Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

4. Revenue from Contracts with Customers

(All Registrants)

See Note 3 in PPL's 2019 Form 10-K for a discussion of the principal activities from which the Registrants and PPL’s segments generate their revenues.

The following tables reconcile "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the period ended March 31.

	2020 Three Months
	PPL			PPL Electric			LKE			LG&E			KU
Operating Revenues (a)	$	2,054		$	608		$	825		$	407		$	432
Revenues derived from:
Alternative revenue programs (b)	(3		)	—			(3		)	(3		)	—
Other (c)	(10		)	(2		)	(6		)	(3		)	(3		)
Revenues from Contracts with Customers	$	2,041		$	606		$	816		$	401		$	429

	2019 Three Months
	PPL			PPL Electric			LKE			LG&E			KU
Operating Revenues (a)	$	2,079		$	645		$	845		$	410		$	450
Revenues derived from:
Alternative revenue programs (b)	(6		)	(4		)	(2		)	(2		)	—
Other (c)	(10		)	(3		)	(4		)	(1		)	(3		)
Revenues from Contracts with Customers	$	2,063		$	638		$	839		$	407		$	447

(a) PPL includes $614 million and $583 million of revenues from external customers reported by the U.K. Regulated segment for the three months ended March 31, 2020 and 2019. PPL Electric and LKE represent revenues from external customers reported by the Pennsylvania Regulated and Kentucky Regulated segments. See Note 3 for additional information.

(b) Alternative revenue programs include the transmission formula rate for PPL Electric, the ECR and DSM programs for LG&E and KU, the GLT program for LG&E, and the generation formula rate for KU. This line item shows the over/under collection of these rate mechanisms with over-collections of revenue shown as positive amounts in the table above and under-collections shown as negative amounts.

(c) Represents additional revenues outside the scope of revenues from contracts with customers, such as leases and other miscellaneous revenues.

The following tables show revenues from contracts with customers disaggregated by customer class for the periods ended March 31.

	2020 Three Months
	PPL (d)		PPL Electric (d)		LKE		LG&E		KU
Licensed energy suppliers (a)	$	583	$	—	$	—	$	—	$	—
Residential	714		344		370		187		183
Commercial	312		81		231		124		107
Industrial	144		8		136		45		91
Other (b)	116		14		66		28		38
Wholesale - municipality	5		—		5		—		5
Wholesale - other (c)	8		—		8		17		5
Transmission	159		159		—		—		—
Revenues from Contracts with Customers	$	2,041	$	606	$	816	$	401	$	429

	2019 Three Months
	PPL		PPL Electric		LKE		LG&E		KU
Licensed energy suppliers (a)	$	556	$	—	$	—	$	—	$	—
Residential	778		407		371		189		182
Commercial	319		95		224		121		103
Industrial	150		17		133		44		89
Other (b)	114		14		70		33		37
Wholesale - municipality	28		—		28		—		28
Wholesale - other (c)	13		—		13		20		8
Transmission	105		105		—		—		—
Revenues from Contracts with Customers	$	2,063	$	638	$	839	$	407	$	447

(a) Represents customers of WPD.

(b) Primarily includes revenues from pole attachments, street lighting, other public authorities and other non-core businesses.

(c) Includes wholesale power and transmission revenues. LG&E and KU amounts include intercompany power sales and transmission revenues, which are eliminated upon consolidation at LKE.

(d) In the fourth quarter of 2019, management deemed it appropriate to present the revenue offset associated with network integration transmission service (NITS) as distribution revenue rather than transmission revenue.

As discussed in Note 2 in PPL's 2019 Form 10-K, PPL segments its business by geographic location. Revenues from external customers for each segment/geographic location are reconciled to revenues from contracts with customers in the footnotes to the tables above. PPL Electric's revenues from contracts with customers are further disaggregated by distribution and transmission, which were $447 million and $159 million for the three months ended March 31, 2020 and $533 million and $105 million for the three months ended March 31, 2019.

Contract receivables from customers are primarily included in "Accounts receivable - Customer" and "Unbilled revenues" on the Balance Sheets.

The following table shows the accounts receivable and unbilled revenues balances that were impaired for the period ended March 31.

	Three Months
	2020		2019
PPL	$	8	$	9
PPL Electric	4		6
LKE	2		2
LG&E	1		1
KU	1		1

The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers.

	PPL		PPL Electric		LKE		LG&E		KU
Contract liabilities at December 31, 2019	$	44	$	21	$	9	$	5	$	4
Contract liabilities at March 31, 2020	42		15		14		10		4
Revenue recognized during the three months ended March 31, 2020 that was included in the contract liability balance at December 31, 2019	23		8		9		5		4
Contract liabilities at December 31, 2018	$	42	$	23	$	9	$	5	$	4
Contract liabilities at March 31, 2019	37		14		7		4		3
Revenue recognized during the three months ended March 31, 2019 that was included in the contract liability balance at December 31, 2018	25		11		9		5		4

Contract liabilities result from recording contractual billings in advance for customer attachments to the Registrants' infrastructure and payments received in excess of revenues earned to date. Advanced billings for customer attachments are recognized as revenue ratably over the billing period. Payments received in excess of revenues earned to date are recognized as revenue as services are delivered in subsequent periods.

At March 31, 2020, PPL had $32 million of performance obligations attributable to Corporate and Other that have not been satisfied. Of this amount, PPL expects to recognize approximately $28 million within the next 12 months.