Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instruments And Hedging Activities [Line Items]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

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

	September 30, 2019								December 31, 2018
	Derivatives designated as hedging instruments				Derivatives not designated as hedging instruments				Derivatives designated as hedging instruments				Derivatives not designated as hedging instruments
	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
Current:
Price Risk Management
Assets/Liabilities (a):
Interest rate swaps (b)	$	—	$	—	$	—	$	5	$	—	$	—	$	—	$	4
Cross-currency swaps (b)	7		—		—		—		6		—		—		—
Foreign currency contracts	—		—		202		3		—		—		103		2
Total current	7		—		202		8		6		—		103		6
Noncurrent:
Price Risk Management
Assets/Liabilities (a):
Interest rate swaps (b)	—		—		—		20		—		—		—		16
Cross-currency swaps (b)	188		—		—		—		129		—		—		—
Foreign currency contracts	—		—		22		—		—		—		99		—
Total noncurrent	188		—		22		20		129		—		99		16
Total derivatives	$	195	$	—	$	224	$	28	$	135	$	—	$	202	$	22

(a) Current portion is included in "Price risk management assets" and "Other current liabilities" and noncurrent portion is included in "Price risk management assets" and "Other deferred credits and noncurrent liabilities" on the Balance Sheets.

(b)

Excludes accrued interest, if applicable.

Derivative Instruments, Gain (Loss)

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended September 30, 2019.

	Three Months			Nine Months				Three Months			Nine Months
Derivative Relationships	Derivative Gain (Loss) Recognized in OCI			Derivative Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Reclassified from AOCI into Income
Cash Flow Hedges:
Interest rate swaps	$	(22	)	$	(30	)	Interest expense	$	(2	)	$	(6	)
Cross-currency swaps	41			69			Other income (expense) - net	27			34
Total	$	19		$	39			$	25		$	28
Net Investment Hedges:
Foreign currency contracts	$	—		$	1

Derivatives Not Designated as	Location of Gain (Loss) Recognized in
Hedging Instruments	Income on Derivative	Three Months			Nine Months
Foreign currency contracts	Other income (expense) - net	$	44		$	56
Interest rate swaps	Interest expense	(1		)	(3		)
	Total	$	43		$	53
Derivatives Not Designated as	Location of Gain (Loss) Recognized as
Hedging Instruments	Regulatory Liabilities/Assets	Three Months			Nine Months
Interest rate swaps	Regulatory assets - noncurrent	$	(2	)	$	(5	)

The following tables present the pre-tax effect of derivative instruments recognized in income, OCI or regulatory assets and regulatory liabilities for the periods ended September 30, 2018.

	Three Months		Nine Months			Three Months			Nine Months
Derivative Relationships	Derivative Gain (Loss) Recognized in OCI		Derivative Gain (Loss) Recognized in OCI		Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Reclassified from AOCI into Income
Cash Flow Hedges:
Interest rate swaps	$	—	$	—	Interest expense	$	(2	)	$	(6	)
Cross-currency swaps	27		26		Interest expense	1			1
					Other income (expense) - net	18			30
Total	$	27	$	26		$	17		$	25
Net Investment Hedges:
Foreign currency contracts	$	—	$	11

Derivatives Not Designated as	Location of Gain (Loss) Recognized in
Hedging Instruments	Income on Derivative	Three Months			Nine Months
Foreign currency contracts	Other income (expense) - net	$	40		$	92
Interest rate swaps	Interest expense	(1		)	(4		)
	Total	$	39		$	88
Derivatives Not Designated as	Location of Gain (Loss) Recognized as
Hedging Instruments	Regulatory Liabilities/Assets	Three Months			Nine Months
Interest rate swaps	Regulatory assets - noncurrent	$	2		$	7

The following table presents the effect of cash flow hedge activity on the Statement of Income for the periods end September 30, 2019.

	Location and Amount of Gain (Loss) Recognized in Income on Hedging Relationships
	Three Months						Nine Months
	Interest Expense			Other Income (Expense) - net			Interest Expense			Other Income (Expense) - net
Total income and expense line items presented in the income statement in which the effect of cash flow hedges are recorded	$	259		$	126		$	746		$	309
The effects of cash flow hedges:
Gain (Loss) on cash flow hedging relationships:
Interest rate swaps:
Amount of gain (loss) reclassified from AOCI to income	(2		)	—			(6		)	—
Cross-currency swaps:
Hedged items	—			(27		)	—			(34		)
Amount of gain (loss) reclassified from AOCI to income	—			27			—			34

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
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
September 30, 2019
Treasury Derivatives
PPL	$	419	$	3	$	40	$	376	$	28	$	3	$	—	$	25
LKE	—		—		—		—		25		—		—		25
LG&E	—		—		—		—		25		—		—		25

	Assets								Liabilities
			Eligible for Offset								Eligible for Offset
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
December 31, 2018
Treasury Derivatives
PPL	$	337	$	2	$	40	$	295	$	22	$	2	$	—	$	20
LKE	—		—		—		—		20		—		—		20
LG&E	—		—		—		—		20		—		—		20

Credit Risk-Related Contingent Features

At September 30, 2019, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

	PPL		LKE		LG&E
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features	$	4	$	4	$	4
Aggregate fair value of collateral posted on these derivative instruments	—		—		—
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade (a)	4		4		4

(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]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

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

	September 30, 2019				December 31, 2018
	Assets		Liabilities		Assets		Liabilities
Current:
Price Risk Management
Assets/Liabilities:
Interest rate swaps	$	—	$	5	$	—	$	4
Total current	—		5		—		4
Noncurrent:
Price Risk Management
Assets/Liabilities:
Interest rate swaps	—		20		—		16
Total noncurrent	—		20		—		16
Total derivatives	$	—	$	25	$	—	$	20

Derivative Instruments, Gain (Loss)

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 periods ended September 30, 2019.

	Location of Gain (Loss) Recognized in
Derivative Instruments	Income on Derivatives	Three Months			Nine Months
Interest rate swaps	Interest expense	$	(1	)	$	(3	)
	Location of Gain (Loss) Recognized in
Derivative Instruments	Regulatory Assets	Three Months			Nine Months
Interest rate swaps	Regulatory assets - noncurrent	$	(2	)	$	(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 periods ended September 30, 2018. 

	Location of Gain (Loss) Recognized in
Derivative Instruments	Income on Derivatives	Three Months			Nine Months
Interest rate swaps	Interest expense	$	(1	)	$	(4	)
	Location of Gain (Loss) Recognized in
Derivative Instruments	Regulatory Assets	Three Months			Nine Months
Interest rate swaps	Regulatory assets - noncurrent	$	2		$	7

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
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
September 30, 2019
Treasury Derivatives
PPL	$	419	$	3	$	40	$	376	$	28	$	3	$	—	$	25
LKE	—		—		—		—		25		—		—		25
LG&E	—		—		—		—		25		—		—		25

	Assets								Liabilities
			Eligible for Offset								Eligible for Offset
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
December 31, 2018
Treasury Derivatives
PPL	$	337	$	2	$	40	$	295	$	22	$	2	$	—	$	20
LKE	—		—		—		—		20		—		—		20
LG&E	—		—		—		—		20		—		—		20

Credit Risk-Related Contingent Features

At September 30, 2019, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

	PPL		LKE		LG&E
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features	$	4	$	4	$	4
Aggregate fair value of collateral posted on these derivative instruments	—		—		—
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade (a)	4		4		4

(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]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

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

	September 30, 2019				December 31, 2018
	Assets		Liabilities		Assets		Liabilities
Current:
Price Risk Management
Assets/Liabilities:
Interest rate swaps	$	—	$	5	$	—	$	4
Total current	—		5		—		4
Noncurrent:
Price Risk Management
Assets/Liabilities:
Interest rate swaps	—		20		—		16
Total noncurrent	—		20		—		16
Total derivatives	$	—	$	25	$	—	$	20

Derivative Instruments, Gain (Loss)

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 periods ended September 30, 2019.

	Location of Gain (Loss) Recognized in
Derivative Instruments	Income on Derivatives	Three Months			Nine Months
Interest rate swaps	Interest expense	$	(1	)	$	(3	)
	Location of Gain (Loss) Recognized in
Derivative Instruments	Regulatory Assets	Three Months			Nine Months
Interest rate swaps	Regulatory assets - noncurrent	$	(2	)	$	(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 periods ended September 30, 2018. 

	Location of Gain (Loss) Recognized in
Derivative Instruments	Income on Derivatives	Three Months			Nine Months
Interest rate swaps	Interest expense	$	(1	)	$	(4	)
	Location of Gain (Loss) Recognized in
Derivative Instruments	Regulatory Assets	Three Months			Nine Months
Interest rate swaps	Regulatory assets - noncurrent	$	2		$	7

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
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
September 30, 2019
Treasury Derivatives
PPL	$	419	$	3	$	40	$	376	$	28	$	3	$	—	$	25
LKE	—		—		—		—		25		—		—		25
LG&E	—		—		—		—		25		—		—		25

	Assets								Liabilities
			Eligible for Offset								Eligible for Offset
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
December 31, 2018
Treasury Derivatives
PPL	$	337	$	2	$	40	$	295	$	22	$	2	$	—	$	20
LKE	—		—		—		—		20		—		—		20
LG&E	—		—		—		—		20		—		—		20

Credit Risk-Related Contingent Features

At September 30, 2019, derivative contracts in a net liability position that contain credit risk-related contingent features, collateral posted on those positions and the related effect of a decrease in credit ratings below investment grade are summarized as follows:

	PPL		LKE		LG&E
Aggregate fair value of derivative instruments in a net liability position with credit risk-related contingent features	$	4	$	4	$	4
Aggregate fair value of collateral posted on these derivative instruments	—		—		—
Aggregate fair value of additional collateral requirements in the event of a credit downgrade below investment grade (a)	4		4		4

(a)

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