreign valuation allowance adjustments (e)								147
	State deferred tax rate change (h)				15		(19)		(26)
	Net operating loss carryforward adjustments (i)						(9)
	Intercompany interest on U.K. financing entities (j)				(10)		(9)		(8)
	Other				(12)		(9)		(11)
			Total increase (decrease)		(278)		(184)		(79)
Total income taxes from continuing operations				$	180	$	545	$	691
Effective income tax rate					13.8%		26.2%		31.4%

(a) During 2013, PPL recorded $23 million of state deferred income tax expense related to a deferred tax valuation allowance primarily due to a decrease in projected future taxable income at PPL Energy Supply over the remaining carryforward period of Pennsylvania net operating losses.

During 2011, the Pennsylvania Department of Revenue issued interpretive guidance on the treatment of bonus depreciation for Pennsylvania income tax purposes. The guidance allows 100% bonus depreciation for qualifying assets in the same year bonus depreciation is allowed for Federal income tax purposes. Due to the decrease in projected taxable income related to bonus depreciation and a decrease in projected future taxable income, PPL recorded $43 million in state deferred income tax expense related to deferred tax valuation allowances during 2011.

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. The federal provision for 100% bonus depreciation generally applies to property placed into service before January 1, 2012. The placed in-service deadline was extended to January 1, 2013 for property that had a cost in excess of $1 million, had a production period longer than one year and had a tax life of at least ten years. PPL's tax deduction for 100% bonus regulated tax depreciation was zero in 2013 and was significantly lower in 2012 than in 2011.

(b) The U.K. Finance Act 2013, enacted in July 2013, reduced the U.K. statutory income tax rate from 23% to 21% effective April 1, 2014 and from 21% to 20% effective April 1, 2015. As a result, PPL reduced its net deferred tax liabilities and recognized a deferred tax benefit during 2013 related to both rate decreases.

The U.K. Finance Act 2012, enacted in July 2012, reduced the U.K. statutory income tax rate from 25% to 24% retroactive to April 1, 2012 and from 24% to 23% effective April 1, 2013. As a result, PPL reduced its net deferred tax liabilities and recognized a deferred tax benefit during 2012 related to both rate decreases.

The U.K. Finance Act 2011, enacted in July 2011, reduced the U.K. statutory income tax rate from 27% to 26% retroactive to April 1, 2011 and from 26% to 25% effective April 1, 2012. As a result, PPL reduced its net deferred tax liabilities and recognized a deferred tax benefit during 2011 related to both rate decreases.

(c) During 2013, PPL recorded $25 million of income tax expense resulting from increased taxable dividends offset by a $19 million income tax benefit associated with a ruling obtained from the IRS impacting the recalculation of 2010 U.K. earnings and profits that was reflected on an amended 2010 U.S. tax return.

During 2012, PPL recorded a $23 million adjustment to federal income tax expense related to the recalculation of 2010 U.K. earnings and profits.

During 2011, PPL recorded a $28 million federal income tax benefit related to U.K. pension contributions.

(d) In 1997, the U.K. imposed a Windfall Profits Tax (WPT) on privatized utilities, including WPD. PPL filed its federal income tax returns for years subsequent to its 1997 and 1998 claims for refund on the basis that the U.K. WPT was creditable. In September 2010, the U.S. Tax Court (Tax Court) ruled in PPL's favor in a dispute with the IRS, concluding that the U.K. WPT is a creditable tax for U.S. tax purposes. As a result, and with the finalization of other issues, PPL recorded a $42 million tax benefit in 2010. In January 2011, the IRS appealed the Tax Court's decision to the U.S. Court of Appeals for the Third Circuit (Third Circuit). In December 2011, the Third Circuit issued its opinion reversing the Tax Court's decision, holding that the U.K. WPT is not a creditable tax. As a result of the Third Circuit's adverse determination, PPL recorded a $39 million expense in 2011. In June 2012, the U.S. Court of Appeals for the Fifth Circuit issued a contrary opinion in an identical case involving another company. In July 2012, PPL filed a petition for a writ of certiorari seeking U.S. Supreme Court review of the Third Circuit's opinion. The Supreme Court granted PPL's petition and oral argument was held in February 2013. On May 20, 2013, the Supreme Court reversed the Third Circuit's opinion and ruled that the WPT is a creditable tax. As a result of the Supreme Court ruling, PPL recorded a tax benefit of $44 million during 2013, of which $19 million relates to interest.

PPL recorded a tax benefit of $7 million during 2013 and $6 million during 2012 and 2011 to federal and state income tax reserves related to stranded cost securitization. The reserve balance at December 31, 2013 related to stranded costs securitization is zero.

(e) During 2012, PPL recorded a foreign tax benefit following resolution of a U.K. tax issue related to interest expense.

During 2011, WPD reached an agreement with HMRC related to the amount of the capital losses that resulted from prior years' restructuring in the U.K. and recorded a $147 million foreign tax benefit for the reversal of tax reserves related to the capital losses. Additionally, WPD recorded a $147 million valuation allowance for the amount of capital losses that, more likely than not, will not be utilized.

(f) During 2012, PPL recorded $16 million in federal and state income tax expense related to the filing of the 2011 federal and state income tax returns. Of this amount, $5 million relates to the reversal of prior years' state income tax benefits related to regulated depreciation. PPL changed its method of accounting for repair expenditures for tax purposes effective for its 2008 tax year. In August 2011, the IRS issued guidance regarding the use and evaluation of statistical samples and sampling estimates for network assets. The IRS guidance provided a safe harbor method of determining whether the repair expenditures for electric transmission and distribution property can be currently deducted for tax purposes. PPL adopted the safe harbor method with the filing of its 2011 federal income tax return.

During 2011, PPL recorded $17 million in federal and state tax benefits related to the filing of the 2010 federal and state income tax returns. Of this amount, $7 million in tax benefits related to an additional domestic manufacturing deduction resulting from revised bonus depreciation amounts and $3 million in tax benefits related to the flow-through impact of Pennsylvania regulated state tax depreciation.

(g) During 2013, 2012 and 2011, PPL recorded a deferred tax benefit related to investment tax credits on progress expenditures related to hydroelectric plant expansions. See Note 8 for additional information.

(h) During 2013, 2012 and 2011, PPL recorded adjustments related to its December 31 state deferred tax liabilities as a result of annual changes in state apportionment and the impact on the future estimated state income tax rate.

(i) During 2012, PPL recorded adjustments to deferred taxes related to net operating loss carryforwards of LKE based on income tax return adjustments.

(j) During 2013, 2012 and 2011, PPL recorded income tax benefits related to interest expense on intercompany loans.

Details of Taxes Other Than Income

		2013		2012		2011
Taxes, other than income
	State gross receipts	$	135	$	135	$	140
	State utility realty		2		2		(9)
	State capital stock		2		7		18
	Foreign property		147		147		113
	Domestic property and other		78		75		64
	Total	$	364	$	366	$	326

Unrecognized Tax Benefits

Changes to unrecognized tax benefits were as follows:

		2013		2012
PPL
	Beginning of period	$	92	$	145
	Additions based on tax positions of prior years		3		15
	Reductions based on tax positions of prior years		(32)		(61)
	Additions based on tax positions related to the current year				7
	Reductions based on tax positions related to the current year				(3)
	Settlements		(30)		(2)
	Lapse of applicable statute of limitation		(11)		(9)
	End of period	$	22	$	92

PPL Energy Supply
	Beginning of period	$	30	$	28
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years		(15)		(2)
	End of period	$	15	$	30

PPL Electric
	Beginning of period	$	26	$	73
	Reductions based on tax positions of prior years		(17)		(43)
	Additions based on tax positions related to the current year				5
	Lapse of applicable statute of limitation		(9)		(9)
	End of period	$		$	26

At December 31, 2013, it was reasonably possible that during the next 12 months the total amount of unrecognized tax benefits could increase or decrease by the following amounts.

At December 31, the total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective tax rate were as follows.

At December 31, the following receivable (payable) balances were recorded for interest related to tax positions.

The following interest expense (benefit) was recognized in income taxes.

	2013		2012		2011

PPL	$	(30)	$	(4)	$	27
PPL Energy Supply		5		(4)		6
PPL Electric		(7)		(4)		(5)

Summary of Income Tax Examinations

With few exceptions, at December 31, 2013, these jurisdictions, as well as the tax years that are no longer subject to examination, were as follows:

PPL

Energy Supply

PPL Electric

LKE

LG&E

U.S. (federal) (a)

1997 and prior

10/31/2010 and prior

Pennsylvania (state)

2009 and prior

2008 and prior

Kentucky (state)

2008 and prior

2010 and prior

Montana (state)

2009 and prior

U.K. (foreign)

2011 and prior

(a) For LKE, LG&E, and KU, the ten month period ending October 31, 2010 remains open under the standard three year statute of limitations; however, the IRS has completed its audit of these periods under the Compliance Assurance Process, effectively closing them to audit adjustments. No issues remain outstanding.

PPL Energy Supply LLC [Member]

Income and Other Taxes [Line Items]

Components of Deferred Tax Assets and Liabilities

Significant components of PPL Energy Supply's deferred income tax assets and liabilities were as follows:

			2013		2012
Deferred Tax Assets
	Deferred investment tax credits		$	84	$	75
	Accrued pension costs			39		94
	Federal loss carryforwards			28		51
	Federal tax credit carryforwards			131		113
	State loss carryforwards			80		79
	Other			69		68
	Valuation allowances			(78)		(74)
		Total deferred tax assets		353		406

Deferred Tax Liabilities
	Plant - net			1,392		1,579
	Unrealized gain on qualifying derivatives			38		173
	Other			46		44
		Total deferred tax liabilities		1,476		1,796
Net deferred tax liability			$	1,123	$	1,390

Summary of Operating Loss Carryforwards and Tax Credit Carryforwards

At December 31, PPL Energy Supply had the following loss and tax credit carryforwards.

		2013		Expiration
Loss carryforwards
	Federal net operating losses	$	80	2031-2032
	State net operating losses (a)		1,204	2014-2033

Credit carryforwards
	Federal investment tax credit		120	2031-2033
	Federal - other		9	2031-2033

(a) A valuation allowance of $78 million has been recorded against the deferred tax assets for these losses.

Schedule of Valuation and Qualifying Accounts of Deferred Tax Assets

The changes in deferred tax valuation allowances were:

			Additions
	Balance at				Charged to				Balance
	Beginning		Charged		Other				at End
	of Period		to Income		Accounts	Deductions			of Period

2013	$	74	$	4					$	78
2012		72		2						74
2011		408		22		$	358	(a)		72

(a) During 2011, PPL Energy Supply distributed its membership interest in PPL Global to PPL Energy Funding. See Note 9 for additional information.

Components of Income Tax Expense (Benefit) From Continuing Operations

Details of the components of income tax expense, a reconciliation of federal income taxes derived from statutory tax rates applied to "Income (Loss) from Continuing Operations Before Income Taxes" to income taxes for reporting purposes, and details of "Taxes, other than income" were as follows:

				2013		2012		2011
Income Tax Expense (Benefit)
	Current - Federal			$	134	$	89	$	139
	Current - State				21		22		(12)
			Total Current Expense (Benefit)		155		111		127
	Deferred - Federal				(287)		193		251
	Deferred - State				(27)		10		70
			Total Deferred Expense (Benefit), excluding operating loss carryforwards		(314)		203		321

	Investment tax credit, net - federal				(5)		(2)		(3)
	Tax expense (benefit) of operating loss carryforwards
		Deferred - Federal (a)			22		(48)
		Deferred - State					(1)
			Total Tax Expense (Benefit) of Operating Loss Carryforwards		22		(49)
	Total income taxes from continuing operations (b)			$	(142)	$	263	$	445

	Total income tax expense - Federal			$	(136)	$	232	$	387
	Total income tax expense (benefit) - State				(6)		31		58
			Total income taxes from continuing operations (b)	$	(142)	$	263	$	445

(a) A 2012 federal income tax return adjustment was recorded in 2013 related to a reduction in the 2012 NOL recorded in the filed return. The reduction was primarily due to PPL's decision, at the time of filing, to utilize regular MACRS depreciation rates for certain non-regulated assets otherwise eligible for bonus tax depreciation.

(b) Excludes current and deferred federal, state and foreign tax expense (benefit) recorded to Discontinued Operations of $3 million in 2011. Also, excludes federal, state and foreign tax expense (benefit) recorded to OCI of $47 million in 2013, $(267) million in 2012 and $(83) million in 2011. The deferred tax benefit of operating loss carryforwards was insignificant for 2011.

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

				2013		2012		2011
Reconciliation of Income Tax Expense
	Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at
		statutory tax rate - 35%		$	(130)	$	258	$	424
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit				(22)		33		60
	State valuation allowance adjustments (a)				4		2		22
	State deferred tax rate change (b)				15		(19)		(26)
	Federal and state tax reserves adjustments (c)				6		(2)		2
	Federal and state income tax return adjustments (d)				(1)		4		(22)
	Federal income tax credits (e)				(8)		(12)		(12)
	Other				(6)		(1)		(3)
			Total increase (decrease)		(12)		5		21
Total income taxes from continuing operations				$	(142)	$	263	$	445
Effective income tax rate					38.3%		35.6%		36.7%

(a) During 2011, the Pennsylvania Department of Revenue issued interpretive guidance on the treatment of bonus depreciation for Pennsylvania income tax purposes. The guidance allows 100% bonus depreciation for qualifying assets in the same year bonus depreciation is allowed for Federal income tax purposes. Due to the decrease in projected taxable income related to bonus depreciation and a decrease in projected future taxable income, PPL Energy Supply recorded state deferred income tax expense related to deferred tax valuation allowances during 2011.

(b) During 2013, 2012 and 2011, PPL Energy Supply recorded adjustments related to its December 31 state deferred tax liabilities as a result of annual changes in state apportionment and the impact on the future estimated state income tax rate. .

(c) During 2013, PPL Energy Supply reversed $3 million in tax benefits related to a 2008 change in method of accounting for certain expenditures for tax purposes and recorded $4 million in federal tax expense related to differences in over (under) payment interest rates applied to audit claims as a result of the U.S. Supreme Court decision related to Windfall Profits Tax.

(d) During 2011, PPL Energy Supply recorded federal and state tax benefits related to the filing of the 2010 federal and state income tax returns. Of this amount, $7 million in tax benefits related to an additional domestic manufacturing deduction resulting from revised bonus depreciation amounts.

(e) During 2013, 2012 and 2011, PPL Energy Supply recorded a deferred tax benefit related to investment tax credits on progress expenditures related to hydroelectric plant expansions. See Note 8 for additional information.

Details of Taxes Other Than Income

			2013		2012		2011
Taxes, other than income
	State gross receipts		$	37	$	35	$	31
	State capital stock			1		5		12
	Property and other			28		29		28
		Total	$	66	$	69	$	71

Unrecognized Tax Benefits

Changes to unrecognized tax benefits were as follows:

		2013		2012
PPL
	Beginning of period	$	92	$	145
	Additions based on tax positions of prior years		3		15
	Reductions based on tax positions of prior years		(32)		(61)
	Additions based on tax positions related to the current year				7
	Reductions based on tax positions related to the current year				(3)
	Settlements		(30)		(2)
	Lapse of applicable statute of limitation		(11)		(9)
	End of period	$	22	$	92

PPL Energy Supply
	Beginning of period	$	30	$	28
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years		(15)		(2)
	End of period	$	15	$	30

PPL Electric
	Beginning of period	$	26	$	73
	Reductions based on tax positions of prior years		(17)		(43)
	Additions based on tax positions related to the current year				5
	Lapse of applicable statute of limitation		(9)		(9)
	End of period	$		$	26

At December 31, 2013, it was reasonably possible that during the next 12 months the total amount of unrecognized tax benefits could increase or decrease by the following amounts.

At December 31, the total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective tax rate were as follows.

At December 31, the following receivable (payable) balances were recorded for interest related to tax positions.

The following interest expense (benefit) was recognized in income taxes.

	2013		2012		2011

PPL	$	(30)	$	(4)	$	27
PPL Energy Supply		5		(4)		6
PPL Electric		(7)		(4)		(5)

PPL Electric Utilities Corp [Member]

Income and Other Taxes [Line Items]

Components of Deferred Tax Assets and Liabilities

Significant components of PPL Electric's deferred income tax assets and liabilities were as follows.

			2013		2012
Deferred Tax Assets
	Accrued pension costs		$	42	$	81
	Contributions in aid of construction			109		106
	Regulatory obligations			38		24
	State loss carryforwards			35		39
	Federal loss carryforwards			72		81
	Other			45		46
		Total deferred tax assets		341		377

Deferred Tax Liabilities
	Electric utility plant - net			1,366		1,229
	Taxes recoverable through future rates			129		122
	Reacquired debt costs			23		27
	Other regulatory assets			129		174
	Other			8		12
		Total deferred tax liabilities		1,655		1,564
Net deferred tax liability			$	1,314	$	1,187

Summary of Operating Loss Carryforwards and Tax Credit Carryforwards

At December 31, PPL Electric had the following loss carryforwards.

		2013		Expiration

Loss carryforwards
	Federal net operating losses	$	206	2031-2032
	State net operating losses		534	2030-2032

Components of Income Tax Expense (Benefit) From Continuing Operations

Details of the components of income tax expense, a reconciliation of federal income taxes derived from statutory tax rates applied to "Income Before Income Taxes" to income taxes for reporting purposes, and details of "Taxes, other than income" were as follows:

				2013		2012		2011
Income Tax Expense (Benefit)
	Current - Federal			$	(15)	$	(28)	$	(25)
	Current - State				(4)		(18)		(13)
			Total Current Expense (Benefit)		(19)		(46)		(38)
	Deferred - Federal				109		162		123
	Deferred - State				16		42		25
			Total Deferred Expense (Benefit), excluding operating loss carryforwards		125		204		148

	Investment tax credit, net - Federal				(1)		(1)		(2)
	Tax expense (benefit) of operating loss carryforwards
		Deferred - Federal			4		(72)		(12)
		Deferred - State			(1)		(17)		(28)
			Total Tax Expense (Benefit) of Operating Loss Carryforwards		3		(89)		(40)
	Total income tax expense			$	108	$	68	$	68

	Total income tax expense - Federal			$	97	$	61	$	84
	Total income tax expense (benefit) - State				11		7		(16)
			Total income tax expense	$	108	$	68	$	68

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

			2013		2012		2011
Reconciliation of Income Taxes
	Federal income tax on Income Before Income Taxes at statutory tax rate - 35%		$	111	$	71	$	90
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit			16		9		12
	Amortization of investment tax credit			(1)		(1)		(2)
	Federal and state tax reserves adjustments (a)			(9)		(8)		(9)
	Federal and state income tax return adjustments (b)			(1)		7		(4)
	Depreciation not normalized (c)			(6)		(8)		(17)
	Other			(2)		(2)		(2)
		Total increase (decrease)		(3)		(3)		(22)
Total income tax expense			$	108	$	68	$	68
Effective income tax rate				34.1%		33.3%		26.5%

(a) PPL Electric recorded a tax benefit of $7 million during 2013 and $6 million during 2012 and 2011 to federal and state income tax reserves related to stranded cost securitization. The reserve balance at December 31, 2013 related to stranded costs securitization is zero.

(b) PPL Electric changed its method of accounting for repair expenditures for tax purposes effective for its 2008 tax year. In August 2011, the IRS issued guidance regarding the use and evaluation of statistical samples and sampling estimates for network assets. The IRS guidance provided a safe harbor method of determining whether the repair expenditures for electric transmission and distribution property can be currently deducted for tax purposes. PPL Electric adopted the safe harbor method with the filing of its 2011 federal income tax return and recorded a $5 million adjustment to federal and state income tax expense resulting from the reversal of prior years' state income tax benefits related to regulated depreciation.

During 2011, PPL Electric recorded a $5 million federal and state income tax benefit as a result of filing its 2010 federal and state income tax returns. Of this amount, $3 million in tax benefits related to the flow-through impact of Pennsylvania regulated 100% bonus tax depreciation.

(c) During 2011, the Pennsylvania Department of Revenue issued interpretive guidance on the treatment of bonus depreciation for Pennsylvania income tax purposes. The guidance allows 100% bonus depreciation for qualifying assets in the same year bonus depreciation is allowed for Federal income tax purposes. The 100% Pennsylvania bonus depreciation deduction created a current state income tax benefit for the flow-through impact of Pennsylvania regulated state tax depreciation. The federal provision for 100% bonus depreciation generally applies to property placed into service before January 1, 2012. The placed in service deadline was extended to January 1, 2013 for property that had a cost in excess of $1 million, had a production period longer that one year and had a tax life of at least ten years. PPL Electric's tax deduction for 100% bonus depreciation was zero in 2013 and was significantly lower in 2012 than in 2011.

Details of Taxes Other Than Income

			2013		2012		2011
Taxes, other than income
	State gross receipts		$	98	$	101	$	109
	State utility realty (a)			2		2		(10)
	State capital stock			1		1		4
	Property and other			2		1		1
		Total	$	103	$	105	$	104

(a) 2011 includes PURTA tax that was refunded to PPL Electric customers in 2011.

Unrecognized Tax Benefits

Changes to unrecognized tax benefits were as follows:

		2013		2012
PPL
	Beginning of period	$	92	$	145
	Additions based on tax positions of prior years		3		15
	Reductions based on tax positions of prior years		(32)		(61)
	Additions based on tax positions related to the current year				7
	Reductions based on tax positions related to the current year				(3)
	Settlements		(30)		(2)
	Lapse of applicable statute of limitation		(11)		(9)
	End of period	$	22	$	92

PPL Energy Supply
	Beginning of period	$	30	$	28
	Additions based on tax positions of prior years				4
	Reductions based on tax positions of prior years		(15)		(2)
	End of period	$	15	$	30

PPL Electric
	Beginning of period	$	26	$	73
	Reductions based on tax positions of prior years		(17)		(43)
	Additions based on tax positions related to the current year				5
	Lapse of applicable statute of limitation		(9)		(9)
	End of period	$		$	26

At December 31, 2013, it was reasonably possible that during the next 12 months the total amount of unrecognized tax benefits could increase or decrease by the following amounts.

At December 31, the total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective tax rate were as follows.

At December 31, the following receivable (payable) balances were recorded for interest related to tax positions.

The following interest expense (benefit) was recognized in income taxes.

	2013		2012		2011

PPL	$	(30)	$	(4)	$	27
PPL Energy Supply		5		(4)		6
PPL Electric		(7)		(4)		(5)

LG And E And KU Energy LLC [Member]

Income and Other Taxes [Line Items]

Components of Deferred Tax Assets and Liabilities

Significant components of LKE's deferred income tax assets and liabilities were as follows:

			2013		2012
Deferred Tax Assets
	Net operating loss carryforward		$	222	$	376
	Tax credit carryforwards			179		170
	Regulatory liabilities			107		99
	Accrued pension costs			26		42
	Capital loss carryforward			4		5
	Income taxes due to customers			23		26
	Deferred investment tax credits			52		54
	Other			57		41
	Valuation allowances			(4)		(5)
		Total deferred tax assets		666		808

Deferred Tax Liabilities
	Plant - net			1,327		1,171
	Regulatory assets			133		152
	Other			12		13
		Total deferred tax liabilities		1,472		1,336
Net deferred tax liability			$	806	$	528

Summary of Operating Loss Carryforwards and Tax Credit Carryforwards

At December 31, LKE had the following loss and tax credit carryforwards.

		2013		Expiration

Loss carryforwards
	Federal net operating losses	$	523	2028-2032
	State net operating losses		1,024	2028-2032
	State capital losses		106	2014-2016

Credit carryforwards
	Federal investment tax credit		125	2025-2028
	Federal alternative minimum tax credit		28	Indefinite
	Federal - other		26	2016-2033
	State - other		9	2022

Schedule of Valuation and Qualifying Accounts of Deferred Tax Assets

Changes in deferred tax valuation allowances were:

	Balance at						Balance
	Beginning						at End
	of Period		Additions	Deductions			of Period

2013	$	5		$	1	(a)	$	4
2012		5						5
2011		6			1	(a)		5

(a) Primarily related to the expiration of state capital loss carryforwards.

Components of Income Tax Expense (Benefit) From Continuing Operations

				2013		2012		2011
Income Tax Expense (Benefit)
	Current - Federal			$	(59)	$	(32)	$	(71)
	Current - State				10		2		6
			Total Current Expense (Benefit)		(49)		(30)		(65)
	Deferred - Federal				244		185		208
	Deferred - State				20		15		16
			Total Deferred Expense, excluding benefits of operating loss carryforwards		264		200		224
	Investment tax credit, net - Federal				(4)		(6)		(6)
	Tax benefit of operating loss carryforwards
		Deferred - Federal			(4)		(46)
		Deferred - State			(1)		(12)
			Total Tax Benefit of Operating Loss Carryforwards		(5)		(58)
	Total income tax expense from continuing operations (a)			$	206	$	106	$	153

	Total income tax expense - Federal			$	177	$	101	$	131
	Total income tax expense - State				29		5		22
			Total income tax expense from continuing operations (a)	$	206	$	106	$	153

(a) Excludes current and deferred federal and state tax expense (benefit) recorded to Discontinued Operations of $1 million in 2013, $(4) million in 2012, and $(1) million in 2011. Also, excludes deferred federal and state tax expense (benefit) recorded to OCI of $18 million in 2013, $(12) million in 2012 and $(1) million in 2011.

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

				2013		2012		2011
Reconciliation of Income Taxes
	Federal income tax on Income Before Income Taxes at
		statutory tax rate - 35%		$	193	$	116	$	147
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit				20		6		15
	Amortization of investment tax credit				(4)		(6)		(5)
	Net operating loss carryforward (a)						(9)
	Other				(3)		(1)		(4)
			Total increase (decrease)		13		(10)		6
Total income tax expense from continuing operations				$	206	$	106	$	153
Effective income tax rate					37.4%		32.0%		36.5%

(a) During 2012, LKE recorded adjustments to deferred taxes related to net operating loss carryforwards based on income tax return adjustments.

Details of Taxes Other Than Income

			2013		2012		2011
Taxes, other than income
	Property and other		$	48	$	46	$	37
		Total	$	48	$	46	$	37

Louisville Gas And Electric Co [Member]

Income and Other Taxes [Line Items]

Components of Deferred Tax Assets and Liabilities

Significant components of LG&E's deferred income tax assets and liabilities were as follows:

			2013		2012
Deferred Tax Assets
	Regulatory liabilities		$	59	$	54
	Deferred investment tax credits			15		16
	Income taxes due to customers			19		21
	Other			28		9
		Total deferred tax assets		121		100

Deferred Tax Liabilities
	Plant - net			585		526
	Regulatory assets			83		86
	Accrued pension costs			24		27
	Other			8		9
		Total deferred tax liabilities		700		648
Net deferred tax liability			$	579	$	548

Components of Income Tax Expense (Benefit) From Continuing Operations

				2013		2012		2011
Income Tax Expense (Benefit)
	Current - Federal			$	52	$	(2)	$	12
	Current - State				16		3		8
			Total Current Expense (Benefit)		68		1		20
	Deferred - Federal				33		65		52
	Deferred - State				(2)		6		2
			Total Deferred Expense, excluding benefits of operating loss carryforwards		31		71		54
	Investment tax credit, net - Federal				(2)		(3)		(3)
	Tax benefit of operating loss carryforwards
		Deferred - Federal			(3)
			Total Tax Benefit of Operating Loss Carryforwards		(3)
	Total income tax expense			$	94	$	69	$	71

	Total income tax expense - Federal			$	80	$	60	$	61
	Total income tax expense - State				14		9		10
			Total income tax expense	$	94	$	69	$	71

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

				2013		2012		2011
Reconciliation of Income Taxes
	Federal income tax on Income Before Income Taxes at
		statutory tax rate - 35%		$	90	$	67	$	68
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit				10		5		7
	Amortization of investment tax credit				(2)		(3)		(3)
	Other				(4)				(1)
			Total increase (decrease)		4		2		3
Total income tax expense				$	94	$	69	$	71
Effective income tax rate					36.6%		35.9%		36.4%

Details of Taxes Other Than Income

			2013		2012		2011
Taxes, other than income
	Property and other		$	24	$	23	$	18
		Total	$	24	$	23	$	18

Kentucky Utilities Co [Member]

Income and Other Taxes [Line Items]

Components of Deferred Tax Assets and Liabilities

Significant components of KU's deferred income tax assets and liabilities were as follows:

			2013		2012
Deferred Tax Assets
	Regulatory liabilities		$	47	$	45
	Deferred investment tax credits			38		38
	Net operating loss carryforward			23		20
	Income taxes due to customers			4		5
	Accrued pension costs					(5)
	Other			8		7
		Total deferred tax assets		120		110

Deferred Tax Liabilities
	Plant - net			721		623
	Regulatory assets			50		65
	Other			4		5
		Total deferred tax liabilities		775		693
Net deferred tax liability			$	655	$	583

Components of Income Tax Expense (Benefit) From Continuing Operations

				2013		2012		2011
Income Tax Expense (Benefit)
	Current - Federal			$	51	$	(20)	$	(8)
	Current - State				12		(1)		4
			Total Current Expense (Benefit)		63		(21)		(4)
	Deferred - Federal				66		111		101
	Deferred - State				8		11		10
			Total Deferred Expense, excluding benefits of operating loss carryforwards		74		122		111
	Investment tax credit, net - Federal				(2)		(3)		(3)
	Tax benefit of operating loss carryforwards
		Deferred - Federal			(3)		(20)
			Total Tax Benefit of Operating Loss Carryforwards		(3)		(20)
	Total income tax expense (a)			$	132	$	78	$	104

	Total income tax expense - Federal			$	112	$	68	$	90
	Total income tax expense - State				20		10		14
			Total income tax expense (a)	$	132	$	78	$	104

(a) Excludes deferred federal and state tax (benefit) recorded to OCI of less than $1 million in 2013 and $1 million in 2012.

Reconciliation of Income Tax Expense Derived From Statutory Tax Rate

				2013		2012		2011
Reconciliation of Income Taxes
	Federal income tax on Income Before Income Taxes at
		statutory tax rate - 35%		$	126	$	75	$	99
Increase (decrease) due to:
	State income taxes, net of federal income tax benefit				14		6		9
	Amortization of investment tax credit				(2)		(3)		(3)
	Other				(6)				(1)
			Total increase (decrease)		6		3		5
Total income tax expense				$	132	$	78	$	104
Effective income tax rate					36.7%		36.3%		36.9%

Details of Taxes Other Than Income

			2013		2012		2011
Taxes, other than income
	Property and other		$	24	$	23	$	19
		Total	$	24	$	23	$	19

PPL Energy Supply