Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 10-Q
 
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal quarterly period ended March 31, 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
     

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        
 

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        
No        
 
 
PPL Electric Utilities Corporation
Yes        
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 ]
[     ]





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   
 

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, 577,151,364 shares outstanding at April 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 April 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.
 
 
 
PPL CORPORATION
PPL ENERGY SUPPLY, LLC
PPL ELECTRIC UTILITIES CORPORATION

FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 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
 
 
Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
   
   
21
 
   
21
 
   
22
 
   
23
 
   
24
 
   
26
 
   
27
 
   
31
 
   
33
 
   
34
 
   
52
 
   
53
 
   
54
 
   
60
 
   
70
 
   
70
 
   
71
 
   
72
 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
   
     
74
 
     
95
 
     
105
 
 
110
 
 
110
 
PART II.  OTHER INFORMATION
   
 
111
 
 
111
 
 
113
 
116
 
117
 
   
120
 
   
126
 
 
 
 

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.

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.

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 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 in November 2010.

LKE   - LG&E and KU Energy LLC (formerly E.ON U.S. LLC), a subsidiary of PPL and the parent of LG&E and KU.  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 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, a regulated utility that provided natural gas distribution, transmission and storage services, and the competitive sale of propane, which was a subsidiary of PPL until its sale in October 2008.

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.

PPL Services - PPL Services Corporation, a subsidiary of PPL that provides shared 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 Holdings - 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 Holdings and its 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.

2010 Equity Unit - a PPL equity unit, issued in June 2010, consisting of a 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 Purchase Contract - 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.

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

2011 Equity Unit - a PPL equity unit, issued in April 2011, consisting of a 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.

2011 Purchase Contract - 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.

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.

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.

CAIR - t he 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.

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.

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

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.

ECR - Environmental Cost Recovery.  Pursuant to Kentucky Revised Statutes 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.

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

E.ON US Investments - E.ON US Investments Corp., a Delaware corporation and the former parent of E.ON U.S. LLC.  PPL acquired E.ON U.S. LLC in November 2010 and changed its name to LG&E and KU Energy LLC.

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.

EMF - electric and magnetic fields.

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

EPS - earnings per share.

ESOP - Employee Stock Ownership Plan.

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

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.

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.

NUGs - non-utility generators, generating plants not owned by public utilities, whose electrical output must be purchased by utilities under the PURPA if the plant meets certain criteria.

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.

OVEC -   Ohio Valley Electric Corporation, located in Piketon, Ohio, an entity in which LKE indirectly owns an 8.13% interest, 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.  LKE is contractually entitled to 8.13% of the generation capacity and output.

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.

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.

PURPA -   Public Utility Regulatory Policies Act of 1978, legislation passed by the U.S. Congress to encourage energy conservation, efficient use of resources and equitable rates.

PURTA -   The Pennsylvania Public Utility Realty Tax Act.

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

RECs - renewable energy credits.

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

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 owns a 75% interest 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.

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).
 
 
 
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 and PPL Electric 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 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 and natural gas supply costs and environmental expenditures in a timely manner at LG&E and KU;
·
weather conditions affecting generation, customer energy use and operating costs;
·
operation, availability and operating costs of existing generation facilities;
·
the length of the scheduled and unscheduled outages at our plants, including the current outage at Unit 2 of our Susquehanna nuclear plant to inspect and repair turbine blades, and the timing and outcome of any similar outage for inspections at Unit 1 of the Susquehanna plant;
·
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, certain economic indices and decisions regarding capital structure;
·
stock price performance of PPL;
·
the fair value of debt and equity securities and the impact on defined benefit costs and resultant cash funding requirements for defined benefit plans;
·
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;
·
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 FERC, by LG&E or KU at the KPSC, FERC, VSCC or the TRA, 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
·
business dispositions or acquisitions and our ability to successfully operate such acquired businesses and realize expected benefits including PPL's 2011 acquisition of Central Networks 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 and PPL Electric 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 or PPL Electric 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 and PPL Electric undertake no obligation to update the information contained in such statement to reflect subsequent developments or information.
 
 
 
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 March 31,
 
 
 
 
 
2011 
 
2010 
Operating Revenues
 
 
 
 
 
Utility
 
$
 1,536 
 
$
 1,014 
 
Unregulated retail electric and gas
 
 
 147 
 
 
 104 
 
Wholesale energy marketing
 
 
 
 
 
 
 
 
Realized
 
 
 1,038 
 
 
 1,359 
 
 
Unrealized economic activity (Note 14)
 
 
 57 
 
 
 424 
 
Net energy trading margins
 
 
 11 
 
 
 11 
 
Energy-related businesses
 
 
 121 
 
 
 94 
 
Total Operating Revenues
 
 
 2,910 
 
 
 3,006 
 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
 
Operation
 
 
 
 
 
 
 
 
Fuel
 
 
 475 
 
 
 230 
 
 
Energy purchases
 
 
 
 
 
 
 
 
 
Realized
 
 
 671 
 
 
 1,009 
 
 
 
Unrealized economic activity (Note 14)
 
 
 (18)
 
 
 563 
 
 
Other operation and maintenance
 
 
 583 
 
 
 444 
 
Depreciation
 
 
 208 
 
 
 124 
 
Taxes, other than income
 
 
 73 
 
 
 72 
 
Energy-related businesses
 
 
 113 
 
 
 88 
 
Total Operating Expenses
 
 
 2,105 
 
 
 2,530 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
 805 
 
 
 476 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense) - net
 
 
 (5)
 
 
 8 
 
 
 
 
 
 
 
Other-Than-Temporary Impairments
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
 
 174 
 
 
 111 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations Before Income Taxes
 
 
 625 
 
 
 373 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 223 
 
 
 126 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes
 
 
 402 
 
 
 247 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Discontinued Operations (net of income taxes)
 
 
 3 
 
 
 8 
 
 
 
 
 
 
 
 
 
 
Net Income
 
 
 405 
 
 
 255 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Noncontrolling Interests
 
 
 4 
 
 
 5 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to PPL Corporation
 
$
 401 
 
$
 250 
 
 
 
 
 
 
 
 
 
 
Amounts Attributable to PPL Corporation:
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes
 
$
 398 
 
$
 242 
 
Income (Loss) from Discontinued Operations (net of income taxes)
 
 
 3 
 
 
 8 
 
Net Income
 
$
 401 
 
$
 250 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share of Common Stock:
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes Available to PPL
 
 
 
 
 
 
 
 Corporation Common Shareowners:
 
 
 
 
 
 
 
 
Basic
 
$
 0.82 
 
$
 0.64 
 
 
Diluted
 
$
 0.82 
 
$
 0.64 
 
Net Income Available to PPL Corporation Common Shareowners:
 
 
 
 
 
 
 
 
Basic
 
$
 0.82 
 
$
 0.66 
 
 
Diluted
 
$
 0.82 
 
$
 0.66 
 
 
 
 
 
 
 
 
 
 
Dividends Declared Per Share of Common Stock
 
$
 0.350 
 
$
 0.350 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Shares of Common Stock Outstanding (in thousands)
 
 
 
 
 
 
 
 
Basic
 
 
 484,138 
 
 
 377,717 
 
 
Diluted
 
 
 484,345 
 
 
 377,986 
 
 
 
 
 
 
 
 
 
 
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements.
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
 
 
 
2011 
 
2010 
Cash Flows from Operating Activities
 
 
 
 
 
 
 
Net income
 
$
 405 
 
$
 255 
 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
 
 
Depreciation
 
 
 208 
 
 
 128 
 
 
Amortization
 
 
 47 
 
 
 33 
 
 
Defined benefit plans - expense
 
 
 39 
 
 
 27 
 
 
Defined benefit plans - funding
 
 
 (438)
 
 
 (142)
 
 
Deferred income taxes and investment tax credits
 
 
 204 
 
 
 (5)
 
 
Unrealized (gains) losses on derivatives, and other hedging activities
 
 
 (96)
 
 
 107 
 
 
Provision for Montana hydroelectric litigation
 
 
 3 
 
 
 56 
 
 
Other
 
 
 7 
 
 
 23 
 
Change in current assets and current liabilities
 
 
 
 
 
 
 
 
Accounts receivable
 
 
 (57)
 
 
 (101)
 
 
Accounts payable
 
 
 (112)
 
 
 178 
 
 
Unbilled revenue
 
 
 199 
 
 
 (176)
 
 
Prepayments
 
 
 (85)
 
 
 (94)
 
 
Counterparty collateral
 
 
 (195)
 
 
 351 
 
 
Taxes
 
 
 10 
 
 
 80 
 
 
Other
 
 
 50 
 
 
 61 
 
Other operating activities
 
 
 
 
 
 
 
 
Other assets
 
 
 (4)
 
 
 (4)
 
 
Other liabilities
 
 
 11 
 
 
 21 
 
 
 
Net cash provided by operating activities
 
 
 196 
 
 
 798 
Cash Flows from Investing Activities
 
 
 
 
 
 
 
Expenditures for property, plant and equipment
 
 
 (428)
 
 
 (283)
 
Proceeds from the sale of certain non-core generation facilities
 
 
 381 
 
 
 
 
Proceeds from the sale of the Long Island generation business
 
 
 
 
 
 124 
 
Purchases of nuclear plant decommissioning trust investments
 
 
 (79)
 
 
 (49)
 
Proceeds from the sale of nuclear plant decommissioning trust investments
 
 
 75 
 
 
 44 
 
Proceeds from the sale of other investments
 
 
 163 
 
 
 
 
Net (increase) decrease in restricted cash and cash equivalents
 
 
 (7)
 
 
 (130)
 
Other investing activities
 
 
 (7)
 
 
 (16)
 
 
 
Net cash provided by (used in) investing activities
 
 
 98 
 
 
 (310)
Cash Flows from Financing Activities
 
 
 
 
 
 
 
Issuance of long-term debt
 
 
 
 
 
 597 
 
Issuance of common stock
 
 
 16 
 
 
 14 
 
Payment of common stock dividends
 
 
 (170)
 
 
 (131)
 
Net increase (decrease) in short-term debt
 
 
 187 
 
 
 (36)
 
Other financing activities
 
 
 (20)
 
 
 (14)
 
 
 
Net cash provided by (used in) financing activities
 
 
 13 
 
 
 430 
Effect of Exchange Rates on Cash and Cash Equivalents
 
 
 13 
 
 
 5 
Net Increase (Decrease) in Cash and Cash Equivalents
 
 
 320 
 
 
 923 
Cash and Cash Equivalents at Beginning of Period
 
 
 925 
 
 
 801 
Cash and Cash Equivalents at End of Period
 
$
 1,245 
 
$
 1,724 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements.
 
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars, shares in thousands)
 
 
March 31,
 
December 31,
 
 
2011 
 
2010 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
 1,245 
 
$
 925 
 
Short-term investments
 
 
 
 
 
 163 
 
Restricted cash and cash equivalents
 
 
 33 
 
 
 28 
 
Accounts receivable (less reserve:  2011, $56; 2010, $55)
 
 
 
 
 
 
 
 
Customer
 
 
 734 
 
 
 652 
 
 
Other
 
 
 68 
 
 
 90 
 
Unbilled revenues
 
 
 593 
 
 
 789 
 
Fuel, materials and supplies
 
 
 621 
 
 
 643 
 
Prepayments
 
 
 523 
 
 
 435 
 
Price risk management assets
 
 
 1,785 
 
 
 1,918 
 
Other intangibles
 
 
 55 
 
 
 70 
 
Assets held for sale
 
 
 
 
 
 374 
 
Regulatory assets
 
 
 35 
 
 
 85 
 
Other current assets
 
 
 55 
 
 
 16 
 
Total Current Assets
 
 
 5,747 
 
 
 6,188 
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
Nuclear plant decommissioning trust funds
 
 
 644 
 
 
 618 
 
Other investments
 
 
 76 
 
 
 75 
 
Total Investments
 
 
 720 
 
 
 693 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment
 
 
 
 
 
 
 
Regulated utility plant - electric and gas
 
 
 17,235 
 
 
 15,994 
 
Less:  accumulated depreciation - regulated utility plant
 
 
 3,105 
 
 
 3,002 
 
 
Regulated utility plant - electric and gas, net
 
 
 14,130 
 
 
 12,992 
 
Non-regulated property, plant and equipment
 
 
 
 
 
 
 
 
Generation
 
 
 10,188 
 
 
 10,165 
 
 
Nuclear fuel
 
 
 595 
 
 
 578 
 
 
Other
 
 
 488 
 
 
 403 
 
Less:  accumulated depreciation - non-regulated property, plant and equipment
 
 
 5,550 
 
 
 5,440 
 
 
Non-regulated property, plant and equipment, net
 
 
 5,721 
 
 
 5,706 
 
Construction work in progress
 
 
 1,331 
 
 
 2,160 
 
Property, Plant and Equipment, net (a)
 
 
 21,182 
 
 
 20,858 
Other Noncurrent Assets
 
 
 
 
 
 
 
Regulatory assets
 
 
 1,154 
 
 
 1,145 
 
Goodwill
 
 
 1,792 
 
 
 1,761 
 
Other intangibles (a)
 
 
 963 
 
 
 966 
 
Price risk management assets
 
 
 600 
 
 
 655 
 
Other noncurrent assets
 
 
 583 
 
 
 571 
 
Total Other Noncurrent Assets
 
 
 5,092 
 
 
 5,098 
 
 
 
 
 
 
 
Total Assets
 
$
 32,741 
 
$
 32,837 

(a)
At March 31, 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 Consolidated Financial Statements are an integral part of the financial statements.
 
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars, shares in thousands)
 
 
March 31,
 
December 31,
 
 
2011 
 
2010 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
Short-term debt
 
$
 881 
 
$
 694 
 
Long-term debt
 
 
 502 
 
 
 502 
 
Accounts payable
 
 
 941 
 
 
 1,028 
 
Taxes
 
 
 140 
 
 
 134 
 
Interest
 
 
 224 
 
 
 166 
 
Dividends
 
 
 174 
 
 
 174 
 
Price risk management liabilities
 
 
 1,010 
 
 
 1,144 
 
Counterparty collateral
 
 
 143 
 
 
 338 
 
Regulatory liabilities
 
 
 79 
 
 
 109 
 
Other current liabilities
 
 
 808 
 
 
 925 
 
Total Current Liabilities
 
 
 4,902 
 
 
 5,214 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
 
 
 12,247 
 
 
 12,161 
 
 
 
 
 
 
 
 
 
 
Deferred Credits and Other Noncurrent Liabilities
 
 
 
 
 
 
 
Deferred income taxes
 
 
 2,839 
 
 
 2,563 
 
Investment tax credits
 
 
 251 
 
 
 237 
 
Price risk management liabilities
 
 
 397 
 
 
 470 
 
Accrued pension obligations
 
 
 1,094 
 
 
 1,496 
 
Asset retirement obligations
 
 
 442 
 
 
 435 
 
Regulatory liabilities
 
 
 1,032 
 
 
 1,031 
 
Other deferred credits and noncurrent liabilities
 
 
 739 
 
 
 752 
 
Total Deferred Credits and Other Noncurrent Liabilities
 
 
 6,794 
 
 
 6,984 
 
 
 
 
 
 
 
 
 
 
Commitments and Contingent Liabilities (Note 10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
PPL Corporation Shareowners' Common Equity
 
 
 
 
 
 
 
 
Common stock - $0.01 par value (a)
 
 
 5 
 
 
 5 
 
 
Capital in excess of par value
 
 
 4,637 
 
 
 4,602 
 
 
Earnings reinvested
 
 
 4,312 
 
 
 4,082 
 
 
Accumulated other comprehensive loss
 
 
 (424)
 
 
 (479)
 
 
Total PPL Corporation Shareowners' Common Equity
 
 
 8,530 
 
 
 8,210 
 
Noncontrolling Interests
 
 
 268 
 
 
 268 
 
Total Equity
 
 
 8,798 
 
 
 8,478 
 
 
 
 
 
 
 
 
 
 
Total Liabilities and Equity
 
$
 32,741 
 
$
 32,837 

(a)
780,000 shares authorized; 484,618 and 483,391 shares issued and outstanding at March 31, 2011 and December 31, 2010.

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements.
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars)
 
 
 
 
 
PPL Corporation Shareowners
 
 
 
 
 
 
 
 
 
 
Common
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 stock
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
 
 
shares
 
 
 
 
 
Capital in
 
 
 
 
 
other
 
 
Non-
 
 
 
 
 
 
 
outstanding
 
 
Common
 
 
excess of
 
 
Earnings
 
 
comprehensive
 
 
controlling
 
 
 
 
 
 
 
(a)
 
 
stock
 
 
par value
 
 
reinvested
 
 
loss
 
 
interests
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2010
 
483,391 
 
$
 5 
 
$
 4,602 
 
$
 4,082 
 
$
 (479)
 
$
 268 
 
$
 8,478 
Common stock issued (b)
 
 1,227 
 
 
 
 
 
 40 
 
 
 
 
 
 
 
 
 
 
 
 40 
Stock-based compensation
 
 
 
 
 
 
 
 (5)
 
 
 
 
 
 
 
 
 
 
 
 (5)
Net income
 
 
 
 
 
 
 
 
 
 
 401 
 
 
 
 
 
 4 
 
 
 405 
Dividends, dividend equivalents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      and distributions (c)
 
 
 
 
 
 
 
 
 
 
 (171)
 
 
 
 
 
 (4)
 
 
 (175)
Other comprehensive
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 55 
 
 
 
 
 
 55 
March 31, 2011
 
 484,618 
 
$
 5 
 
$
 4,637 
 
$
 4,312 
 
$
 (424)
 
$
 268 
 
$
 8,798 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2009
 
377,183 
 
$
4 
 
$
2,280 
 
$
3,749 
 
$
 (537)
 
$
319 
 
$
 5,815 
Common stock issued (b)
 
 948 
 
 
 
 
 
33 
 
 
 
 
 
 
 
 
 
 
 
 33 
Stock-based compensation
 
 
 
 
 
 
 
 (3)
 
 
 
 
 
 
 
 
 
 
 
 (3)
Net income
 
 
 
 
 
 
 
 
 
 
 250 
 
 
 
 
 
 5 
 
 
 255 
Dividends, dividend equivalents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      and distributions (c)
 
 
 
 
 
 
 
 
 
 
 (133)
 
 
 
 
 
 (5)
 
 
 (138)
Other comprehensive
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 249 
 
 
 
 
 
 249 
March 31, 2010
 
 378,131 
 
$
 4 
 
$
 2,310 
 
$
 3,866 
 
$
 (288)
 
$
 319 
 
$
 6,211 

(a)
Shares in thousands.  Each share entitles the holder to one vote on any question presented to any shareowners' meeting.
(b)
Each period includes shares of common stock issued through various stock and incentive compensation plans.
(c)
"Earnings reinvested" includes dividends and dividend equivalents on PPL Corporation common stock and restricted stock units.  "Noncontrolling interests" includes dividends and distributions to noncontrolling interests.

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements.
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
PPL Corporation and Subsidiaries
(Unaudited)
(Millions of Dollars)
 
 
 
 
Three Months Ended March 31,
 
 
 
 
2011 
 
2010 
 
 
 
 
 
 
 
 
 
Net income
 
$
 405 
 
$
 255 
 
 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
Amounts arising during the period - gains (losses), net of tax (expense) benefit:
 
 
 
 
 
 
 
Foreign currency translation adjustments, net of tax of $1, ($1)
 
 
 67 
 
 
 (93)
 
Available-for-sale securities, net of tax of ($12), ($11)
 
 
 12 
 
 
 10 
 
Qualifying derivatives, net of tax of ($32), ($262)
 
 
 37 
 
 
 377 
 
Equity investees' other comprehensive income (loss), net of tax of $0, $0
 
 
 (1)
 
 
 
Reclassifications to net income - (gains) losses, net of tax expense (benefit):
 
 
 
 
 
 
 
Available-for-sale securities, net of tax of $5, $2
 
 
 (7)
 
 
 (2)
 
Qualifying derivatives, net of tax of $51, $37
 
 
 (69)
 
 
 (60)
 
Equity investees' other comprehensive (income) loss, net of tax of $0, $0
 
 
 2 
 
 
 
 
Defined benefit plans:
 
 
 
 
 
 
 
 
Prior service costs, net of tax of ($2), ($3)
 
 
 3 
 
 
 2 
 
 
Net actuarial loss, net of tax of ($4), $0
 
 
 11 
 
 
 14 
 
 
Transition obligation, net of tax of $0, $0
 
 
 
 
 
 1 
Total other comprehensive income (loss) attributable to PPL Corporation
 
 
 55 
 
 
 249 
 
 
 
 
 
 
 
 
 
Comprehensive income (loss)
 
 
 460 
 
 
 504 
 
Comprehensive income attributable to noncontrolling interests
 
 
 4 
 
 
 5 
 
 
 
 
 
 
 
 
 
Comprehensive income (loss) attributable to PPL Corporation
 
$
 456 
 
$
 499 
 
 
 
 
 
 
 
 
 
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements.
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
PPL Energy Supply, LLC and Subsidiaries
(Unaudited)
 
 
 
 
 
 
(Millions of Dollars)
 
 
 
 
 
Three Months Ended March 31,
 
 
 
 
 
2011 
 
2010 
Operating Revenues
 
 
 
 
 
 
 
Wholesale energy marketing
 
 
 
 
 
 
 
 
Realized
 
$
 1,038 
 
$
 1,359 
 
 
Unrealized economic activity (Note 14)
 
 
 57 
 
 
 424 
 
Wholesale energy marketing to affiliate
 
 
 6 
 
 
 115 
 
Unregulated retail electric and gas
 
 
 147 
 
 
 104 
 
Net energy trading margins
 
 
 11 
 
 
 11 
 
Energy-related businesses
 
 
 110 
 
 
 81 
 
Total Operating Revenues
 
 
 1,369 
 
 
 2,094 
 
 
 
 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
 
Operation
 
 
 
 
 
 
 
 
Fuel
 
 
 260 
 
 
 230 
 
 
Energy purchases
 
 
 
 
 
 
 
 
 
Realized
 
 
 314 
 
 
 600 
 
 
 
Unrealized economic activity (Note 14)
 
 
 (18)
 
 
 563 
 
 
Energy purchases from affiliate
 
 
 1 
 
 
 1 
 
 
Other operation and maintenance
 
 
 245 
 
 
 298 
 
Depreciation
 
 
 59 
 
 
 57 
 
Taxes, other than income
 
 
 16 
 
 
 11 
 
Energy-related businesses
 
 
 108 
 
 
 81 
 
Total Operating Expenses
 
 
 985 
 
 
 1,841 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
 384 
 
 
 253 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense) - net
 
 
 14 
 
 
 6 
 
 
 
 
 
 
 
 
 
 
Other-Than-Temporary Impairments
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Income from Affiliates
 
 
 3 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Expense
 
 
 47 
 
 
 53 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations Before Income Taxes
 
 
 353 
 
 
 206 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 142 
 
 
 82 
 
 
 
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes
 
 
 211 
 
 
 124 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Discontinued Operations (net of income taxes)
 
 
 3 
 
 
 76 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to PPL Energy Supply
 
$
 214 
 
$
 200 
 
 
 
 
 
 
 
 
 
 
Amounts Attributable to PPL Energy Supply:
 
 
 
 
 
 
 
Income from Continuing Operations After Income Taxes
 
$
 211 
 
$
 124 
 
Income (Loss) from Discontinued Operations (net of income taxes)
 
 
 3 
 
 
 76 
 
Net Income
 
$
 214 
 
$
 200 
 
 
 
 
 
 
 
 
 
 
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements.
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
PPL Energy Supply, LLC and Subsidiaries
(Unaudited)
(Millions of Dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
 
 
 
2011 
 
2010 
Cash Flows from Operating Activities
 
 
 
 
 
 
 
Net income
 
$
 214 
 
$