| 20. Goodwill and Other Intangible Assets | |||||||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||||||
| (PPL) | |||||||||||||||||||||||||||
| The changes in the carrying amount of goodwill by segment were: | |||||||||||||||||||||||||||
| U.K. Regulated | Kentucky Regulated | Supply | Total | ||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||
| PPL | |||||||||||||||||||||||||||
| Balance at beginning of period (a) | $ | 3,076 | $ | 3,032 | $ | 662 | $ | 662 | $ | 420 | $ | 420 | $ | 4,158 | $ | 4,114 | |||||||||||
| Changes during the period (b) | 67 | 44 | 67 | 44 | |||||||||||||||||||||||
| Balance at end of period (a) | $ | 3,143 | $ | 3,076 | $ | 662 | $ | 662 | $ | 420 | $ | 420 | $ | 4,225 | $ | 4,158 | |||||||||||
(a) There were no accumulated impairment losses related to goodwill.
(b) Primarily the effect of foreign currency exchange rates.
| Other Intangible Assets | ||||||||||||||
| (PPL) | ||||||||||||||
| The gross carrying amount and the accumulated amortization of other intangible assets were: | ||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||
| Gross | Gross | |||||||||||||
| Carrying | Accumulated | Carrying | Accumulated | |||||||||||
| Amount | Amortization | Amount | Amortization | |||||||||||
| Subject to amortization: | ||||||||||||||
| Contracts (a) | $ | 408 | $ | 202 | $ | 408 | $ | 150 | ||||||
| Land and transmission rights | 331 | 117 | 284 | 113 | ||||||||||
| Emission allowances/RECs (b) | 16 | 17 | ||||||||||||
| Licenses and other (c) | 305 | 45 | 287 | 39 | ||||||||||
| Total subject to amortization | 1,060 | 364 | 996 | 302 | ||||||||||
| Not subject to amortization due to indefinite life: | ||||||||||||||
| Land and transmission rights | 16 | 18 | ||||||||||||
| Easements (d) | 239 | 220 | ||||||||||||
| Total not subject to amortization due to indefinite life | 255 | 238 | ||||||||||||
| Total | $ | 1,315 | $ | 364 | $ | 1,234 | $ | 302 | ||||||
(a) Gross carrying amount includes the fair value at the acquisition date of coal contracts with terms favorable to market recognized as a result of the 2010 acquisition of LKE by PPL. An offsetting regulatory liability was recorded related to these contracts, which is being amortized over the same period as the intangible assets, eliminating any income statement impact. This is referred to as "regulatory offset" in the tables below. See Note 6 for additional information.
(b) Emission allowances/RECs are expensed when consumed or sold; therefore, there is no accumulated amortization.
(c) "Other" includes costs for the development of licenses, the most significant of which is the COLA. Amortization of these costs begins when the related asset is placed in service. See Note 8 for additional information on the COLA.
(d) Gross carrying amount includes $88 million, which represents the fair value at the acquisition date of easements recognized as a result of the 2011 acquisition of WPD Midlands. See Note 10 for additional information.
Current intangible assets are included in "Other current assets" and long-term intangible assets are included in "Other intangibles" on the Balance Sheets.
Amortization expense for the years ended December 31, excluding consumption of emission allowances/RECs of $23 million, $12 million, and $16 million in 2013, 2012 and 2011, was as follows:
| 2013 | 2012 | 2011 | |||||||
| Intangible assets with no regulatory offset | $ | 10 | $ | 14 | $ | 25 | |||
| Intangible assets with regulatory offset | 51 | 47 | 87 | ||||||
| Total | $ | 61 | $ | 61 | $ | 112 |
| Amortization expense for each of the next five years, excluding insignificant amounts for consumption of emission allowances/RECs, is estimated to be: | |||||||||||||||
| 2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||
| Intangible assets with no regulatory offset | $ | 10 | $ | 10 | $ | 8 | $ | 8 | $ | 8 | |||||
| Intangible assets with regulatory offset | 48 | 50 | 27 | 9 | 9 | ||||||||||
| Total | $ | 58 | $ | 60 | $ | 35 | $ | 17 | $ | 17 | |||||
| (PPL Energy Supply) | ||||||||||||||
| The gross carrying amount and the accumulated amortization of other intangible assets were: | ||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||
| Gross | Gross | |||||||||||||
| Carrying | Accumulated | Carrying | Accumulated | |||||||||||
| Amount | Amortization | Amount | Amortization | |||||||||||
| Subject to amortization: | ||||||||||||||
| Land and transmission rights | $ | 17 | $ | 14 | $ | 17 | $ | 13 | ||||||
| Emission allowances/RECs (a) | 11 | 13 | ||||||||||||
| Licenses and other (b) | 295 | 39 | 277 | 35 | ||||||||||
| Total subject to amortization | $ | 323 | $ | 53 | $ | 307 | $ | 48 | ||||||
(a) Emission allowances/RECs are expensed when consumed or sold; therefore, there is no accumulated amortization.
(b) "Other" includes costs for the development of licenses, the most significant of which is the COLA. Amortization of these costs begins when the related asset is placed in service. See Note 8 for additional information on the COLA.
Current intangible assets are included in "Other current assets" and long-term intangible assets are presented as "Other intangibles" on the Balance Sheets.
Amortization expense for the years ended December 31, excluding consumption of emission allowances/RECs of $23 million, $12 million, and $16 million in 2013, 2012, and 2011 was as follows:
| 2013 | 2012 | 2011 | |||||||
| Amortization expense | $ | 5 | $ | 9 | $ | 20 |
| Amortization expense and consumption of emission allowances/RECs is expected to be insignificant in future years. |
| (PPL Electric) | ||||||||||||||
| The gross carrying amount and the accumulated amortization of other intangible assets were: | ||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||
| Gross | Gross | |||||||||||||
| Carrying | Accumulated | Carrying | Accumulated | |||||||||||
| Amount | Amortization | Amount | Amortization | |||||||||||
| Subject to amortization: | ||||||||||||||
| Land and transmission rights | $ | 293 | $ | 102 | $ | 249 | $ | 99 | ||||||
| Licenses and other | 5 | 1 | 4 | 1 | ||||||||||
| Total subject to amortization | 298 | 103 | 253 | 100 | ||||||||||
| Not subject to amortization due to indefinite life: | ||||||||||||||
| Land and transmission rights | 16 | 18 | ||||||||||||
| Total | $ | 314 | $ | 103 | $ | 271 | $ | 100 | ||||||
Intangible assets are shown as "Intangibles" on the Balance Sheets.
Amortization expense was insignificant in 2013, 2012 and 2011 and is expected to be insignificant in future years.
| (LKE) | ||||||||||||||
| The gross carrying amount and the accumulated amortization of other intangible assets were: | ||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||
| Gross | Gross | |||||||||||||
| Carrying | Accumulated | Carrying | Accumulated | |||||||||||
| Amount | Amortization | Amount | Amortization | |||||||||||
| Subject to amortization: | ||||||||||||||
| Coal contracts (a) | $ | 269 | $ | 171 | $ | 269 | $ | 128 | ||||||
| Land and transmission rights | 20 | 2 | 18 | 1 | ||||||||||
| Emission allowances (b) | 4 | 4 | ||||||||||||
| OVEC power purchase agreement (c) | 126 | 25 | 126 | 17 | ||||||||||
| Total subject to amortization | $ | 419 | $ | 198 | $ | 417 | $ | 146 | ||||||
(a) Gross carrying amount represents the fair value at the acquisition date of coal contracts with terms favorable to market recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability was recorded related to these contracts, which is being amortized over the same period as the intangible assets, eliminating any income statement impact. See Note 6 for additional information.
(b) Represents the fair value at the acquisition date of emission allowances recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability is recorded related to these emission allowances, which is being amortized as the emission allowances are consumed, eliminating any income statement impact. Consumption related to these emission allowances was insignificant in 2013 and in 2012.
(c) Gross carrying amount represents the fair value at the acquisition date of the OVEC power purchase contract recognized as a result of the 2010 acquisition by PPL. See Note 6 for additional information.
Current intangible assets are included in "Other current assets" on the Balance Sheets. Long-term intangible assets are presented as "Other intangibles" on the Balance Sheets.
| Amortization expense, excluding consumption of emission allowances, was as follows: | |||||||||
| 2013 | 2012 | 2011 | |||||||
| Intangible assets with no regulatory offset | $ | 1 | $ | 1 | |||||
| Intangible assets with regulatory offset | 51 | $ | 47 | 87 | |||||
| Total | $ | 52 | $ | 47 | $ | 88 | |||
| Amortization expense for each of the next five years, excluding consumption of emission allowances, is estimated to be: | |||||||||||||||
| 2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||
| Intangible assets with regulatory offset | $ | 48 | $ | 50 | $ | 27 | $ | 9 | $ | 9 | |||||
| (LG&E) | ||||||||||||||
| The gross carrying amount and the accumulated amortization of other intangible assets were: | ||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||
| Gross | Gross | |||||||||||||
| Carrying | Accumulated | Carrying | Accumulated | |||||||||||
| Amount | Amortization | Amount | Amortization | |||||||||||
| Subject to amortization: | ||||||||||||||
| Coal contracts (a) | $ | 124 | $ | 81 | $ | 124 | $ | 62 | ||||||
| Land and transmission rights | 7 | 1 | 8 | 1 | ||||||||||
| Emission allowances (b) | 1 | 1 | ||||||||||||
| OVEC power purchase agreement (c) | 87 | 17 | 87 | 13 | ||||||||||
| Total subject to amortization | $ | 219 | $ | 99 | $ | 220 | $ | 76 | ||||||
(a) Gross carrying amount represents the fair value at the acquisition date of coal contracts with terms favorable to market recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability was recorded related to these contracts, which is being amortized over the same period as the intangible assets, eliminating any income statement impact. See Note 6 for additional information.
(b) Represents the fair value at the acquisition date of emission allowances recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability is recorded related to these emission allowances, which is being amortized as the emission allowances are consumed, eliminating any income statement impact. Consumption related to these emission allowances was insignificant in 2013 and in 2012.
(c) Gross carrying amount represents the fair value at the acquisition date of the OVEC power purchase contract recognized as a result of the 2010 acquisition by PPL. See Note 6 for additional information.
Current intangible assets are included in "Other current assets" on the Balance Sheets. Long-term intangible assets are presented as "Other intangibles" on the Balance Sheets.
| Amortization expense, excluding consumption of emission allowances, was as follows: | |||||||||
| 2013 | 2012 | 2011 | |||||||
| Intangible assets with no regulatory offset | $ | 1 | |||||||
| Intangible assets with regulatory offset | $ | 23 | $ | 23 | 45 | ||||
| Total | $ | 23 | $ | 23 | $ | 46 | |||
| Amortization expense for each of the next five years, excluding consumption of emission allowances, is estimated to be: | |||||||||||||||
| 2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||
| Intangible assets with regulatory offset | $ | 23 | $ | 24 | $ | 13 | $ | 6 | $ | 6 | |||||
| (KU) | ||||||||||||||
| The gross carrying amount and the accumulated amortization of other intangible assets were: | ||||||||||||||
| December 31, 2013 | December 31, 2012 | |||||||||||||
| Gross | Gross | |||||||||||||
| Carrying | Accumulated | Carrying | Accumulated | |||||||||||
| Amount | Amortization | Amount | Amortization | |||||||||||
| Subject to amortization: | ||||||||||||||
| Coal contracts (a) | $ | 145 | $ | 90 | $ | 145 | $ | 66 | ||||||
| Land and transmission rights | 13 | 1 | 10 | |||||||||||
| Emission allowances (b) | 3 | 3 | ||||||||||||
| OVEC power purchase agreement (c) | 39 | 8 | 39 | 4 | ||||||||||
| Total subject to amortization | $ | 200 | $ | 99 | $ | 197 | $ | 70 | ||||||
(a) Gross carrying amount represents the fair value at the acquisition date of coal contracts with terms favorable to market recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability was recorded related to these contracts, which is being amortized over the same period as the intangible assets, eliminating any income statement impact. See Note 6 for additional information.
(b) Represents the fair value at the acquisition date of emission allowances recognized as a result of the 2010 acquisition by PPL. An offsetting regulatory liability is recorded related to these emission allowances, which is being amortized as the emission allowances are consumed, eliminating any income statement impact. Consumption related to these emission allowances was insignificant in 2013 and in 2012.
(c) Gross carrying amount represents the fair value at the acquisition date of the OVEC power purchase contract recognized as a result of the 2010 acquisition by PPL. See Note 6 for additional information.
Current intangible assets are included in "Other current assets" on the Balance Sheets. Long-term intangible assets are presented as "Other intangibles" on the Balance Sheets.
| Amortization expense, excluding consumption of emission allowances, was as follows: | |||||||||
| 2013 | 2012 | 2011 | |||||||
| Intangible assets with no regulatory offset | $ | 1 | |||||||
| Intangible assets with regulatory offset | 28 | $ | 24 | $ | 42 | ||||
| Amortization expense for each of the next five years, excluding consumption of emission allowances, is estimated to be: | |||||||||||||||
| 2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||
| Intangible assets with regulatory offset | $ | 24 | $ | 26 | $ | 13 | $ | 3 | $ | 3 | |||||