EX-12.B 12 form10q-exhibit12b.htm EXHIBIT 12(B) form10q-exhibit12b.htm
Exhibit 12(b)
PPL ENERGY SUPPLY, LLC AND SUBSIDIARIES
 
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions of Dollars)
 
 
 
 
 
 
 
6 Months
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30,
 
Years Ended December 31,
 
 
 
 
 
 
2014 
 
2013 
 
2012 
 
2011 
 
2010 
 
2009 
Earnings, as defined:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations Before
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes (a)
$
 (105)
 
$
 (371)
 
$
 738 
 
$
 1,212 
 
$
 881 
 
$
 (13)
 
 
Adjustments to reflect earnings from equity method
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
investments on a cash basis
 
   
 
 
   
 
 
   
 
 
 1 
 
 
 7 
 
 
 1 
 
 
 
 
 
 (105)
 
 
 (371)
 
 
 738 
 
 
 1,213 
 
 
 888 
 
 
 (12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges as below
 
 82 
 
 
 226 
 
 
 238 
 
 
 259 
 
 
 426 
 
 
 364 
 
 
 
 
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalized interest
 
 11 
 
 
 36 
 
 
 47 
 
 
 47 
 
 
 33 
 
 
 44 
 
 
 
 
Interest expense and fixed charges related to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
discontinued operations
 
   
 
 
   
 
 
   
 
 
 3 
 
 
 147 
 
 
 102 
 
 
Total fixed charges included in Income (Loss) from
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Continuing Operations Before Income Taxes
 
 71 
 
 
 190 
 
 
 191 
 
 
 209 
 
 
 246 
 
 
 218 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total earnings
$
 (34)
 
$
 (181)
 
$
 929 
 
$
 1,422 
 
$
 1,134 
 
$
 206 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges, as defined:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest charges (b)
$
 80 
 
$
 207 
 
$
 214 
 
$
 223 
 
$
 387 
 
$
 321 
 
 
Estimated interest component of operating rentals
 
 2 
 
 
 19 
 
 
 24 
 
 
 36 
 
 
 38 
 
 
 42 
 
 
Fixed charges of majority-owned share of 50% or
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
less-owned persons
 
   
 
 
   
 
 
   
 
 
   
 
 
 1 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges (c)
$
 82 
 
$
 226 
 
$
 238 
 
$
 259 
 
$
 426 
 
$
 364 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges (d)
 
 (0.4)
 
 
 (0.8)
 
 
 3.9 
 
 
 5.5 
 
 
 2.7 
 
 
 0.6 

(a)
  
In September 2013, PPL Montana executed a definitive agreement to sell certain hydroelectric generating facilities.  The sale is not expected to close before the fourth quarter of 2014.  To facilitate the sale, in December 2013, PPL Montana terminated a lease agreement which resulted in a $697 million charge.  See Note 8 to the Financial Statements in PPL Energy Supply's 2013 Form 10-K for additional information.
(b)
  
Includes interest on long-term and short-term debt, as well as amortization of debt discount, expense and premium - net.
(c)
  
Interest on unrecognized tax benefits is not included in fixed charges.
(d)
  
For the six months ended June 30, 2014, there was less than one-to-one coverage.  The amount of the deficiency, or the amount of fixed charges in excess of earnings, was $116 million.
 
2013 earnings were lower as a result of the PPL Montana lease termination referred to in (a) above, which resulted in less than one-to-one coverage.  The amount of the deficiency, or the amount of fixed charges in excess of earnings, was $407 million.
 
As a result of PPL Energy Supply's 2011 distribution of its interest in PPL Global to PPL Energy Funding and related reclassification of PPL Global's operating results as Discontinued Operations, earnings for 2009 were lower, which resulted in less than one-to-one coverage.  The amount of the deficiency, or the amount of fixed charges in excess of earnings, was $158 million.
 
144