PPL Corp
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
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5. Income Taxes
- Income Taxes
Reconciliations of income tax expense (benefit) for the periods ended June 30 are as follows.
| (PPL) | ||||
|---|---|---|---|---|
| Three Months | Six Months | |||
| 2024 | 2023 | 2024 | 2023 | |
| Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $50 | $30 | $132 | $107 |
| Increase (decrease) due to: | ||||
| State income taxes, net of federal income tax benefit | 11 | 11 | 28 | 33 |
| Valuation allowance adjustments | 2 | 5 | 5 | 7 |
| Utility rate-making tax adjustments (a) | (5) | (2) | (10) | (7) |
| Amortization of excess deferred federal and state income taxes | (7) | (8) | (20) | (20) |
| Other | (1) | (3) | (4) | (8) |
| Total increase (decrease) | — | 3 | (1) | 5 |
| Total income tax expense (benefit) | $50 | $33 | $131 | $112 |
(a) Primarily consists of tax impacts of AFUDC equity and related depreciation across PPL's regulated utility subsidiaries and flow through tax impacts of Pennsylvania utility ratemaking. Flow through occurs when the regulator excludes deferred tax expense or benefit from recoverable costs when determining income tax expense.
| (PPL Electric) | ||||
|---|---|---|---|---|
| Three Months | Six Months | |||
| 2024 | 2023 | 2024 | 2023 | |
| Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $41 | $31 | $83 | $70 |
| Increase (decrease) due to: | ||||
| State income taxes, net of federal income tax benefit | 13 | 11 | 26 | 24 |
| Utility rate-making tax adjustments (a) | (6) | (3) | (10) | (7) |
| Amortization of excess deferred federal and state income taxes | (3) | (2) | (5) | (4) |
| Other | 1 | 1 | — | — |
| Total increase (decrease) | 5 | 7 | 11 | 13 |
| Total income tax expense (benefit) | $46 | $38 | $94 | $83 |
(a) Primarily consists of tax impacts of AFUDC equity and related depreciation and flow through tax impacts of Pennsylvania utility ratemaking. Flow through occurs when the regulator excludes deferred tax expense or benefit from recoverable costs when determining income tax expense.
| (LG&E) | ||||
|---|---|---|---|---|
| Three Months | Six Months | |||
| 2024 | 2023 | 2024 | 2023 | |
| Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $17 | $12 | $41 | $35 |
| Increase (decrease) due to: | ||||
| State income taxes, net of federal income tax benefit | 3 | 2 | 7 | 6 |
| Amortization of excess deferred federal and state income taxes | (3) | (3) | (6) | (6) |
| Other | — | — | (1) | (1) |
| Total increase (decrease) | — | (1) | — | (1) |
| Total income tax expense (benefit) | $17 | $11 | $41 | $34 |
| (KU) | ||||
|---|---|---|---|---|
| Three Months | Six Months | |||
| 2024 | 2023 | 2024 | 2023 | |
| Federal income tax on Income Before Income Taxes at statutory tax rate - 21% | $20 | $13 | $48 | $36 |
| Increase (decrease) due to: | ||||
| State income taxes, net of federal income tax benefit | 4 | 3 | 9 | 7 |
| Amortization of excess deferred federal and state income taxes | (4) | (4) | (9) | (8) |
| Other | (1) | 1 | (2) | — |
| Total increase (decrease) | (1) | — | (2) | (1) |
| Total income tax expense (benefit) | $19 | $13 | $46 | $35 |
Other
IRS Revenue Procedure 2023-15(PPL and LG&E)
On April 14, 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting that taxpayers may use to determine whether expenses to repair, maintain, replace, or improve natural gas transmission and distribution property must be capitalized for tax purposes. PPL and LG&E are currently reviewing the revenue procedure to determine what impact the guidance may have on their financial statements.
Transfer of Certain Credits under the Inflation Reduction Act(PPL)
The IRS released the final Internal Revenue Code Section 6418 regulations related to the transfer of certain credits under the Inflation Reduction Act. The regulations became effective on July 1, 2024. PPL has reviewed the final regulations and does not anticipate a material impact to the financial statements regarding prior or future credit transfers.
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