SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to ___________
Commission file number 1-905
A. Full title of the plan and the address of the plan
if different from that of the issuer named below:
PP&L EMPLOYEE STOCK OWNERSHIP PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
PPL CORPORATION
TWO NORTH NINTH STREET
ALLENTOWN, PENNSYLVANIA 18101-1179
Report of Independent Accountants
To the Employee Benefit Plan Board of
PPL Corporation
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the PP&L Employee Stock Ownership Plan (the "Plan") at December 31, 1999 and
1998, and the changes in net assets available for benefits for the years then
ended in conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes at December 31, 1999 and of reportable transactions for
the year ended December 31, 1999 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
PricewaterhouseCoopers
Philadelphia, Pennsylvania
June 15, 2000
PP&L EMPLOYEE STOCK OWNERSHIP PLAN
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1999 AND 1998
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(Thousands of Dollars)
ASSETS 1999 1998
------ ---- ----
Investment - Common stock of PPL Corporation
at fair value................................................... $130,045 $161,668
Dividends receivable.............................................. 1,383 1,400
Cash and cash equivalents......................................... 3
---------------------- ----------------------
$131,431 $163,068
LIABILITIES
-----------
Dividends payable to participants................................. 1,383 1,400
---------------------- ----------------------
Net assets available for benefits
(100% vested)................................................... $130,048 $161,668
====================== ======================
The accompanying notes are an integral part of these financial statements.
PP&L EMPLOYEE STOCK OWNERSHIP PLAN
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
- ----------------------------------------------
(Thousands of Dollars)
1999 1998
---- ----
Investment Income:
Net (depreciation) appreciation of investment.................... $(27,647) $ 22,045
Dividend income.................................................. 5,619 7,716
Employer contributions............................................. 4,030 6,161
Miscellaneous income............................................... 3
-------------------- --------------------
(17,995) 35,922
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Dividend distributions to participants............................. (5,619) (7,716)
Distributions of stock and cash to active
and terminated participants.................................... (8,006) (9,147)
-------------------- --------------------
Total distributions.......................................... (13,625) (16,863)
-------------------- --------------------
Net (decrease) increase............................................ (31,620) 19,059
Net assets available for benefits:
Beginning of year.................................................. 161,668 142,609
-------------------- --------------------
End of year........................................................ $130,048 $161,668
==================== ====================
The accompanying notes are an integral part of these financial statements.
PP&L EMPLOYEE STOCK OWNERSHIP PLAN
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NOTES TO FINANCIAL STATEMENTS
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1. PLAN DESCRIPTION
The PP&L Employee Stock Ownership Plan (Plan) was adopted effective January
1, 1975 to provide for employee ownership in PPL Corporation (PPL),
formerly known as PP&L Resources, Inc., and most recently amended effective
January 1, 1999. Amounts contributed to the Plan are used to purchase
shares of common stock of PPL. The following description of the Plan
provides only general information. Participants should refer to the Plan
agreement for a more complete description of the plan provisions.
Substantially all full-time employees of PPL Electric Utilities
Corporation, formerly known as PP&L, Inc., and PPL EnergyPlus, LLC,
formerly known as PP&L EnergyPlus Co., LLC, (participating companies) who
have completed one year of service are eligible to participate in the Plan.
All amounts contributed to the Plan are invested in shares of common stock
of PPL.
The shares of common stock allocated to a participant's account may not
exceed the maximum permitted by law. All shares of common stock credited to
a participant's account are 100% vested and nonforfeitable, but cannot be
pledged as security by the employee. Stock certificates representing shares
in the Plan are held by the Trustee.
The Plan requires that dividends on shares credited to participants'
accounts be paid in cash. Under existing income tax laws, PPL Electric
Utilities or PPL is permitted to deduct the amount of those dividends for
income tax purposes and to contribute the resulting tax savings (dividend-
based contribution) to the Plan. The dividend-based contribution is used to
buy shares of PPL's common stock and is expressly conditioned upon the
deductibility of the contribution for federal income tax purposes. Shares
are allocated to participants' accounts, 75% on the basis of shares held in
a participant's account and 25% on the basis of the participant's
compensation.
Participants may elect to withdraw from their accounts common stock which
has been allocated with respect to a Plan year ending at least 84 months
prior to the end of the Plan year in which the election is made.
Participants so electing may receive cash or stock certificates for the
number of whole shares, cash for any fractional shares available for
withdrawal or may make a rollover to a qualified plan.
Participants who have attained age 55 and have completed ten years of
participation in the Plan may elect to withdraw a limited number of shares
added to their accounts after December 31, 1986. For the first five years
after meeting the requirement participants may withdraw up to an aggregate
of 25% of such shares. In the sixth year qualified participants may
withdraw up to an aggregate of 50% of such shares.
Upon termination of service with a participating company, participants are
entitled to receive cash or stock certificates for the number of whole
shares, cash for any fractional shares allocated to them or may make a
rollover to a qualified plan. Participants who terminate service with a
participating company and whose account balance exceeds, or exceeded at the
time of any prior distribution, $5,000 may defer distribution of the shares
of stock in the account until the earlier of age 65 or death. Participants
who terminate service with a participating company on or after age 55 may
defer distribution of the shares of stock in the account up to April 1 of
the year following the year in which the participant attains the age of 70-
1/2.
PPL has reserved the right to amend or terminate the Plan at any time by or
pursuant to action of its Board of Directors. Upon termination of the Plan
the interests of Plan participants, their estates and beneficiaries shall
be nonforfeitable and shall be fully vested. Distributions shall be made to
those eligible under Plan provisions in full shares of stock and cash in
lieu of fractional shares. No stock may be distributed to a participant
within seven years after the month in which such stock was allocated to a
participant's account except in the case of the participant's retirement.
Such stock will be held by the trustee until the participant satisfies the
seven year holding period.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended.
2. SIGNIFICANT ACCOUNTING POLICIES
A. The accompanying financial statements have been prepared under the
accrual basis of accounting.
B. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of increases
and decreases during the reporting period. Actual results could differ
from those estimates.
C. The Plan's common stock investment is stated at fair value. Fair value
is the quoted market price of PPL's common stock at the end of the
year. Realized gains and losses from the sale or distribution of stock
by the Trustee are based on the average cost of common stock held at
the time of sale. Net appreciation/ depreciation as reported in the
accompanying financial statements includes both realized and
unrealized gains and losses.
D. Dividend income and dividend distributions to participants are
recorded on dividend record dates.
3. ADMINISTRATION
The Plan is administered by the Employee Benefit Plan Board (EBPB),
composed of certain PPL Electric Utilities officers, appointed by the Board
of Directors of PPL Electric Utilities. The Board of Directors of PPL
Electric Utilities has appointed Mellon Bank as Trustee of the Plan.
Expenses incurred in the administration of the Plan are paid by PPL
Electric Utilities and the facilities of PPL Electric Utilities are used by
the Plan at no charge.
4. INVESTMENTS
The plan's investments, at December 31, are presented in the following
table:
1999 1998
---- ----
PPL Corporation
Common Stock:
Number of Shares 5,685,007 5,799,747
------------ ------------
Cost $104,048,618 $104,760,433
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Fair Value $130,044,535 $161,667,948
------------ ------------
The fair value per share at December 31, 1999 and 1998 was $22.875 and
$27.875, respectively.
5. TAX STATUS
In 1995, the Internal Revenue Service (IRS) issued a determination letter
that the Plan, as amended through December 20, 1994, continues to be
qualified under Section 401(a) of the Internal Revenue Code as a stock
bonus plan and constitutes an employee stock ownership plan under Section
409 of the Internal Revenue Code. The Plan has been amended since receiving
the determination letter; however, the Plan administrator believes that the
Plan is designed and is currently operated in compliance with the
applicable requirements of the Internal Revenue Code.
Under present Federal income tax laws and regulations, a qualified plan is
not taxed on contributions received from PPL Electric Utilities, PPL, or
participants, on dividend income, on realized gains from the sale of stock
or on any unrealized appreciation of investments. A participant in a
qualified plan is not subject to Federal income tax on amounts contributed
by PPL or PPL Electric Utilities until that participant receives a
distribution from the plan.
PP&L EMPLOYEE STOCK OWNERSHIP PLAN
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Schedule H, Line 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
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Identity of Issue,
Borrower, Lessor, Current
or Similar Party Description of Investment Cost Value
- - ---------------------------- -------------------------------------------- --------------------- ---------------------
* PPL Corporation Common Stock - $0.01 par value $104,048,618 $130,044,535
PP&L EMPLOYEE STOCK OWNERSHIP PLAN
- ----------------------------------
Schedule H, Line 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1999
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SERIES OF TRANSACTIONS, INVOLVING SECURITIES OF THE SAME ISSUE, IN EXCESS OF 5% OF THE CURRENT
VALUE OF NET ASSETS AVAILABLE FOR BENEFITS AT THE BEGINNING OF THE PLAN YEAR
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT
EXPENSE VALUE OF
IDENTITY OF TOTAL TOTAL INCURRED ASSET ON NET
PARTY PURCHASE SELLING WITH COST OF TRANSACTION GAIN
INVOLVED DESCRIPTION OF ASSET PRICE PRICE TRANSACTION ASSET DATE (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
The Employee Benefit PPL Corporation
Plan Board of Common Stock:
PPL Corporation as Purchase of 178,267
Administrator of the shares $4,029,957 $7,130 $4,022,827
PP&L Employee Stock
Ownership Plan Sale of 183,630 shares $5,048,994 $2,971,684 $5,048,994 $2,077,310
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Benefit Plan Board has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
PP&L Employee Stock Ownership Plan
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By: /s/ Peter R. Hilgert
---------------------
Peter R. Hilgert
Secretary, Employee Benefit Plan
Board
PPL Electric Utilities Corporation
Dated: June 28, 2000