2016 Q4 Form 10-K Financial Statement

#000092222418000023 Filed on February 22, 2018

View on sec.gov

Income Statement

Concept 2016 Q4 2016 Q3 2016 Q2
Revenue $1.832B $1.889B $1.785B
YoY Change 2.92% 0.59% 0.22%
Cost Of Revenue $175.0M $151.0M $147.0M
YoY Change -2.23% -14.69% -6.37%
Gross Profit $1.657B $1.738B $1.638B
YoY Change 3.5% 2.18% 0.86%
Gross Profit Margin 90.45% 92.01% 91.76%
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $260.0M $249.0M $250.0M
YoY Change 9.24% 1.63% 7.76%
% of Gross Profit 15.69% 14.33% 15.26%
Operating Expenses $943.0M $952.0M $913.0M
YoY Change -4.17% -6.21% -7.4%
Operating Profit $714.0M $786.0M $725.0M
YoY Change 15.72% 14.58% 13.64%
Interest Expense -$217.0M $223.0M $224.0M
YoY Change -3.98% 0.9% 4.19%
% of Operating Profit -30.39% 28.37% 30.9%
Other Income/Expense, Net $106.0M $49.00M $174.0M
YoY Change 125.53% -34.67% -270.59%
Pretax Income $603.0M $612.0M $675.0M
YoY Change 37.67% 13.33% 110.28%
Income Tax $138.0M $139.0M $192.0M
% Of Pretax Income 22.89% 22.71% 28.44%
Net Earnings $465.0M $473.0M $483.0M
YoY Change 16.54% 20.36% -163.8%
Net Earnings / Revenue 25.38% 25.04% 27.06%
Basic Earnings Per Share $0.68 $0.70 $0.71
Diluted Earnings Per Share $0.68 $0.69 $0.71
COMMON SHARES
Basic Shares Outstanding 679.6M shares 678.1M shares 677.1M shares
Diluted Shares Outstanding 680.3M shares 680.7M shares

Balance Sheet

Concept 2016 Q4 2016 Q3 2016 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $341.0M $416.0M $492.0M
YoY Change -59.21% -57.59% -41.84%
Cash & Equivalents $341.0M $416.0M $492.0M
Short-Term Investments
Other Short-Term Assets $52.00M $37.00M $43.00M
YoY Change -17.46% -79.56% -69.29%
Inventory $356.0M $346.0M $336.0M
Prepaid Expenses $63.00M $97.00M $131.0M
Receivables $666.0M $687.0M $667.0M
Other Receivables $46.00M $45.00M $44.00M
Total Short-Term Assets $2.067B $2.099B $2.360B
YoY Change -21.88% -29.8% -17.77%
LONG-TERM ASSETS
Property, Plant & Equipment $30.07B $29.97B $30.79B
YoY Change -1.01% 0.02% 5.39%
Goodwill $3.060B $3.175B $3.455B
YoY Change -13.8% -12.12% -3.76%
Intangibles $700.0M $693.0M $708.0M
YoY Change 3.09% 3.13% 7.6%
Long-Term Investments
YoY Change
Other Assets $151.0M $152.0M $164.0M
YoY Change -2.58% -60.21% -51.62%
Total Long-Term Assets $6.174B $5.970B $6.374B
YoY Change -1.58% -5.15% 3.54%
TOTAL ASSETS
Total Short-Term Assets $2.067B $2.099B $2.360B
Total Long-Term Assets $6.174B $5.970B $6.374B
Total Assets $38.32B $38.04B $39.53B
YoY Change -2.51% -3.08% 3.36%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $820.0M $741.0M $726.0M
YoY Change 0.99% -8.29% -19.51%
Accrued Expenses $270.0M $315.0M $211.0M
YoY Change -10.89% 5.0% 10.47%
Deferred Revenue
YoY Change
Short-Term Debt $923.0M $636.0M $856.0M
YoY Change 0.76% 14.18% -22.18%
Long-Term Debt Due $518.0M $443.0M $219.0M
YoY Change 6.8% -69.66% -78.1%
Total Short-Term Liabilities $3.837B $3.412B $3.408B
YoY Change -1.01% -23.63% -24.42%
LONG-TERM LIABILITIES
Long-Term Debt $17.81B $18.07B $18.95B
YoY Change -4.07% 1.83% 10.79%
Other Long-Term Liabilities $422.0M $437.0M $441.0M
YoY Change -13.7% -9.34% -8.32%
Total Long-Term Liabilities $6.771B $6.582B $6.846B
YoY Change -2.48% -3.36% 2.32%
TOTAL LIABILITIES
Total Short-Term Liabilities $3.837B $3.412B $3.408B
Total Long-Term Liabilities $6.771B $6.582B $6.846B
Total Liabilities $10.61B $9.994B $10.25B
YoY Change -1.95% -11.39% -8.45%
SHAREHOLDERS EQUITY
Retained Earnings $3.829B $3.624B $3.409B
YoY Change 29.66% 29.85% 28.45%
Common Stock $9.848B $9.831B $9.773B
YoY Change 1.59% 2.01% 2.11%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $9.899B $9.975B $10.33B
YoY Change
Total Liabilities & Shareholders Equity $38.32B $38.04B $39.53B
YoY Change -2.51% -3.08% 3.36%

Cashflow Statement

Concept 2016 Q4 2016 Q3 2016 Q2
OPERATING ACTIVITIES
Net Income $465.0M $473.0M $483.0M
YoY Change 16.54% 20.36% -163.8%
Depreciation, Depletion And Amortization $260.0M $249.0M $250.0M
YoY Change 9.24% 1.63% 7.76%
Cash From Operating Activities $660.0M $1.060B $613.0M
YoY Change 13.01% 47.63% -28.8%
INVESTING ACTIVITIES
Capital Expenditures -$824.0M -$736.0M -$698.0M
YoY Change -15.75% -17.21% -18.84%
Acquisitions
YoY Change
Other Investing Activities -$36.00M $17.00M $12.00M
YoY Change -1900.0% 1600.0% -90.48%
Cash From Investing Activities -$860.0M -$719.0M -$686.0M
YoY Change -11.89% -19.03% -6.54%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 119.0M -406.0M -267.0M
YoY Change -52.59% -234.44% -31.19%
NET CHANGE
Cash From Operating Activities 660.0M 1.060B 613.0M
Cash From Investing Activities -860.0M -719.0M -686.0M
Cash From Financing Activities 119.0M -406.0M -267.0M
Net Change In Cash -81.00M -65.00M -340.0M
YoY Change -42.55% -149.24% 30.27%
FREE CASH FLOW
Cash From Operating Activities $660.0M $1.060B $613.0M
Capital Expenditures -$824.0M -$736.0M -$698.0M
Free Cash Flow $1.484B $1.796B $1.311B
YoY Change -4.99% 11.76% -23.82%

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-18000000 USD
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-9000000 USD
CY2015 ppl Tax Adjustments Settlements And Unusual Provisions Recorded To Continuing Operations
TaxAdjustmentsSettlementsAndUnusualProvisionsRecordedToContinuingOperations
-12000000 USD
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TaxExpenseBenefitsExcludedFromIncomeTaxesFromContinuingOperationsTotal
-36000000 USD
CY2016 ppl Tax Expense Benefits Excluded From Income Taxes From Continuing Operations Total
TaxExpenseBenefitsExcludedFromIncomeTaxesFromContinuingOperationsTotal
-12000000 USD
CY2017 ppl Tax Expense Benefits Excluded From Income Taxes From Continuing Operations Total
TaxExpenseBenefitsExcludedFromIncomeTaxesFromContinuingOperationsTotal
-35000000 USD
CY2015 ppl Tax Expense Benefits Excluded Related To Validation Allowances For State Deferred Taxes
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-4000000 USD
CY2016 ppl Tax Expense Benefits Excluded Related To Validation Allowances For State Deferred Taxes
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1000000 USD
CY2017 ppl Tax Expense Benefits Excluded Related To Validation Allowances For State Deferred Taxes
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-1000000 USD
CY2015 ppl Tax Expense Benefits From Stock Options Exercised Offset Earnings Reinvested
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0 USD
CY2016 ppl Tax Expense Benefits From Stock Options Exercised Offset Earnings Reinvested
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-7000000 USD
CY2017 ppl Tax Expense Benefits From Stock Options Exercised Offset Earnings Reinvested
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0 USD
CY2015 ppl Tax Expense Benefits In Other Comprehensive Income
TaxExpenseBenefitsInOtherComprehensiveIncome
-2000000 USD
CY2016 ppl Tax Expense Benefits In Other Comprehensive Income
TaxExpenseBenefitsInOtherComprehensiveIncome
-6000000 USD
CY2017 ppl Tax Expense Benefits In Other Comprehensive Income
TaxExpenseBenefitsInOtherComprehensiveIncome
-34000000 USD
CY2015 ppl Taxes Other Than Income Domestic Property And Other
TaxesOtherThanIncomeDomesticPropertyAndOther
62000000 USD
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TaxesOtherThanIncomeDomesticPropertyAndOther
66000000 USD
CY2017 ppl Taxes Other Than Income Domestic Property And Other
TaxesOtherThanIncomeDomesticPropertyAndOther
69000000 USD
CY2015 ppl Taxes Other Than Income Foreign Property Tax Expense Benefit
TaxesOtherThanIncomeForeignPropertyTaxExpenseBenefit
148000000 USD
CY2016 ppl Taxes Other Than Income Foreign Property Tax Expense Benefit
TaxesOtherThanIncomeForeignPropertyTaxExpenseBenefit
135000000 USD
CY2017 ppl Taxes Other Than Income Foreign Property Tax Expense Benefit
TaxesOtherThanIncomeForeignPropertyTaxExpenseBenefit
127000000 USD
CY2015 ppl Taxes Other Than Income State Capital Stock Expense Benefit
TaxesOtherThanIncomeStateCapitalStockExpenseBenefit
0 USD
CY2016 ppl Taxes Other Than Income State Capital Stock Expense Benefit
TaxesOtherThanIncomeStateCapitalStockExpenseBenefit
0 USD
CY2017 ppl Taxes Other Than Income State Capital Stock Expense Benefit
TaxesOtherThanIncomeStateCapitalStockExpenseBenefit
-6000000 USD
CY2015 ppl Taxes Other Than Income State Gross Receipts Previously Recorded Reserves
TaxesOtherThanIncomeStateGrossReceiptsPreviouslyRecordedReserves
-17000000 USD
CY2015 ppl Taxes Other Than Income State Gross Receipts Tax Expense Benefit
TaxesOtherThanIncomeStateGrossReceiptsTaxExpenseBenefit
89000000 USD
CY2016 ppl Taxes Other Than Income State Gross Receipts Tax Expense Benefit
TaxesOtherThanIncomeStateGrossReceiptsTaxExpenseBenefit
100000000 USD
CY2017 ppl Taxes Other Than Income State Gross Receipts Tax Expense Benefit
TaxesOtherThanIncomeStateGrossReceiptsTaxExpenseBenefit
102000000 USD
CY2015 ppl Total Increase Decrease To Federal Income Tax On Income From Continuing Operations At Statutory Tax Rate
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-259000000 USD
CY2016 ppl Total Increase Decrease To Federal Income Tax On Income From Continuing Operations At Statutory Tax Rate
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-245000000 USD
CY2017 ppl Total Increase Decrease To Federal Income Tax On Income From Continuing Operations At Statutory Tax Rate
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115000000 USD
CY2016Q4 ppl Total Other Intangible Assets Finite Infinite
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1142000000 USD
CY2017Q4 ppl Total Other Intangible Assets Finite Infinite
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887000000 USD
CY2017 ppl Uncertain Tax Positions Second Step Benefit Recognized That Exceeds Percentage
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0.50
CY2015 ppl Unrealized Gains Losses On Derivatives And Other Hedging Activities
UnrealizedGainsLossesOnDerivativesAndOtherHedgingActivities
77000000 USD
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-19000000 USD
CY2017 ppl Unrealized Gains Losses On Derivatives And Other Hedging Activities
UnrealizedGainsLossesOnDerivativesAndOtherHedgingActivities
-178000000 USD
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VotesPerShareOfCommonStock
1 vote
CY2016 ppl Votes Per Share Of Common Stock
VotesPerShareOfCommonStock
1 vote
CY2017 ppl Votes Per Share Of Common Stock
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1 vote
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CY2017Q4 us-gaap Accounts Payable Current
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666000000 USD
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681000000 USD
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134000000 USD
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110000000 USD
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51000000 USD
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80000000 USD
CY2017 us-gaap Adjustment For Amortization
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51000000 USD
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21000000 USD
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9000000 USD
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29000000 USD
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43000000 USD
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310000000 USD
CY2016 us-gaap Capital Expenditures Incurred But Not Yet Paid
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281000000 USD
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CY2016 us-gaap Cash Provided By Used In Financing Activities Discontinued Operations
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0 USD
CY2017 us-gaap Cash Provided By Used In Financing Activities Discontinued Operations
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0 USD
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CY2016 us-gaap Cash Provided By Used In Investing Activities Discontinued Operations
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0 USD
CY2017 us-gaap Cash Provided By Used In Investing Activities Discontinued Operations
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0 USD
CY2017 us-gaap Cash Provided By Used In Operating Activities Discontinued Operations
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0 USD
CY2017Q4 us-gaap Collateral Already Posted Aggregate Fair Value
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0 USD
CY2016Q4 us-gaap Commitments And Contingencies
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USD
CY2017Q4 us-gaap Commitments And Contingencies
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1.50
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1.52
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0.3950
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0.3950
CY2017Q3 us-gaap Common Stock Dividends Per Share Declared
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0.3950
CY2017Q4 us-gaap Common Stock Dividends Per Share Declared
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0.3950
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1.58
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0.01
CY2017Q4 us-gaap Common Stock Par Or Stated Value Per Share
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0.01
CY2016Q4 us-gaap Common Stock Shares Authorized
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1560000000 shares
CY2017Q4 us-gaap Common Stock Shares Authorized
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1560000000 shares
CY2016Q4 us-gaap Common Stock Shares Issued
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679731000 shares
CY2017Q4 us-gaap Common Stock Shares Issued
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CY2016Q4 us-gaap Common Stock Shares Outstanding
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679731000 shares
CY2017Q4 us-gaap Common Stock Shares Outstanding
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693398000 shares
CY2016Q4 us-gaap Common Stock Value
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7000000 USD
CY2017Q4 us-gaap Common Stock Value
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CY2015 us-gaap Comprehensive Income Net Of Tax Including Portion Attributable To Noncontrolling Interest
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252000000 USD
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852000000 USD
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CY2017 us-gaap Current Federal Tax Expense Benefit
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6000000 USD
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89000000 USD
CY2016 us-gaap Current Foreign Tax Expense Benefit
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80000000 USD
CY2017 us-gaap Current Foreign Tax Expense Benefit
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45000000 USD
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88000000 USD
CY2016 us-gaap Current Income Tax Expense Benefit
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87000000 USD
CY2017 us-gaap Current Income Tax Expense Benefit
CurrentIncomeTaxExpenseBenefit
76000000 USD
CY2015 us-gaap Current State And Local Tax Expense Benefit
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25000000 USD
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21000000 USD
CY2017 us-gaap Current State And Local Tax Expense Benefit
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25000000 USD
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276000000 USD
CY2017Q4 us-gaap Customer Deposits Current
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292000000 USD
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CY2017 us-gaap Deferred Federal Income Tax Expense Benefit
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532000000 USD
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41000000 USD
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CY2015 us-gaap Deferred Income Tax Expense Benefit
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CY2016 us-gaap Deferred Income Tax Expense Benefit
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560000000 USD
CY2017 us-gaap Deferred Income Tax Expense Benefit
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CY2017Q4 us-gaap Deferred Income Tax Liabilities
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428000000 USD
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560000000 USD
CY2017 us-gaap Deferred Income Taxes And Tax Credits
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707000000 USD
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CY2017 us-gaap Deferred State And Local Income Tax Expense Benefit
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329000000 USD
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20000000 USD
CY2017Q4 us-gaap Deferred Tax Assets Derivative Instruments
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10000000 USD
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565000000 USD
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356000000 USD
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3000000 USD
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409000000 USD
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256000000 USD
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455000000 USD
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250000000 USD
CY2017Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Pensions
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159000000 USD
CY2016Q4 us-gaap Deferred Tax Assets Valuation Allowance
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CY2017Q4 us-gaap Deferred Tax Assets Valuation Allowance
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CY2017Q4 us-gaap Deferred Tax Liabilities
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4325000000 USD
CY2017Q4 us-gaap Deferred Tax Liabilities Property Plant And Equipment
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3168000000 USD
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343000000 USD
CY2017Q4 us-gaap Deferred Tax Liabilities Regulatory Assets
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CY2016Q4 us-gaap Defined Benefit Pension Plan Liabilities Noncurrent
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1001000000 USD
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800000000 USD
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9000000 USD
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284000000 USD
CY2015 us-gaap Depreciation
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CY2016 us-gaap Depreciation
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CY2017Q4 us-gaap Derivative Instruments And Hedges
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215000000 USD
CY2017Q4 us-gaap Derivative Net Liability Position Aggregate Fair Value
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51000000 USD
CY2015 us-gaap Discontinued Operation Tax Effect Of Discontinued Operation
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CY2016 us-gaap Discontinued Operation Tax Effect Of Discontinued Operation
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CY2017 us-gaap Discontinued Operation Tax Effect Of Discontinued Operation
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0 USD
CY2017Q4 us-gaap Dividend Payable Date To Be Paid Day Month And Year
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2018-01-02
CY2016Q4 us-gaap Dividends Payable Current
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259000000 USD
CY2017Q4 us-gaap Dividends Payable Current
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273000000 USD
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1.01
CY2016Q1 us-gaap Earnings Per Share Basic
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0.71
CY2016Q2 us-gaap Earnings Per Share Basic
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0.71
CY2016Q3 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.70
CY2016Q4 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.68
CY2016 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
2.80
CY2017Q1 us-gaap Earnings Per Share Basic
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0.59
CY2017Q2 us-gaap Earnings Per Share Basic
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0.43
CY2017Q3 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.52
CY2017Q4 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
0.11
CY2017 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
1.64
CY2015 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
1.01
CY2016Q1 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.71
CY2016Q2 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.71
CY2016Q3 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.69
CY2016Q4 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.68
CY2016 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
2.79
CY2017Q1 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.59
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EarningsPerShareDiluted
0.43
CY2017Q3 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.51
CY2017Q4 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
0.11
CY2015 us-gaap Income Loss From Continuing Operations Per Basic Share
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2.38
CY2016 us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
2.80
CY2017 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
1.64
CY2015 us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
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CY2017 us-gaap Number Of Reportable Segments
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3000000 USD
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CY2015 us-gaap Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax
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CY2016Q4 us-gaap Regulatory Assets Current
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CY2017 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">21. New Accounting Guidance Pending Adoption</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">(All Registrants)</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Accounting for Revenue from Contracts with Customers</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the Financial Accounting Standards Board (FASB) issued accounting guidance that establishes a comprehensive new model for the recognition of revenue from contracts with customers. This model is based on the core principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants have completed an assessment of their revenue under this new guidance and have determined it will not have a material impact on their current revenue recognition policies. The Registrants' operating revenues are derived primarily from tariff-based sales that result from providing electricity and natural gas to customers with no defined contractual term. Tariff-based sales are within the scope of the new guidance, and operating revenues under the new guidance will be equivalent to the electricity and natural gas delivered and billed in that period (including estimated billings), which is consistent with current practice.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;&#160;&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The disclosure requirements included in the standard will result in increased information being provided to enable the users of the financial statements to understand the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The Registrants will include disaggregation of revenues by geographic location, customer class or type of service, as applicable. Some revenue arrangements, including alternative revenue programs and lease income, are excluded from the scope of the new guidance and will be accounted for and disclosed separately from revenues from contracts with customers. The Registrants will also disclose the opening and closing balances of accounts receivable and any contract assets or contract liabilities resulting from contracts with customers. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants adopted this guidance effective January 1, 2018 using the modified retrospective transition method.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Accounting for Leases</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued accounting guidance for leases. This new guidance requires lessees to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, the FASB retained a dual model for lessees, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright line tests.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Lessor accounting under the new guidance is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Similar to current practice, lessors will classify leases as operating, direct financing, or sales-type. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The standard is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. One of these practical expedients allows entities to elect to not evaluate land easements as leases that exist or expired before the adoption date and were not previously accounted for as leases under current lease guidance. Transition will require application of the new guidance at the beginning of the earliest comparative period presented.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance. The Registrants will adopt this guidance effective January 1, 2019.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Accounting for Financial Instrument Credit Losses</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued accounting guidance that requires the use of a current expected credit loss (CECL) model for the measurement of credit losses on financial instruments within the scope of this guidance, which includes accounts receivable. The CECL model requires an entity to measure credit losses using historical information, current information and reasonable and supportable forecasts of future events, rather than the incurred loss impairment model required under current GAAP.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For public business entities, this guidance will be applied using a modified retrospective approach and is effective for fiscal years beginning after December 15, 2019, and interim periods within those years. All entities may early adopt this guidance beginning after December 15, 2018, including interim periods within those years.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2017, the FASB issued accounting guidance that changes the income statement presentation of net periodic benefit cost. This new guidance requires the service cost component to be disaggregated from other components of net benefit cost and presented in the same income statement line items as other employee compensation costs arising from services rendered during the period. The other components of net periodic benefits will be presented separately from the line items that include the service cost and outside of any subtotal of operating income. Only the service cost component is eligible for capitalization. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For public business entities, the guidance on the presentation of the components of net periodic benefit costs will be applied retrospectively. The guidance that limits the capitalization to the service cost component of net periodic benefit costs will be applied prospectively. This guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. The Registrants adopted this guidance effective January 1, 2018.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For PPL&#8217;s, LKE&#8217;s and LG&amp;E&#8217;s U.S. defined benefit pension and PPL's and LKE's other postretirement benefit plans, the adoption of this new guidance is not expected to have a material impact on either the presentation on the income statements or the amounts capitalized and related impact to expense, as the difference between the service cost and the non-service cost components of net periodic benefit costs has not historically been and is not expected to be material in 2018.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For PPL&#8217;s U.K. defined benefit pension plans, the non-service cost components of net periodic benefit cost has been in a net-credit position for the current reporting periods and is expected to continue to be in a net-credit position for 2018. Therefore, the estimated impact of adopting this new guidance related to the non-service cost component credits to be reclassified from &#8220;Other operation and maintenance&#8221; to &#8220;Other Income (Expense)-net&#8221; on the Statements of Income is approximately </font><font style="font-family:inherit;font-size:10pt;">$175 million</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$120 million</font><font style="font-family:inherit;font-size:10pt;"> for the years ended 2017 and 2016. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are finalizing the expected 2018 impacts of adopting the guidance as the amounts are affected by market conditions and assumptions selected at December 31, 2017. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Improvements to Accounting for Hedging Activities</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2017, the FASB issued accounting guidance that reduces complexity when applying hedge accounting as well as improves transparency about an entity's risk management activities. This guidance eliminates recognizing hedge ineffectiveness for cash flow and net investment hedges and provides for the ability to perform subsequent effectiveness assessments qualitatively. The guidance also makes certain changes to allowable methodologies such as allowing entities to apply the short-cut method to partial-term fair value hedges of interest rate risk as well as expands the ability to apply the critical terms match method to cash flow hedges of groups of forecasted transactions. The guidance also updates certain recognition and presentation requirements as well as disclosure requirements. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For public business entities, this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. This standard must be adopted using a modified retrospective approach and provides for certain transition elections that must be made prior to the first effectiveness testing date after adoption. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">(PPL, LKE, LG&amp;E and KU)</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Simplifying the Test for Goodwill Impairment</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the FASB issued accounting guidance that simplifies the test for goodwill impairment by eliminating the second step of the quantitative test. The second step of the quantitative test requires a calculation of the implied fair value of goodwill, which is determined in the same manner as the amount of goodwill in a business combination. Under this new guidance, an entity will now compare the estimated fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount the carrying amount exceeds the fair value of the reporting unit. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For public business entities, this guidance will be applied prospectively and is effective for annual or any interim goodwill impairment tests for fiscal years beginning after December 15, 2019. All entities may early adopt this guidance for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing the impact of adopting this guidance and the period they will adopt it.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">(PPL and LKE)</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2018, the FASB issued accounting guidance that gives entities the option to reclassify tax effects stranded within AOCI as a result of the TCJA to retained earnings. The reclassification applies only to those stranded tax effects arising from the TCJA enactment. Certain disclosures related to the stranded tax effects, including a description of the accounting policy for releasing income tax effects from AOCI, are required.</font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For all entities, this guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The amendments should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized.</font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Registrants are currently assessing this guidance and the period in which they will adopt it.</font></div></div>
CY2017 us-gaap Guarantees Indemnifications And Warranties Policies
GuaranteesIndemnificationsAndWarrantiesPolicies
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Guarantees</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">(All Registrants)</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Generally, the initial measurement of a guarantee liability is the fair value of the guarantee at its inception. However, there are certain guarantees excluded from the scope of accounting guidance and other guarantees that are not subject to the initial recognition and measurement provisions of accounting guidance that only require disclosure. See Note 13 for further discussion of recorded and unrecorded guarantees.</font></div></div>
CY2017 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;text-decoration:underline;">Use of Estimates</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</font></div></div>

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