XML 60 R43.htm IDEA: XBRL DOCUMENT v2.4.0.8
Derivative Instruments and Hedging Activities (Tables)
 3 Months Ended
Mar. 31, 2014
Derivative Instruments And Hedging Activities [Line Items]  
Commodity Price Risk (Non-trading) - Economic Activity - Pre-tax Gains (Losses) Associated with Economic Activity

The unrealized gains (losses) for economic activity for the periods ended March 31 were as follows.

     Three Months
       2014 2013
Operating Revenues            
 Unregulated wholesale energy        $ (789) $ (822)
 Unregulated retail energy         (26)   (8)
Operating Expenses            
 Fuel         (1)   (1)
 Energy purchases         580   634
Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts

At March 31, 2014, the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows.

    Volumes (a)
Commodity Unit of Measure 2014 (b) 2015 2016 Thereafter
           
Power MWh  (27,112,584)  (28,794,377)  3,496,447  14,130,735
Capacity MW-Month  (14,918)  (5,120)  501  9
Gas MMBtu  63,248,020  14,120,116  57,884,707  25,814,197
Coal Tons  25,000      
FTRs MW-Month  4,734  1,705    
Oil Barrels  156,000  436,233  331,258  279,060

(a)       Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.

(b)       Represents balance of the current year.

Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.

       March 31, 2014 December 31, 2013
       Derivatives designated as  Derivatives not designated Derivatives designated as  Derivatives not designated
       hedging instruments  as hedging instruments  hedging instruments  as hedging instruments
       Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
Current:                        
 Price Risk Management                         
  Assets/Liabilities (a):                        
   Interest rate swaps (b) $ 7 $ 3    $ 4 $ 82       $ 4
   Cross-currency swaps (b)      4          $ 4      
   Foreign currency                        
    contracts      18      62      16      55
   Commodity contracts       $ 1,080   1,211       $ 860   750
     Total current   7   25   1,080   1,277   82   20   860   809
Noncurrent:                        
 Price Risk Management                         
  Assets/Liabilities (a):                        
   Interest rate swaps (b)   2   4      36   9         32
   Cross-currency swaps (b)      51            28      
   Foreign currency                        
    contracts      6   5   37      4      31
   Commodity contracts         337   316         328   320
     Total noncurrent   2   61   342   389   9   32   328   383
Total derivatives $ 9 $ 86 $ 1,422 $ 1,666 $ 91 $ 52 $ 1,188 $ 1,192

(a)       Represents the location on the Balance Sheets.

(b)       Excludes accrued interest, if applicable.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the three months ended March 31.

              2014 2013
                 Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                 in Income    in Income
              on Derivative   on Derivative
           Gain (Loss) (Ineffective Gain (Loss) (Ineffective
        Location of Reclassified Portion and Reclassified Portion and
     Derivative Gain Gain (Loss) from AOCI Amount from AOCI Amount
     (Loss) Recognized in Recognized into Income Excluded from into Income Excluded from
Derivative   OCI (Effective Portion)  in Income  (Effective Effectiveness (Effective Effectiveness
Relationships 2014 2013 on Derivative Portion) Testing) Portion) Testing)
Cash Flow Hedges:                    
 Interest rate swaps $ (46) $ 9 Interest expense $ (5) $ 2 $ (5)   
 Cross-currency swaps   (25)   73 Other income            
            (expense) - net   (29)      69   
 Commodity contracts       Unregulated             
            wholesale energy   1      67 $ 1
           Energy purchases   7      (16)   
           Depreciation   1         
Total $ (71) $ 82    $ (25) $ 2 $ 115 $ 1
                         
Net Investment Hedges:                     
  Foreign currency contracts $ (4) $ 16               

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivative 2014 2013
         
Foreign currency contracts Other income (expense) - net $ (24) $ 119
Interest rate swaps Interest expense   (2)   (2)
Commodity contracts Unregulated wholesale energy (a)   (3,044)   (706)
  Unregulated retail energy   (64)   (7)
  Fuel   (1)   1
  Energy purchases (b)   2,364   586
  Total $ (771) $ (9)
         
Derivatives Not Designated as Location of Gain (Loss) Recognized as      
Hedging Instruments Regulatory Liabilities/Assets 2014 2013
         
Interest rate swaps Regulatory assets - noncurrent $ (4) $ 4
         
Derivatives Designated as Location of Gain (Loss) Recognized as      
Cash Flow Hedges Regulatory Liabilities/Assets 2014 2013
         
Interest rate swaps Regulatory liabilities - noncurrent    $ 10

(a)       2014 includes significant realized and unrealized losses on physical and financial commodity sales contracts due to the unusually cold weather.

(b)       2014 includes significant realized and unrealized gains on physical and financial commodity purchase contracts due to the unusually cold weather.

[1]
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
March 31, 2014                        
PPL                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165
 Treasury Derivatives   14   14         225   14   24   187
Total $ 1,431 $ 1,282 $ 8 $ 141 $ 1,752 $ 1,282 $ 118 $ 352
                           
PPL Energy Supply                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165

LKE                        
 Treasury Derivatives             $ 40    $ 20 $ 20
                           
LG&E                        
 Treasury Derivatives             $ 40    $ 20 $ 20

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At March 31, 2014, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

      PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 339 $ 168 $ 27 $ 27
Aggregate fair value of collateral posted on these derivative instruments   57   36   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   363  209   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

PPL Energy Supply LLC [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Commodity Price Risk (Non-trading) - Economic Activity - Pre-tax Gains (Losses) Associated with Economic Activity

The unrealized gains (losses) for economic activity for the periods ended March 31 were as follows.

     Three Months
       2014 2013
Operating Revenues            
 Unregulated wholesale energy        $ (789) $ (822)
 Unregulated retail energy         (26)   (8)
Operating Expenses            
 Fuel         (1)   (1)
 Energy purchases         580   634
Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts

At March 31, 2014, the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows.

    Volumes (a)
Commodity Unit of Measure 2014 (b) 2015 2016 Thereafter
           
Power MWh  (27,112,584)  (28,794,377)  3,496,447  14,130,735
Capacity MW-Month  (14,918)  (5,120)  501  9
Gas MMBtu  63,248,020  14,120,116  57,884,707  25,814,197
Coal Tons  25,000      
FTRs MW-Month  4,734  1,705    
Oil Barrels  156,000  436,233  331,258  279,060

(a)       Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.

(b)       Represents balance of the current year.

Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and location of derivative instruments recorded on the Balance Sheets.

       March 31, 2014 December 31, 2013
       Derivatives not designated Derivatives not designated
       as hedging instruments  as hedging instruments
       Assets Liabilities Assets Liabilities
Current:            
 Price Risk Management             
  Assets/Liabilities (a):            
   Commodity contracts $ 1,080 $ 1,211 $ 860 $ 750
     Total current   1,080   1,211   860   750
Noncurrent:            
 Price Risk Management             
  Assets/Liabilities (a):            
   Commodity contracts   337   316   328   320
     Total noncurrent   337   316   328   320
Total derivatives $ 1,417 $ 1,527 $ 1,188 $ 1,070

(a)       Represents the location on the Balance Sheets.

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments recognized in income or OCI for the three months ended March 31.

             2014 2013
                Gain (Loss)    Gain (Loss)
                 Recognized    Recognized
                in Income    in Income
                on Derivative    on Derivative
          Gain (Loss) (Ineffective Gain (Loss) (Ineffective
        Location of Reclassified Portion and Reclassified Portion and
     Derivative Gain  Gains (Losses) from AOCI Amount from AOCI Amount
     (Loss) Recognized in Recognized into Income Excluded from into Income Excluded from
Derivative  OCI (Effective Portion)  in Income (Effective Effectiveness (Effective Effectiveness
Relationships 2014 2013 on Derivative  Portion)  Testing) Portion) Testing)
Cash Flow Hedges:                    
  Commodity contracts       Unregulated             
            wholesale energy $ 1    $ 67 $ 1
           Energy purchases   7      (16)   
           Depreciation   1         
Total          $ 9    $ 51 $ 1
                         
                      
                        

Derivatives Not Designated as Location of Gain (Loss) Recognized in      
Hedging Instruments  Income on Derivatives 2014 2013
         
Commodity contracts Unregulated wholesale energy (a) $ (3,044) $ (706)
  Unregulated retail energy   (64)   (7)
  Fuel   (1)   1
  Energy purchases (b)   2,364   586
  Total $ (745) $ (126)

(a)       2014 includes significant realized and unrealized losses on physical and financial commodity sales contracts due to the unusually cold weather.

(b)       2014 includes significant realized and unrealized gains on physical and financial commodity purchase contracts due to the unusually cold weather.

Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
March 31, 2014                        
PPL                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165
 Treasury Derivatives   14   14         225   14   24   187
Total $ 1,431 $ 1,282 $ 8 $ 141 $ 1,752 $ 1,282 $ 118 $ 352
                           
PPL Energy Supply                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165

LKE                        
 Treasury Derivatives             $ 40    $ 20 $ 20
                           
LG&E                        
 Treasury Derivatives             $ 40    $ 20 $ 20

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At March 31, 2014, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

      PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 339 $ 168 $ 27 $ 27
Aggregate fair value of collateral posted on these derivative instruments   57   36   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   363  209   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

LG And E And KU Energy LLC [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and the location on the Balance Sheets of derivative instruments designated as cash flow hedges.

       March 31, 2014 December 31, 2013
       Assets Liabilities Assets Liabilities
Current:            
 Price Risk Management             
  Assets/Liabilities (a):            
   Interest rate swaps    $ 4    $ 4
     Total current      4      4
Noncurrent:            
 Price Risk Management             
  Assets/Liabilities (a):            
   Interest rate swaps      36      32
     Total noncurrent      36      32
Total derivatives    $ 40    $ 36

(a)       Represents the location on the Balance Sheets.
Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

(LKE)

 

The following table presents the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the three months ended March 31.

Derivatives Instruments Location of Gain (Loss) 2014 2013
         
Interest rate swaps Regulatory liabilities - noncurrent    $ 10

The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the three months ended March 31.

Derivative Instruments Location of Gain (Loss) 2014 2013
         
Interest rate swaps Interest expense $ (2) $ (2)
         
Derivative Instruments Location of Gain (Loss) 2014 2013
         
Interest rate swaps Regulatory assets - noncurrent $ (4) $ 4
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
March 31, 2014                        
PPL                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165
 Treasury Derivatives   14   14         225   14   24   187
Total $ 1,431 $ 1,282 $ 8 $ 141 $ 1,752 $ 1,282 $ 118 $ 352
                           
PPL Energy Supply                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165

LKE                        
 Treasury Derivatives             $ 40    $ 20 $ 20
                           
LG&E                        
 Treasury Derivatives             $ 40    $ 20 $ 20

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At March 31, 2014, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

      PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 339 $ 168 $ 27 $ 27
Aggregate fair value of collateral posted on these derivative instruments   57   36   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   363  209   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

Louisville Gas And Electric Co [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and the location on the Balance Sheets of derivative instruments designated as cash flow hedges.

The following table presents the fair value and the location on the Balance Sheets of derivatives not designated as hedging instruments.

       March 31, 2014 December 31, 2013
       Assets Liabilities Assets Liabilities
Current:            
 Price Risk Management             
  Assets/Liabilities (a):            
   Interest rate swaps    $ 4    $ 4
     Total current      4      4
Noncurrent:            
 Price Risk Management             
  Assets/Liabilities (a):            
   Interest rate swaps      36      32
     Total noncurrent      36      32
Total derivatives    $ 40    $ 36

(a)       Represents the location on the Balance Sheets.
Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

(LG&E)

 

The following table presents the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the three months ended March 31.

Derivative Instruments Location of Gain (Loss) 2014 2013
         
Interest rate swaps Regulatory liabilities - noncurrent    $ 5

The following tables present the pre-tax effect of derivatives not designated as cash flow hedges that are recognized in income or regulatory assets for the three months ended March 31.

Derivative Instruments Location of Gain (Loss) 2014 2013
         
Interest rate swaps Interest expense $ (2) $ (2)
         
Derivative Instruments Location of Gain (Loss) 2014 2013
         
Interest rate swaps Regulatory assets - noncurrent $ (4) $ 4
Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.

     Assets Liabilities
        Eligible for Offset       Eligible for Offset   
           Cash          Cash   
        Derivative Collateral       Derivative Collateral   
     Gross Instruments Received Net Gross Instruments Pledged Net
March 31, 2014                        
PPL                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165
 Treasury Derivatives   14   14         225   14   24   187
Total $ 1,431 $ 1,282 $ 8 $ 141 $ 1,752 $ 1,282 $ 118 $ 352
                           
PPL Energy Supply                        
 Energy Commodities $ 1,417 $ 1,268 $ 8 $ 141 $ 1,527 $ 1,268 $ 94 $ 165

LKE                        
 Treasury Derivatives             $ 40    $ 20 $ 20
                           
LG&E                        
 Treasury Derivatives             $ 40    $ 20 $ 20

December 31, 2013                        
PPL                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157
 Treasury Derivatives   91   61      30   174   61   23   90
Total $ 1,279 $ 973 $ 7 $ 299 $ 1,244 $ 973 $ 24 $ 247
                           
PPL Energy Supply                        
 Energy Commodities $ 1,188 $ 912 $ 7 $ 269 $ 1,070 $ 912 $ 1 $ 157

LKE                        
 Treasury Derivatives             $ 36    $ 20 $ 16
                           
LG&E                        
 Treasury Derivatives             $ 36    $ 20 $ 16
Credit Risk-Related Contingent Features

At March 31, 2014, the effect of a decrease in credit ratings below investment grade on derivative contracts that contain credit risk-related contingent features and were in a net liability position is summarized as follows:

      PPL      
    PPL Energy Supply LKE LG&E
               
Aggregate fair value of derivative instruments in a net liability             
 position with credit risk-related contingent features $ 339 $ 168 $ 27 $ 27
Aggregate fair value of collateral posted on these derivative instruments   57   36   21   21
Aggregate fair value of additional collateral requirements in the event of            
 a credit downgrade below investment grade (a)   363  209   7  7

(a)       Includes the effect of net receivables and payables already recorded on the Balance Sheet.

Kentucky Utilities Co [Member]
  
Derivative Instruments And Hedging Activities [Line Items]  
Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

(KU)

 

The following table presents the pre-tax effect of derivative instruments designated as cash flow hedges that are recognized in regulatory liabilities for the three months ended March 31.

Derivative Instruments Location of Gain (Loss) 2014 2013
         
Interest rate swaps Regulatory liabilities - noncurrent    $ 5
[1] 2014 includes significant realized and unrealized losses on physical and financial commodity sales contracts due to the unusually cold weather.