Exhibit 12(a) | ||||||||||||||||||||||
PPL CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND | ||||||||||||||||||||||
PREFERRED STOCK DIVIDENDS | ||||||||||||||||||||||
(Millions of Dollars) | ||||||||||||||||||||||
9 Months | ||||||||||||||||||||||
Ended | ||||||||||||||||||||||
Sep. 30, | Years Ended December 31, | |||||||||||||||||||||
2014 | 2013(a) | 2012(a) | 2011(a) | 2010(a) | 2009(a) | |||||||||||||||||
Earnings, as defined: | ||||||||||||||||||||||
Income from Continuing Operations Before | ||||||||||||||||||||||
Income Taxes (b) | $ | 1,552 | $ | 1,260 | $ | 2,009 | $ | 2,050 | $ | 1,218 | $ | 474 | ||||||||||
Adjustment to reflect earnings from equity method | ||||||||||||||||||||||
investments on a cash basis (c) | 34 | 1 | 7 | 1 | ||||||||||||||||||
1,552 | 1,260 | 2,043 | 2,051 | 1,225 | 475 | |||||||||||||||||
Total fixed charges as below | 821 | 1,096 | 1,065 | 1,022 | 698 | 513 | ||||||||||||||||
Less: | ||||||||||||||||||||||
Capitalized interest | 25 | 47 | 53 | 51 | 30 | 43 | ||||||||||||||||
Preferred security distributions of subsidiaries | ||||||||||||||||||||||
on a pre-tax basis | 5 | 23 | 21 | 24 | ||||||||||||||||||
Interest expense and fixed charges related to | ||||||||||||||||||||||
discontinued operations | 6 | 12 | 10 | 3 | 31 | 22 | ||||||||||||||||
Total fixed charges included in Income from | ||||||||||||||||||||||
Continuing Operations Before Income Taxes | 790 | 1,037 | 997 | 945 | 616 | 424 | ||||||||||||||||
Total earnings | $ | 2,342 | $ | 2,297 | $ | 3,040 | $ | 2,996 | $ | 1,841 | $ | 899 | ||||||||||
Fixed charges, as defined: | ||||||||||||||||||||||
Interest charges (d) | $ | 810 | $ | 1,058 | $ | 1,019 | $ | 955 | $ | 637 | $ | 446 | ||||||||||
Estimated interest component of operating rentals | 11 | 38 | 41 | 44 | 39 | 42 | ||||||||||||||||
Preferred security distributions of subsidiaries | ||||||||||||||||||||||
on a pre-tax basis | 5 | 23 | 21 | 24 | ||||||||||||||||||
Fixed charges of majority-owned share of 50% or | ||||||||||||||||||||||
less-owned persons | 1 | 1 | ||||||||||||||||||||
Total fixed charges (e) | $ | 821 | $ | 1,096 | $ | 1,065 | $ | 1,022 | $ | 698 | $ | 513 | ||||||||||
Ratio of earnings to fixed charges | 2.9 | 2.1 | 2.9 | 2.9 | 2.6 | 1.8 | ||||||||||||||||
Ratio of earnings to combined fixed charges and | ||||||||||||||||||||||
preferred stock dividends (f) | 2.9 | 2.1 | 2.9 | 2.9 | 2.6 | 1.8 |
(a) | Years 2009 through 2013 have been adjusted to reflect the reclassification of certain PPL Montana hydroelectric generating facilities and related assets as Discontinued Operations. See Note 8 to the Financial Statements for additional information. | |
(b) | To facilitate the sale of the hydroelectric generating facilities referred to in (a) above, 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's 2013 Form 10-K for additional information. | |
(c) | Includes other-than-temporary impairment loss of $25 million in 2012. | |
(d) | Includes interest on long-term and short-term debt, as well as amortization of debt discount, expense and premium - net. | |
(e) | Interest on unrecognized tax benefits is not included in fixed charges. | |
(f) | PPL, the parent holding company, does not have any preferred stock outstanding; therefore, the ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges. |
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