form10q.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 10-Q/A
AMENDMENT No. 1
 
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2011
OR
[   ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _________ to ___________

Commission File
Number
Registrant; State of Incorporation;
Address and Telephone Number
IRS Employer
Identification No.
     
1-11459
PPL Corporation
(Exact name of Registrant as specified in its charter)
(Pennsylvania)
Two North Ninth Street
Allentown, PA  18101-1179
(610) 774-5151
23-2758192
     
1-32944
PPL Energy Supply, LLC
(Exact name of Registrant as specified in its charter)
(Delaware)
Two North Ninth Street
Allentown, PA  18101-1179
(610) 774-5151
23-3074920
     
1-905
PPL Electric Utilities Corporation
(Exact name of Registrant as specified in its charter)
(Pennsylvania)
Two North Ninth Street
Allentown, PA  18101-1179
(610) 774-5151
23-0959590
     
333-173665
LG&E and KU Energy LLC
(Exact name of Registrant as specified in its charter)
(Kentucky)
220 West Main Street
Louisville, Kentucky 40202
(502) 627-2000
20-0523163
     
1-2893
Louisville Gas and Electric Company
(Exact name of Registrant as specified in its charter)
(Kentucky)
220 West Main Street
Louisville, Kentucky 40202
(502) 627-2000
61-0264150
     
1-3464
Kentucky Utilities Company
(Exact name of Registrant as specified in its charter)
(Kentucky and Virginia)
One Quality Street
Lexington, Kentucky 40507
 (502) 627-2000
61-0247570


 
 
 

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

 
PPL Corporation
Yes  X   
No        
  
 
PPL Energy Supply, LLC
Yes  X   
No        
  
 
PPL Electric Utilities Corporation
Yes  X   
No        
  
 
LG&E and KU Energy LLC
Yes        
No X    
  
 
Louisville Gas and Electric Company
Yes        
No X    
  
 
Kentucky Utilities Company
Yes        
No X    
  

Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).

 
PPL Corporation
Yes  X   
No        
  
 
PPL Energy Supply, LLC
Yes  X   
No        
  
 
PPL Electric Utilities Corporation
Yes  X   
No        
  
 
LG&E and KU Energy LLC
Yes  X   
No        
  
 
Louisville Gas and Electric Company
Yes  X   
No        
  
 
Kentucky Utilities Company
Yes  X   
No        
  

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

   
Large accelerated
filer
Accelerated
filer
Non-accelerated
filer
Smaller reporting
company
 
PPL Corporation
[ X ]
[     ]
[     ]
[     ]
 
PPL Energy Supply, LLC
[     ]
[     ]
[ X ]
[     ]
 
PPL Electric Utilities Corporation
[     ]
[     ]
[ X ]
[     ]
 
LG&E and KU Energy LLC
[     ]
[     ]
[ X ]
[     ]
 
Louisville Gas and Electric Company
[     ]
[     ]
[ X ]
[     ]
 
Kentucky Utilities Company
[     ]
[     ]
[ X ]
[     ]

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).

 
PPL Corporation
Yes        
No  X   
  
 
PPL Energy Supply, LLC
Yes        
No  X   
  
 
PPL Electric Utilities Corporation
Yes        
No  X   
  
 
LG&E and KU Energy LLC
Yes        
No  X   
  
 
Louisville Gas and Electric Company
Yes        
No  X   
  
 
Kentucky Utilities Company
Yes        
No  X   
  

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 
PPL Corporation
Common stock, $.01 par value, 577,749,262 shares outstanding at July 29, 2011.
     
 
PPL Energy Supply, LLC
PPL Corporation indirectly holds all of the membership interests in PPL Energy Supply, LLC.
     
 
PPL Electric Utilities Corporation
Common stock, no par value, 66,368,056 shares outstanding and all held by PPL Corporation at July 29, 2011.
     
 
LG&E and KU Energy LLC
PPL Corporation directly holds all of the membership interests in LG&E and KU Energy LLC.
     
 
Louisville Gas and Electric Company
Common stock, no par value, 21,294,223 shares outstanding and all held by LG&E and KU Energy LLC at July 29, 2011.
     
 
Kentucky Utilities Company
Common stock, no par value, 37,817,878 shares outstanding and all held by LG&E and KU Energy LLC at July 29, 2011.

This document is available free of charge at the Investor Center on PPL's website at www.pplweb.com.  However, information on this website does not constitute a part of this Form 10-Q.
 
 
 
EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A amends the Quarterly Report on Form 10-Q of PPL Corporation, PPL Energy Supply, LLC and PPL Electric Utilities Corporation for the period ended June 30, 2011, as filed by the Registrants on August 8, 2011 (Original Filing).  This Amendment No. 1 is being filed solely to submit the Form 10-Q for PPL Corporation, PPL Energy Supply, LLC, PPL Electric Utilities Corporation, LG&E and KU Energy LLC, Louisville Gas and Electric Company and Kentucky Utilities Company as the electronic submission of the Original Filing inadvertently excluded LG&E and KU Energy LLC, Louisville Gas and Electric Company and Kentucky Utilities Company.  This Amendment No. 1 does not reflect events that have occurred subsequent to the filing of the Original Filing.
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


 
PPL Corporation
 
(Registrant)
  
     
Date:  August 8, 2011
/s/  Paul A. Farr
  
 
Paul A. Farr
  
 
Executive Vice President and Chief Financial Officer
  
 
(Principal Financial Officer)
  
     
 
PPL Energy Supply, LLC
 
(Registrant)
  
     
Date:  August 8, 2011
/s/  Paul A. Farr
  
 
Paul A. Farr
  
 
Executive Vice President
  
 
(Principal Financial Officer)
  
     
 
PPL Electric Utilities Corporation
 
(Registrant)
  
     
Date:  August 8, 2011
/s/  James E. Abel
  
 
James E. Abel
  
 
Treasurer
  
 
(Principal Financial Officer)
  

 
LG&E and KU Energy LLC
 
(Registrant)
  
     
 
Louisville Gas and Electric Company
 
(Registrant)
  
     
 
Kentucky Utilities Company
 
(Registrant)
  
     
     
     
Date:  August 8, 2011
/s/  S. Bradford Rives
  
 
S. Bradford Rives
Chief Financial Officer
  
 
(Principal Financial Officer)
  

 
 
 





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PPL CORPORATION
PPL ENERGY SUPPLY, LLC
PPL ELECTRIC UTILITIES CORPORATION
LG&E AND KU ENERGY LLC
LOUISVILLE GAS AND ELECTRIC COMPANY
KENTUCKY UTILITIES COMPANY

FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2011


Table of Contents
   
Page
     
i 
  
1
  
PART I.  FINANCIAL INFORMATION
    
 
Item 1.  Financial Statements
    
   
PPL Corporation and Subsidiaries
    
     
4
  
     
5
  
     
6
  
     
8
  
     
9
  
   
PPL Energy Supply, LLC and Subsidiaries
    
     
10
  
     
11
  
     
12
  
     
14
  
     
15
  
   
PPL Electric Utilities Corporation and Subsidiaries
    
     
16
  
     
17
  
     
18
  
     
20
  
   
LG&E and KU Energy LLC and Subsidiaries
    
     
22
  
     
23
  
     
24
  
     
26
  
   
Louisville Gas and Electric Company
    
     
28
  
     
29
  
     
30
  
     
32
  
   
Kentucky Utilities Company
    
     
34
  
     
35
  
     
36
  
     
38
  
 
Combined Notes to Condensed Financial Statements (Unaudited)
    
   
39
  
   
40
  
   
41
  
   
42
  
   
43
  
   
46
  
   
51
  

 
 
 


   
57
   
62
   
64
   
81
   
84
   
85
   
92
   
107
   
107
   
108
   
110
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
  
     
111
     
141
     
155
     
163
     
174
     
184
 
194
 
194
PART II.  OTHER INFORMATION
  
 
196
 
196
 
198
 
198
201
COMPUTATIONS OF RATIO OF EARNINGS TO FIXED CHARGES
202
 
208
 
220


 
 
 

GLOSSARY OF TERMS AND ABBREVIATIONS

PPL Corporation and its current and former subsidiaries

Central Networks - collectively Central Networks East plc, Central Networks Limited and certain other related assets and liabilities.  On April 1, 2011, PPL WEM Holdings plc (formerly WPD Investment Holdings Limited) purchased all of the outstanding ordinary share capital of these companies from E.ON AG subsidiaries.  Central Networks West plc (subsequently renamed Western Power Distribution (West Midlands) plc), wholly owned by Central Networks Limited (subsequently renamed WPD Midlands Holdings Limited), and Central Networks East plc (subsequently renamed Western Power Distribution (East Midlands) plc) are British regional electricity distribution utility companies.

KU - Kentucky Utilities Company, a public utility subsidiary of LKE engaged in the regulated generation, transmission, distribution and sale of electricity, primarily in Kentucky.  The subsidiary was acquired by PPL through the acquisition of LKE in November 2010.

LG&E - Louisville Gas and Electric Company, a public utility subsidiary of LKE engaged in the regulated generation, transmission, distribution and sale of electricity and the distribution and sale of natural gas in Kentucky.  The subsidiary was acquired by PPL through the acquisition of LKE in November 2010.

LG&E and KU Services Company - LG&E and KU Services Company (formerly E.ON U.S. Services Inc.), a subsidiary of LKE that provides services for LKE and its subsidiaries.

LKE - LG&E and KU Energy LLC (formerly E.ON U.S. LLC), a subsidiary of PPL and the parent of LG&E, KU, and other subsidiaries.  PPL acquired E.ON U.S. LLC in November 2010 and changed the name to LG&E and KU Energy LLC.  Within the context of this document, references to LKE also relate to the consolidated entity.

PPL - PPL Corporation, the parent holding company of PPL Electric, PPL Energy Funding, LKE and other subsidiaries.

PPL Capital Funding - PPL Capital Funding, Inc., a wholly owned financing subsidiary of PPL.

PPL Electric - PPL Electric Utilities Corporation, a public utility subsidiary of PPL that transmits and distributes electricity in its Pennsylvania service territory and provides electric supply to retail customers in this territory as a PLR.

PPL Energy Funding - PPL Energy Funding Corporation, a subsidiary of PPL and the parent holding company of PPL Energy Supply, PPL Global (effective January 2011) and other subsidiaries.

PPL EnergyPlus - PPL EnergyPlus, LLC, a subsidiary of PPL Energy Supply that markets and trades wholesale and retail electricity and gas, and supplies energy and energy services in competitive markets.

PPL Energy Supply - PPL Energy Supply, LLC, a subsidiary of PPL Energy Funding and the parent company of PPL Generation, PPL EnergyPlus and other subsidiaries.  In January 2011, PPL Energy Supply distributed its membership interest in PPL Global, representing 100% of the outstanding membership interests of PPL Global, to PPL Energy Supply's parent, PPL Energy Funding.

PPL Gas Utilities - PPL Gas Utilities Corporation, which was a regulated utility subsidiary of PPL until its sale in October 2008, provided natural gas distribution, transmission and storage services, and the competitive sale of propane.

PPL Generation - PPL Generation, LLC, a subsidiary of PPL Energy Supply that owns and operates U.S. generating facilities through various subsidiaries.

PPL Global - PPL Global, LLC, a subsidiary of PPL Energy Funding that primarily owns and operates a business in the U.K., WPD, that is focused on the regulated distribution of electricity.  In January 2011, PPL Energy Supply, PPL Global's former parent, distributed its membership interest in PPL Global, representing 100% of the outstanding membership interest of PPL Global, to its parent, PPL Energy Funding.

PPL Martins Creek - PPL Martins Creek, LLC, a subsidiary of PPL Generation that owns generating operations in Pennsylvania.

PPL Montana - PPL Montana, LLC, an indirect subsidiary of PPL Generation that generates electricity for wholesale sales in Montana and the Pacific Northwest.

 
i
 


PPL Services - PPL Services Corporation, a subsidiary of PPL that provides services for PPL and its subsidiaries.

PPL Susquehanna - PPL Susquehanna, LLC, the nuclear generating subsidiary of PPL Generation.

PPL WEM - PPL WEM Holdings plc (formerly WPD Investment Holdings Limited), an indirect, wholly owned U.K. subsidiary of PPL Global.  PPL WEM directly wholly owns WPD (East Midlands) and indirectly wholly owns WPD (West Midlands).

PPL WW - PPL WW Holdings Limited (formerly Western Power Distribution Holdings Limited), an indirect, wholly owned U.K. subsidiary of PPL Global.  PPL WW Holdings indirectly wholly owns WPD (South Wales) and WPD (South West).

WPD - refers to PPL WW and PPL WEM and their subsidiaries.

WPD Midlands - refers to Central Networks, which was renamed after the acquisition.

WPD (East Midlands) - Western Power Distribution (East Midlands) plc, a British regional electricity distribution utility company.  The company, formerly Central Networks East plc, was acquired and renamed in April 2011.

WPD (South Wales) - Western Power Distribution (South Wales) plc, a British regional electricity distribution utility company.

WPD (South West) - Western Power Distribution (South West) plc, a British regional electricity distribution utility company.

WPD (West Midlands) - Western Power Distribution (West Midlands) plc, a British regional electricity distribution utility company.  The company, formerly Central Networks West plc, was acquired and renamed in April 2011.

WKE - Western Kentucky Energy Corp., a subsidiary of LKE that leased certain non-utility generating stations in western Kentucky until July 2009.

Other terms and abbreviations

£ - British pounds sterling.

2001 Mortgage Indenture - PPL Electric's Indenture, dated as of August 1, 2001, to The Bank of New York Mellon (as successor to JPMorgan Chase Bank), as trustee, as supplemented.

2010 Bridge Facility - an up to $6.5 billion Senior Bridge Term Loan Credit Agreement between PPL Capital Funding, as borrower, and PPL, as guarantor, and a group of banks syndicated in June 2010, to serve as a funding backstop in the event alternative financing was not available prior to the closing of PPL's acquisition of E.ON U.S.

2010 Equity Unit(s) - a PPL equity unit, issued in June 2010, consisting of a 2010 Purchase Contract and, initially, a 5.0% undivided beneficial ownership interest in $1,000 principal amount of PPL Capital Funding 4.625% Junior Subordinated Notes due 2018.

2010 Form 10-K - Annual Report to the SEC on Form 10-K for the year ended December 31, 2010.

2010 Purchase Contract(s) - a contract that is a component of a 2010 Equity Unit that requires holders to purchase shares of PPL common stock on or prior to July 1, 2013.

2011 Bridge Facility - the £3.6 billion Senior Bridge Term Loan Credit Agreement between PPL Capital Funding and PPL WEM, as borrowers, and PPL, as guarantor, and lenders party thereto, used to fund the April 1, 2011 acquisition of Central Networks, as amended by Amendment No. 1 thereto dated April 15, 2011.

2011 Equity Unit(s) - a PPL equity unit, issued in April 2011, consisting of a 2011 Purchase Contract and, initially, a 5.0% undivided beneficial ownership interest in $1,000 principal amount of PPL Capital Funding 4.32% Junior Subordinated Notes due 2019.

 
ii
 


2011 Purchase Contract(s) - a contract that is a component of a 2011 Equity Unit that requires holders to purchase shares of PPL common stock on or prior to May 1, 2014.

2011 Registration Statements - refers to the registration statements on Form S-4 filed with the SEC by each of LKE (Registration No. 333-173665) on April 21, 2011, LG&E (Registration No 333-173676) on April 22, 2011 and KU (Registration No. 333-173675) on April 22, 2011, each as amended by Amendment No. 1 filed with the SEC on May 26, 2011 and effective June 1, 2011.

Acid Rain Program - allowance trading system established by the Clean Air Act to reduce levels of sulfur dioxide.  Under this program, affected power plants are allocated allowances based on their fuel consumption during specified baseline years and a specific emissions rate.

Act 129 - became effective in October 2008.  The law amends the Pennsylvania Public Utility Code and creates an energy efficiency and conservation program and smart metering technology requirements, adopts new PLR electricity supply procurement rules, provides remedies for market misconduct and makes changes to the existing Alternative Energy Portfolio Standard.

AFUDC - Allowance for Funds Used During Construction, the cost of equity and debt funds used to finance construction projects of regulated businesses, which is capitalized as part of construction cost.

A.M. Best - A.M. Best Company, a company that reports on the financial condition of insurance companies.

AOCI - accumulated other comprehensive income or loss.

ARO - asset retirement obligation.

Baseload generation - includes the output provided by PPL's nuclear, coal, hydroelectric and qualifying facilities.

Basis - when used in the context of derivatives and commodity trading, the commodity price differential between two locations, products or time periods.

Bcf - billion cubic feet.

CAIR - the EPA's Clean Air Interstate Rule.

Clean Air Act - federal legislation enacted to address certain environmental issues related to air emissions, including acid rain, ozone and toxic air emissions.

COLA - license application for a combined construction permit and operating license from the NRC for a nuclear plant.

CSAPR - Cross State Air Pollution Rule, the CSAPR implements Clean Air Act requirements concerning the transport of air pollution from power plants across state boundaries.  The CSAPR replaces the 2005 Clean Air Interstate Rule (CAIR), which the U.S. Court of Appeals for the D.C. Circuit ordered the EPA to revise in 2008.  The court allowed CAIR to remain in place temporarily while the EPA worked to finalize the replacement rule.

Customer Choice Act - the Pennsylvania Electricity Generation Customer Choice and Competition Act, legislation enacted to restructure the state's electric utility industry to create retail access to a competitive market for generation of electricity.

Depreciation not normalized - the flow-through income tax impact related to the state regulatory treatment of depreciation-related timing differences.

Dodd-Frank Act - the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law in July 2010.

DOE - Department of Energy, a U.S. government agency.

DRIP - Dividend Reinvestment and Direct Stock Purchase Plan.

 
iii
 


DSM - Demand Side Management.  Pursuant to Kentucky Revised Statute 278.285, the Kentucky Public Service Commission may determine the reasonableness of demand-side management plans proposed by any utility under its jurisdiction.  Proposed demand-side management mechanisms may seek full recovery of demand-side management programs and revenues lost by implementing those programs and/or incentives designed to provide financial rewards to the utility for implementing cost-effective demand-side management programs.  The cost of such programs shall be assigned only to the class or classes of customers which benefit from the programs.

E.ON AG - a German corporation and the parent of E.ON UK plc, the former parent of Central Networks.

Economic Stimulus Package - The American Recovery and Reinvestment Act of 2009, generally referred to as the federal economic stimulus package, which was signed into law in February 2009.

ECR - Environmental Cost Recovery.  Pursuant to Kentucky Revised Statute 278.183, effective January 1993, Kentucky electric utilities are entitled to the current recovery of costs of complying with the Clean Air Act, as amended, and those federal, state or local environmental requirements which apply to coal combustion and by-products from the production of energy from coal.

EMF - electric and magnetic fields.

EPA - Environmental Protection Agency, a U.S. government agency.

EPS - earnings per share.

Equity Units - refers collectively to the 2011 and 2010 Equity Units.

ESOP - Employee Stock Ownership Plan.

Euro - the basic monetary unit among participating members of the European Union.

E. W. Brown - a generating station in Kentucky with capacity of 1,631 MW.  LG&E and KU are participants in a sale-leaseback transaction involving two combustion turbines at the station.

FERC - Federal Energy Regulatory Commission, the federal agency that regulates, among other things, interstate transmission and wholesale sales of electricity, hydroelectric power projects and related matters.

Fitch - Fitch, Inc., a credit rating agency.

FTR - financial transmission rights, which are financial instruments established to manage price risk related to electricity transmission congestion.  They entitle the holder to receive compensation or require the holder to remit payment for certain congestion-related transmission charges based on the level of congestion in the transmission grid.

Fundamental Change - as it relates to the terms of the 2011 and 2010 Equity Units, will be deemed to have occurred if any of the following occurs with respect to PPL, subject to certain exceptions:  (i) a change of control; (ii) a consolidation with or merger into any other entity; (iii) common stock ceases to be listed or quoted; or (iv) a liquidation, dissolution or termination.

GAAP - generally accepted accounting principles in the U.S.

GBP - British pound sterling.

GHG - greenhouse gas(es).

GWh - gigawatt-hour, one million kilowatt-hours.

Health Care Reform - The Patient Protection and Affordable Care Act (HR 3590) and the Health Care and Education Reconciliation Act of 2010 (HR 4872), signed into law in March 2010.

Intermediate and peaking generation - includes the output provided by PPL's oil- and natural gas-fired units.

 
iv
 


IRS - Internal Revenue Service, a U.S. government agency.

ISO - Independent System Operator.

KPSC - Kentucky Public Service Commission, the state agency that has jurisdiction over the regulation of rates and service of utilities in Kentucky.

LIBOR - London Interbank Offered Rate.

Long Island generation business - includes a 79.9 MW gas-fired plant in the Edgewood section of Brentwood, New York and a 79.9 MW oil-fired plant in Shoreham, New York and related tolling agreements.  This business was sold in February 2010.

MACT - maximum achievable control technology.

MISO - Midwest Independent System Operator, an independent system operator and the regional transmission organization that provides open-access transmission service and monitors the high-voltage transmission system in all or parts of Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Montana, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin and Manitoba, Canada.

Montana Power - The Montana Power Company, a Montana-based company that sold its generating assets to PPL Montana in December 1999.  Through a series of transactions consummated during the first quarter of 2002, Montana Power sold its electricity delivery business to NorthWestern.

Moody's - Moody's Investors Service, Inc., a credit rating agency.

MW - megawatt, one thousand kilowatts.

NDT - PPL Susquehanna's nuclear plant decommissioning trust.

NERC - North American Electric Reliability Corporation.

NorthWestern - NorthWestern Corporation, a Delaware corporation, and successor in interest to Montana Power's electricity delivery business, including Montana Power's rights and obligations under contracts with PPL Montana.

NPDES - National Pollutant Discharge Elimination System.

NPNS - the normal purchases and normal sales exception as permitted by derivative accounting rules.

NRC - Nuclear Regulatory Commission, the federal agency that regulates nuclear power facilities.

OCI - other comprehensive income or loss.

Ofgem - Office of Gas and Electricity Markets, the British agency that regulates transmission, distribution and wholesale sales of electricity and related matters.

Opacity - The degree to which emissions reduce the transmission of light and obscure the view of an object in the background.  There are emission regulations that limit the opacity in power plant stack gas emissions.

OVEC - Ohio Valley Electric Corporation, located in Piketon, Ohio, an entity in which LKE indirectly owns an 8.13% interest (consists of LG&E's 5.63% and KU's 2.50% interests), which is accounted for as a cost-method investment.  OVEC owns and operates two coal-fired power plants, the Kyger Creek Station in Ohio and the Clifty Creek Station in Indiana, with combined nameplate capacities of 2,390 MW.

PADEP - the Pennsylvania Department of Environmental Protection, a state government agency.

PJM - PJM Interconnection, L.L.C., operator of the electric transmission network and electric energy market in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

 
v
 


PLR - Provider of Last Resort, the role of PPL Electric in providing default electricity supply to retail customers within its delivery territory who have not chosen to select an alternative electricity supplier under the Customer Choice Act.

PP&E - property, plant and equipment.

PUC - Pennsylvania Public Utility Commission, the state agency that regulates certain ratemaking, services, accounting and operations of Pennsylvania utilities.

Purchase Contracts - refers collectively to the 2010 and 2011 Purchase Contracts.

PURTA - The Pennsylvania Public Utility Realty Tax Act.

RAV - regulatory asset value.  This term is also commonly known as RAB or regulatory asset base.

RECs - renewable energy credits.

Regional Transmission Expansion Plan - PJM conducts a long-range Regional Transmission Expansion Planning process that identifies what changes and additions to the grid are needed to ensure future needs are met for both the reliability and the economic performance of the grid.  Under PJM agreements, transmission owners are obligated to build transmission projects that are needed to maintain reliability standards and that are reviewed and approved by the PJM Board.

Regulation S-X - SEC regulation governing the form and content of and requirements for financial statements required to be filed pursuant to the federal securities laws.

RMC - Risk Management Committee.

S&P - Standard & Poor's Ratings Services, a credit rating agency.

Sarbanes-Oxley - Sarbanes-Oxley Act of 2002, which sets requirements for management's assessment of internal controls for financial reporting.  It also requires an independent auditor to make its own assessment.

SCR - selective catalytic reduction, a pollution control process for the removal of nitrogen oxide from exhaust gases.

Scrubber - an air pollution control device that can remove particulates and/or gases (such as sulfur dioxide) from exhaust gases.

SEC - the U.S. Securities and Exchange Commission, a U.S. government agency whose primary mission is to protect investors and maintain the integrity of the securities markets.

Securities Act of 1933 - the Securities Act of 1933, 15 U.S. Code, Sections 77a-77aa, as amended.

SIFMA Index - the Securities Industry and Financial Markets Association Municipal Swap Index.

Smart meter - an electric meter that utilizes smart metering technology.

Smart metering technology - technology that can measure, among other things, time of electricity consumption to permit offering rate incentives for usage during lower cost or demand intervals.  The use of this technology also strengthens network reliability.

SNCR - selective non-catalytic reduction, a pollution control process for the removal of nitrogen oxide from exhaust gases.

Superfund - federal environmental legislation that addresses remediation of contaminated sites; states also have similar statutes.

TC2 - Trimble County Unit 2, a coal-fired plant located in Kentucky with a capacity of 760 MW.  LKE indirectly owns a 75% interest (consists of LG&E's 14.25% and KU's 60.75% interests) in TC2, or 570 MW of the capacity.

Tolling agreement - agreement whereby the owner of an electric generating facility agrees to use that facility to convert fuel provided by a third-party into electricity for delivery back to the third-party.

 
vi
 


TRA - Tennessee Regulatory Authority, the state agency that has jurisdiction over the regulation of rates and service of utilities in Tennessee.

VaR - value-at-risk, a statistical model that attempts to estimate the value of potential loss over a given holding period under normal market conditions at a given confidence level.

VIE - variable interest entity.

Volumetric risk - the risk that the actual load volumes provided under full-requirement sales contracts could vary significantly from forecasted volumes.

VSCC - Virginia State Corporation Commission, the state agency that has jurisdiction over the regulation of Virginia corporations, including utilities.

VWAP - as it relates to the 2011 and 2010 Equity Units issued by PPL, the per share volume-weighted-average price as displayed under the heading Bloomberg VWAP on Bloomberg page "PPL <EQUITY> AQR" (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading on the relevant trading day until the scheduled close of trading on the relevant trading day (or if such volume-weighted-average price is unavailable, the market price of one share of PPL common stock on such trading day determined, using a volume-weighted-average method, by a nationally recognized independent investment banking firm retained for this purpose by PPL).

 
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viii
 

FORWARD-LOOKING INFORMATION

Statements contained in this Form 10-Q concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical fact are "forward-looking statements" within the meaning of the federal securities laws.  Although PPL, PPL Energy Supply, PPL Electric, LKE, LG&E and KU believe that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct.  Forward-looking statements are subject to many risks and uncertainties, and actual results may differ materially from the results discussed in forward-looking statements.  In addition to the specific factors discussed in "Item 1A. Risk Factors" in this Form 10-Q and each Registrant's 2010 Form 10-K (in the case of PPL, PPL Energy Supply and PPL Electric) or 2011 Registration Statements (in the case of LKE, LG&E and KU), and in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q report, the following are among the important factors that could cause actual results to differ materially from the forward-looking statements.

·
fuel supply cost and availability;
·
continuing ability to recover fuel costs and environmental expenditures in a timely manner at LG&E and KU, and natural gas supply costs at LG&E;
·
weather conditions affecting generation, customer energy use and operating costs;
·
operation, availability and operating costs of existing generation facilities;
·
the length of scheduled and unscheduled outages at our generating facilities;
·
transmission and distribution system conditions and operating costs;
·
potential expansion of alternative sources of electricity generation;
·
potential laws or regulations to reduce emissions of "greenhouse" gases or the physical effects of climate change;
·
collective labor bargaining negotiations;
·
the outcome of litigation against PPL and its subsidiaries;
·
potential effects of threatened or actual terrorism, war or other hostilities, or natural disasters;
·
the commitments and liabilities of PPL and its subsidiaries;
·
market demand and prices for energy, capacity, transmission services, emission allowances, RECs and delivered fuel;
·
competition in retail and wholesale power and natural gas markets;
·
liquidity of wholesale power markets;
·
defaults by counterparties under energy, fuel or other power product contracts;
·
market prices of commodity inputs for ongoing capital expenditures;
·
capital market conditions, including the availability of capital or credit, changes in interest rates and certain economic indices, and decisions regarding capital structure;
·
stock price performance of PPL;
·
volatility in the fair value of debt and equity securities and its impact on the value of assets in the NDT funds and in defined benefit plans, and the potential cash funding requirements if fair value declines;
·
interest rates and their effect on pension, retiree medical, and nuclear decommissioning liabilities, and interest payable on certain debt securities;
·
volatility in or the impact of other changes in financial or commodity markets and economic conditions;
·
the profitability and liquidity, including access to capital markets and credit facilities, of PPL and its subsidiaries;
·
new accounting requirements or new interpretations or applications of existing requirements;
·
changes in securities and credit ratings;
·
foreign currency exchange rates;
·
current and future environmental conditions, regulations and other requirements and the related costs of compliance, including environmental capital expenditures, emission allowance costs and other expenses;
·
legal, regulatory, political, market or other reactions to the 2011 incident at the nuclear generating facility at Fukushima, Japan, including additional NRC requirements;
·
political, regulatory or economic conditions in states, regions or countries where PPL or its subsidiaries conduct business;
·
receipt of necessary governmental permits, approvals and rate relief;
·
new state, federal or foreign legislation, including new tax, environmental, healthcare or pension-related legislation;
·
state, federal and foreign regulatory developments;
·
the outcome of any rate cases by PPL Electric at the PUC or the FERC; by LG&E at the KPSC or the FERC; by KU at the KPSC, VSCC, TRA or the FERC; or by WPD at Ofgem in the U.K.;
·
the impact of any state, federal or foreign investigations applicable to PPL and its subsidiaries and the energy industry;
·
the effect of any business or industry restructuring;
·
development of new projects, markets and technologies;
·
performance of new ventures; and

 
1
 


·
business dispositions or acquisitions and our ability to successfully operate such acquired businesses and realize expected benefits from business acquisitions, including PPL's 2011 acquisition of WPD Midlands and 2010 acquisition of LKE.

Any such forward-looking statements should be considered in light of such important factors and in conjunction with other documents of PPL, PPL Energy Supply, PPL Electric, LKE, LG&E and KU on file with the SEC.

New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for PPL, PPL Energy Supply, PPL Electric, LKE, LG&E or KU to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement.  Any forward-looking statement speaks only as of the date on which such statement is made, and PPL, PPL Energy Supply, PPL Electric, LKE, LG&E and KU undertake no obligation to update the information contained in such statement to reflect subsequent developments or information.

 
2
 





(THIS PAGE LEFT BLANK INTENTIONALLY.)

 
3
 

PART I.  FINANCIAL INFORMATION
ITEM 1. Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
PPL Corporation and Subsidiaries
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
(Millions of Dollars, except share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
June 30,
 
June 30,
 
 
 
 
 
2011 
 
2010 
 
 
2011 
 
 
2010 
Operating Revenues
 
 
 
 
 
 
 
 
 
 
 
Utility
 
$
 1,484 
 
$
 692 
 
$
 3,020 
 
$
 1,706 
 
Unregulated retail electric and gas
 
 
 181 
 
 
 101 
 
 
 328 
 
 
 205 
 
Wholesale energy marketing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized
 
 
 732 
 
 
 1,231 
 
 
 1,770 
 
 
 2,590 
 
 
Unrealized economic activity (Note 14)
 
 
 (44)
 
 
 (666)
 
 
 13 
 
 
 (242)
 
Net energy trading margins
 
 
 10 
 
 
 5 
 
 
 21 
 
 
 16 
 
Energy-related businesses
 
 
 126 
 
 
 110 
 
 
 247 
 
 
 204 
 
Total Operating Revenues
 
 
 2,489 
 
 
 1,473 
 
 
 5,399 
 
 
 4,479 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Operation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel
 
 
 414 
 
 
 258 
 
 
 889 
 
 
 488 
 
 
Energy purchases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Realized
 
 
 434 
 
 
 737 
 
 
 1,105 
 
 
 1,746 
 
 
 
Unrealized economic activity (Note 14)
 
 
 (109)
 
 
 (445)
 
 
 (127)
 
 
 118 
 
 
Other operation and maintenance
 
 
 723 
 
 
 419 
 
 
 1,306 
 
 
 863 
 
Depreciation
 
 
 237 
 
 
 125 
 
 
 445 
 
 
 249 
 
Taxes, other than income
 
 
 75 
 
 
 53 
 
 
 148 
 
 
 125 
 
Energy-related businesses
 
 
 120 
 
 
 100 
 
 
 233 
 
 
 188 
 
Total Operating Expenses
 
 
 1,894 
 
 
 1,247 
 
 
 3,999 
 
 
 3,777 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
 595 
 
 
 226 
 
 
 1,400 
 
 
 702 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense) - net
 
 
 (34)
 
 
 
 
 
 (39)
 
 
 8 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other-Than-Temporary Impairments
 
 
 
 
 
 3 
 
 
 1 
 
 
 3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
 
 264 
 
 
 131 
 
 
 438 
 
 
 242 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations Before Income Taxes
 
 
 297 
 
 
 92 
 
 
 922 
 
 
 465 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 96 
 
 
 7 
 
 
 319 
 
 
 133 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes
 
 
 201 
 
 
 85 
 
 
 603 
 
 
 332 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Discontinued Operations (net of income taxes)
 
 
 (1)
 
 
 7 
 
 
 2 
 
 
 15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
 
 
 200 
 
 
 92 
 
 
 605 
 
 
 347 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Noncontrolling Interests
 
 
 4 
 
 
 7 
 
 
 8 
 
 
 12 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to PPL Corporation
 
$
 196 
 
$
 85 
 
$
 597 
 
$
 335 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts Attributable to PPL Corporation:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes
 
$
 197 
 
$
 78 
 
$
 595 
 
$
 320 
 
Income (Loss) from Discontinued Operations (net of income taxes)
 
 
 (1)
 
 
 7 
 
 
 2 
 
 
 15 
 
Net Income
 
$
 196 
 
$
 85 
 
$
 597 
 
$
 335 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share of Common Stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes Available
 
 
 
 
 
 
 
 
 
 
 
 
 
  to PPL Corporation Common Shareowners:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
 0.35 
 
$
 0.20 
 
$
1.13 
 
$
0.84 
 
 
Diluted
 
$
 0.35 
 
$
 0.20 
 
$
1.13 
 
$
0.84 
 
Net Income Available to PPL Corporation Common Shareowners:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
 0.35 
 
$
 0.22 
 
$
1.14 
 
$
0.88 
 
 
Diluted
 
$
 0.35 
 
$
 0.22 
 
$
1.14 
 
$
0.88 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends Declared Per Share of Common Stock
 
$
 0.350 
 
$
 0.350 
 
$
0.700 
 
$
0.700 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Shares of Common Stock Outstanding (in
   thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 561,652 
 
 
 381,896 
 
 
522,897 
 
 
379,810 
 
 
Diluted
 
 
 562,019 
 
 
 382,075 
 
 
523,184 
 
 
380,034 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying Notes to Condensed Financial Statements are an integral part of the financial statements.

 
4
 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
 
 
 
2011 
 
2010 
Cash Flows from Operating Activities
 
 
 
 
 
 
 
Net income
 
$
 605 
 
$
 347 
 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
 
 
Depreciation
 
 
 446 
 
 
 258 
 
 
Amortization
 
 
 126 
 
 
 87 
 
 
Defined benefit plans - expense
 
 
 71 
 
 
 51 
 
 
Deferred income taxes and investment tax credits
 
 
 337 
 
 
 (63)
 
 
Unrealized (gains) losses on derivatives, and other hedging activities
 
 
 (165)
 
 
 344 
 
 
Provision for Montana hydroelectric litigation
 
 
 7 
 
 
 59 
 
 
Other
 
 
 60 
 
 
 51 
 
Change in current assets and current liabilities
 
 
 
 
 
 
 
 
Accounts receivable
 
 
 (36)
 
 
 (45)
 
 
Accounts payable
 
 
 (60)
 
 
 79 
 
 
Unbilled revenue
 
 
 194 
 
 
 (114)
 
 
Prepayments
 
 
 111 
 
 
 (156)
 
 
Counterparty collateral
 
 
 (258)
 
 
 98 
 
 
Taxes
 
 
 (63)
 
 
 (15)
 
 
Other
 
 
 27 
 
 
 (93)
 
Other operating activities
 
 
 
 
 
 
 
 
Defined benefit plans - funding
 
 
 (550)
 
 
 (345)
 
 
Other assets
 
 
 (42)
 
 
 9 
 
 
Other liabilities
 
 
 4 
 
 
 20 
 
 
 
Net cash provided by operating activities
 
 
 814 
 
 
 572 
Cash Flows from Investing Activities
 
 
 
 
 
 
 
Expenditures for property, plant and equipment
 
 
 (1,003)
 
 
 (624)
 
Proceeds from the sale of certain non-core generation facilities
 
 
 381 
 
 
 
 
Proceeds from the sale of the Long Island generation business
 
 
 
 
 
 124 
 
Acquisition of WPD Midlands
 
 
 (5,763)
 
 
 
 
Purchases of nuclear plant decommissioning trust investments
 
 
 (107)
 
 
 (75)
 
Proceeds from the sale of nuclear plant decommissioning trust investments
 
 
 100 
 
 
 68 
 
Proceeds from the sale of other investments
 
 
 163 
 
 
 
 
Net (increase) decrease in restricted cash and cash equivalents
 
 
 (22)
 
 
 80 
 
Other investing activities
 
 
 (48)
 
 
 (31)
 
 
 
Net cash provided by (used in) investing activities
 
 
 (6,299)
 
 
 (458)
Cash Flows from Financing Activities
 
 
 
 
 
 
 
Issuance of long-term debt
 
 
 4,350 
 
 
 1,747 
 
Issuance of common stock
 
 
 2,266 
 
 
 2,410 
 
Payment of common stock dividends
 
 
 (340)
 
 
 (263)
 
Redemption of preferred stock of a subsidiary
 
 
 
 
 
 (54)
 
Debt issuance and credit facility costs
 
 
 (72)
 
 
 (76)
 
Net increase (decrease) in short-term debt
 
 
 (321)
 
 
 (158)
 
Other financing activities
 
 
 (36)
 
 
 (11)
 
 
 
Net cash provided by (used in) financing activities
 
 
 5,847 
 
 
 3,595 
Effect of Exchange Rates on Cash and Cash Equivalents
 
 
 (18)
 
 
 (5)
Net Increase (Decrease) in Cash and Cash Equivalents
 
 
 344 
 
 
 3,704 
Cash and Cash Equivalents at Beginning of Period
 
 
 925 
 
 
 801 
Cash and Cash Equivalents at End of Period
 
$
 1,269 
 
$
 4,505 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying Notes to Condensed Financial Statements are an integral part of the financial statements.

 
5
 

CONDENSED CONSOLIDATED BALANCE SHEETS
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars, shares in thousands)
 
 
 
 
 
June 30,
 
December 31,
 
 
 
 
 
2011 
 
2010 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
 1,269 
 
$
 925 
 
Short-term investments
 
 
 
 
 
 163 
 
Restricted cash and cash equivalents
 
 
 43 
 
 
 28 
 
Accounts receivable (less reserve:  2011, $39; 2010, $55)
 
 
 
 
 
 
 
 
Customer
 
 
 712 
 
 
 652 
 
 
Other
 
 
 72 
 
 
 90 
 
Unbilled revenues
 
 
 708 
 
 
 789 
 
Fuel, materials and supplies
 
 
 647 
 
 
 643 
 
Prepayments
 
 
 344 
 
 
 435 
 
Price risk management assets
 
 
 1,467 
 
 
 1,918 
 
Other intangibles
 
 
 42 
 
 
 70 
 
Assets held for sale
 
 
 
 
 
 374 
 
Regulatory assets
 
 
 25 
 
 
 85 
 
Other current assets
 
 
 35 
 
 
 16 
 
Total Current Assets
 
 
 5,364 
 
 
 6,188 
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
Nuclear plant decommissioning trust funds
 
 
 648 
 
 
 618 
 
Other investments
 
 
 78 
 
 
 75 
 
Total Investments
 
 
 726 
 
 
 693 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
 
 
Regulated utility plant
 
 
 22,572 
 
 
 15,994 
 
Less:  accumulated depreciation - regulated utility plant
 
 
 3,290 
 
 
 3,037 
 
 
Regulated utility plant, net
 
 
 19,282 
 
 
 12,957 
 
Non-regulated property, plant and equipment
 
 
 
 
 
 
 
 
Generation
 
 
 10,366 
 
 
 10,165 
 
 
Nuclear fuel
 
 
 575 
 
 
 578 
 
 
Other
 
 
 505 
 
 
 403 
 
Less:  accumulated depreciation - non-regulated property, plant and equipment
 
 
 5,535 
 
 
 5,440 
 
 
Non-regulated property, plant and equipment, net
 
 
 5,911 
 
 
 5,706 
 
Construction work in progress
 
 
 1,415 
 
 
 2,160 
 
Property, Plant and Equipment, net (a)
 
 
 26,608 
 
 
 20,823 
Other Noncurrent Assets
 
 
 
 
 
 
 
Regulatory assets
 
 
 1,200 
 
 
 1,180 
 
Goodwill (Note 15)
 
 
 4,190 
 
 
 1,761 
 
Other intangibles (a)
 
 
 1,078 
 
 
 966 
 
Price risk management assets
 
 
 665 
 
 
 655 
 
Other noncurrent assets
 
 
 706 
 
 
 571 
 
Total Other Noncurrent Assets
 
 
 7,839 
 
 
 5,133 
 
 
 
 
 
 
 
Total Assets
 
$
 40,537 
 
$
 32,837 

(a)
At June 30, 2011 and December 31, 2010, includes $418 million and $424 million of PP&E, consisting primarily of "Generation," including leasehold improvements, and $11 million of "Other intangibles" from the consolidation of a VIE that is the owner/lessor of the Lower Mt. Bethel plant.   

The accompanying Notes to Condensed Financial Statements are an integral part of the financial statements.

 
6
 


CONDENSED CONSOLIDATED BALANCE SHEETS
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars, shares in thousands)
 
 
 
 
 
June 30,
 
December 31,
 
 
 
 
 
2011 
 
2010 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
Short-term debt
 
$
 431 
 
$
 694 
 
Long-term debt
 
 
 502 
 
 
 502 
 
Accounts payable
 
 
 1,246 
 
 
 1,028 
 
Taxes
 
 
 110 
 
 
 134 
 
Interest
 
 
 175 
 
 
 166 
 
Dividends
 
 
 207 
 
 
 174 
 
Price risk management liabilities
 
 
 817 
 
 
 1,144 
 
Counterparty collateral
 
 
 80 
 
 
 338 
 
Regulatory liabilities
 
 
 77 
 
 
 109 
 
Other current liabilities
 
 
 948 
 
 
 925 
 
Total Current Liabilities
 
 
 4,593 
 
 
 5,214 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
 
 
 17,532 
 
 
 12,161 
 
 
 
 
 
 
 
 
 
 
Deferred Credits and Other Noncurrent Liabilities
 
 
 
 
 
 
 
Deferred income taxes
 
 
 3,434 
 
 
 2,563 
 
Investment tax credits
 
 
 262 
 
 
 237 
 
Price risk management liabilities
 
 
 443 
 
 
 470 
 
Accrued pension obligations
 
 
 1,015 
 
 
 1,496 
 
Asset retirement obligations
 
 
 491 
 
 
 435 
 
Regulatory liabilities
 
 
 1,023 
 
 
 1,031 
 
Other deferred credits and noncurrent liabilities
 
 
 825 
 
 
 752 
 
Total Deferred Credits and Other Noncurrent Liabilities
 
 
 7,493 
 
 
 6,984 
 
 
 
 
 
 
 
 
 
 
Commitments and Contingent Liabilities (Notes 6 and 10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
PPL Corporation Shareowners' Common Equity
 
 
 
 
 
 
 
 
Common stock - $0.01 par value (a)
 
 
 6 
 
 
 5 
 
 
Additional paid-in capital
 
 
 6,774 
 
 
 4,602 
 
 
Earnings reinvested
 
 
 4,306 
 
 
 4,082 
 
 
Accumulated other comprehensive loss
 
 
 (435)
 
 
 (479)
 
 
Total PPL Corporation Shareowners' Common Equity
 
 
 10,651 
 
 
 8,210 
 
Noncontrolling Interests
 
 
 268 
 
 
 268 
 
Total Equity
 
 
 10,919 
 
 
 8,478 
 
 
 
 
 
 
 
 
 
 
Total Liabilities and Equity
 
$
 40,537 
 
$
 32,837 

(a)
780,000 shares authorized; 577,265 and 483,391 shares issued and outstanding at June 30, 2011 and December 31, 2010.

The accompanying Notes to Condensed Financial Statements are an integral part of the financial statements.

 
7
 

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars)
 
 
 
 
PPL Corporation Shareowners
 
 
 
 
 
 
 
 
 
 
Common
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 stock
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
 
 
shares
 
 
 
 
 
Additional
 
 
 
 
 
other
 
 
Non-
 
 
 
 
 
 
 
outstanding
 
 
Common
 
 
paid-in
 
 
Earnings
 
 
comprehensive
 
 
controlling
 
 
 
 
 
 
 
(a)
 
 
stock
 
 
capital
 
 
reinvested
 
 
loss
 
 
interests
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2011
 
484,618 
 
$
 5 
 
$
 4,637 
 
$
 4,312 
 
$
 (424)
 
$
 268 
 
$
 8,798 
Common stock issued (b)
 
 92,647 
 
 
 1 
 
 
 2,273 
 
 
 
 
 
 
 
 
 
 
 
 2,274 
Purchase Contracts (c)
 
 
 
 
 
 
 
 (141)
 
 
 
 
 
 
 
 
 
 
 
 (141)
Stock-based compensation
 
 
 
 
 
 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 5 
Net income
 
 
 
 
 
 
 
 
 
 
 196 
 
 
 
 
 
 4 
 
 
 200 
Dividends, dividend equivalents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and distributions (d)
 
 
 
 
 
 
 
 
 
 
 (202)
 
 
 
 
 
 (4)
 
 
 (206)
Other comprehensive
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 (11)
 
 
 
 
 
 (11)
June 30, 2011
 
 577,265 
 
$
 6 
 
$
 6,774 
 
$
 4,306 
 
$
 (435)
 
$
 268 
 
$
 10,919 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2010
 
483,391 
 
$
5 
 
$
4,602 
 
$
4,082 
 
$
 (479)
 
$
268 
 
$
 8,478 
Common stock issued (b)
 
 93,874 
 
 
 1 
 
 
 2,312 
 
 
 
 
 
 
 
 
 
 
 
 2,313 
Purchase Contracts (c)
 
 
 
 
 
 
 
 (141)
 
 
 
 
 
 
 
 
 
 
 
 (141)
Stock-based compensation
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 1 
Net income
 
 
 
 
 
 
 
 
 
 
 597 
 
 
 
 
 
 8 
 
 
 605 
Dividends, dividend equivalents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and distributions (d)
 
 
 
 
 
 
 
 
 
 
 (373)
 
 
 
 
 
 (8)
 
 
 (381)
Other comprehensive
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 44 
 
 
 
 
 
 44 
June 30, 2011
 
 577,265 
 
$
 6 
 
$
 6,774 
 
$
 4,306 
 
$
 (435)
 
$
 268 
 
$
 10,919 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2010
 
378,131 
 
$
4 
 
$
2,310 
 
$
3,866 
 
$
 (288)
 
$
319 
 
$
 6,211 
Common stock issued (b)
 
 104,057 
 
 
1 
 
 
2,425 
 
 
 
 
 
 
 
 
 
 
 
 2,426 
Purchase Contracts (c)
 
 
 
 
 
 
 
 (186)
 
 
 
 
 
 
 
 
 
 
 
 (186)
Stock-based compensation
 
 
 
 
 
 
 
 4 
 
 
 
 
 
 
 
 
 
 
 
 4 
Net income
 
 
 
 
 
 
 
 
 
 
 85 
 
 
 
 
 
 7 
 
 
 92 
Dividends, dividend equivalents,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
redemptions and distributions (d)
 
 
 
 
 
 
 
 
 
 
 (133)
 
 
 
 
 
 (58)
 
 
 (191)
Other comprehensive
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 (151)
 
 
 
 
 
 (151)
June 30, 2010
 
 482,188 
 
$
 5 
 
$
 4,553 
 
$
 3,818 
 
$
 (439)
 
$
 268 
 
$
 8,205 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2009
 
377,183 
 
$
4 
 
$
2,280 
 
$
3,749 
 
$
 (537)
 
$
319 
 
$
 5,815 
Common stock issued (b)
 
 105,005 
 
 
1 
 
 
2,458 
 
 
 
 
 
 
 
 
 
 
 
 2,459 
Purchase Contracts (c)
 
 
 
 
 
 
 
 (186)
 
 
 
 
 
 
 
 
 
 
 
 (186)
Stock-based compensation
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 1 
Net income
 
 
 
 
 
 
 
 
 
 
 335 
 
 
 
 
 
 12 
 
 
 347 
Dividends, dividend equivalents,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
redemptions and distributions (d)
 
 
 
 
 
 
 
 
 
 
 (266)
 
 
 
 
 
 (63)