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[X]
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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
[NO FEE REQUIRED]
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[ ]
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
[NO FEE REQUIRED]
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A.
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Full
title of the plan and the address of the plan is different from that
of
the issuer named below.
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B.
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Name
of issuer of the securities held pursuant to the plan and the address
of
its principal executive
office:
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PPL
EMPLOYEE STOCK OWNERSHIP PLAN
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STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
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AT
DECEMBER 31, 2005 AND 2004
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(Thousands
of Dollars)
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2005
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2004
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Assets
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Investment
- common stock of PPL Corporation
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$
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259,794
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$
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246,586
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at
fair value
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Dividends
receivable
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2,165
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1,865
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Interest
receivable
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2
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-
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Cash
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4
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1
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Total
assets
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261,965
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248,452
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Liabilities
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Dividends
payable to participants
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2,165
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1,865
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Net
assets available for benefits
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$
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259,800
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$
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246,587
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The
accompanying notes are an integral part of these financial
statements.
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PPL
EMPLOYEE STOCK OWNERSHIP PLAN
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STATEMENTS
OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS
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FOR
THE YEARS ENDED DECEMBER 31, 2005 AND 2004
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(Thousands
of Dollars)
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2005
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2004
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Additions
to net assets attributed to:
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Investment
Income:
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Net
appreciation of investment
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$
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25,177
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$
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43,998
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Dividend
income
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8,526
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7,635
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Interest
income
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5
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1
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Employer
contributions
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5,834
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5,384
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Total
additions
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39,542
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57,018
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Deductions
from net assets attributed to:
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Distributions
of dividends to participants
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(8,526
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)
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(7,635
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)
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Distributions
of stock and cash to participants
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(17,803
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)
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(14,611
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)
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Total
deductions
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(26,329
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)
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(22,246
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)
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Net
increase
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13,213
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34,772
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Net
assets available for benefits:
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Beginning
of year
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246,587
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211,815
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End
of year
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$
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259,800
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$
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246,587
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The
accompanying notes are an integral part of these financial
statements.
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| 1. |
PLAN
DESCRIPTION
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The
PPL Employee Stock Ownership Plan (the "Plan") was adopted effective
January 1, 1975 to provide for employee ownership in PPL Corporation
(PPL). The Plan is currently sponsored by PPL Services Corporation
(the
"Company"), an unregulated subsidiary of PPL. Amounts contributed
to the
Plan are used to purchase shares of PPL Corporation common stock.
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.
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Employees
of participating PPL companies, as defined in the Plan agreement,
who have
completed one year of credited service are eligible to participate
in the
Plan.
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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 Mellon Bank N.A. (the
"Trustee").
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The
Plan requires that dividends on shares credited to participants'
accounts
be paid in cash. Under existing income tax laws, PPL is permitted
to
deduct the amount of those dividends for income tax purposes on its
consolidated Federal income tax return 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.
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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.
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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.
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Upon
termination of service with a participating PPL 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 PPL 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 PPL 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.
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The
Company has reserved the right to amend or terminate the Plan at
any time
by or pursuant to action of the Board of Directors of PPL. 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. The Trustee will hold such
stock
until the participant satisfies the seven-year holding
period.
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The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended.
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| 2. |
SIGNIFICANT
ACCOUNTING POLICIES
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The
accompanying financial statements have been prepared under the accrual
basis of accounting.
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The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
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In
August 2005, PPL completed a 2-for-1 stock split of its common stock.
The
record date for the stock split was August 17, 2005, and the distribution
date was August 24, 2005. As a result of the stock split, approximately
4.4 million shares were issued to participants of the Plan. The number
of
shares and market price included in these financial statements have
been
adjusted for all periods presented to reflect the stock
split.
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The
Plan's common stock investment is stated at fair value. Fair value
is the
quoted market price of PPL Corporation 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 ncludes both realized and unrealized gains and
losses.
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Dividend
income and dividend distributions to participants are recorded on
dividend
record dates.
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| 3. |
ADMINISTRATION
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The
Plan is administered by the Employee Benefit Plan Board (the "Plan
Administrator"), composed of certain PPL officers and employees appointed
by the Board of Directors of PPL.
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Trustee
fees, investment management fees and other expenses incurred in connection
with the Plan are paid by the Company. The facilities of the Company
are
used by the Plan at no charge.
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| 4. |
INVESTMENTS
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December
31,
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2005
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2004
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PPL
Corporation Common Stock:
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Number
of Shares
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8,836,536
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9,256,234
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Cost
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$98,499,232
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$98,502,937
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Fair
Value
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$259,794,158
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$246,586,074
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| 5. |
TAX
STATUS
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The
Plan obtained its latest determination letter dated January 28, 2003,
in
which the Internal Revenue Service stated that the Plan, as then
designed,
was in compliance with the applicable requirements of the Internal
Revenue
Code (the "Code"). The Plan has been amended since receiving the
determination letter; however, the Plan's internal legal counsel
and Plan
Administrator believe that the Plan is designed in compliance with
the
applicable requirements of the Code and the Plan Administrator believes
the Plan is currently being operated in compliance with the applicable
requirements of the Code.
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| 6. |
CHANGE
OF TRUSTEE
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In
May 2006, the Plan Sponsor removed the current Trustee of the Plan,
Mellon
Bank, N.A., effective July 31, 2006. The Plan Sponsor intends to
appoint
Fidelity Asset Management Trust Company as the successor Trustee
as of
July 31, 2006. The Plan Sponsor also intends to move the daily
transaction/recordkeeping functions of the Plan from PPL’s Investor
Services group to Fidelity Investments. The transfer of the recordkeeping
function and assets to Fidelity is expected to be completed in early
August 2006. It is anticipated that the Plan Sponsor will authorize
the
Trustee to deduct Trustee and recordkeeping fees from the annual
gross
calculated Employer dividend based contribution, prior to allocation
of
shares to Participants. In the past, it was the Plan Sponsor’s practice to
pay Trustee fees directly, without deduction from the annual dividend
based contribution
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7.
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PLAN
AMENDMENT
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The
Plan Administrator authorized a Plan amendment to implement the following
plan changes and enhancements that have been facilitated by and will
coincide with the move to Fidelity.
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| · |
The
holding period required prior to eligibility for ESOP withdrawal
will be
reduced from 84 months to 36
months.
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| · |
Participants
over age 55 with at least 10 years of plan participation will be
able to
diversify into other investment options which will duplicate most
of those
options available under PPL’s savings
plans.
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| · |
Eligible
management and union employees will be eligible to participate in
the Plan
the first of the month following date of
hire.
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Plan
Name
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Plan
Number
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PPL
Employee Stock Ownership Plan
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002
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Plan
Sponsor
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Sponsor
EIN
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PPL
Services Corporation
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23-3041441
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Schedule
H, Line 4i - SCHEDULE OF ASSETS (Held at End of
Year)
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DECEMBER
31, 2005
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Identity
of Issue,
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Borrower,
Lessor,
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Current
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or
Similar Party
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Description
of Investment
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Cost
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Value
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(a)
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(b)
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(c)
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(d)
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(e)
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*
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PPL
Corporation
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8,836,536
Shares of PPL Corp
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Common
Stock - $0.01 par value
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$98,499,232
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$259,794,158
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*
Represents a Party-In-Interest
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Plan
Name
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Plan
Number
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PPL
Employee Stock Ownership Plan
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002
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Plan
Sponsor
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Sponsor
EIN
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PPL
Services Corporation
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23-3041441
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Schedule
H, Line 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
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YEAR
ENDED DECEMBER 31, 2005
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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
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CURRENT
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VALUE
OF
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IDENTITY
OF
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TOTAL
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TOTAL
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ASSET
ON
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NET
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PARTY
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PURCHASE
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SELLING
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COST
OF
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TRANSACTION
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GAIN
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INVOLVED
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DESCRIPTION
OF ASSET
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PRICE
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PRICE
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ASSET
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DATE
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(LOSS)
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(a)
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(b)
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(c)
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(d)
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(g)
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(h)
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(i)
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The
Employee Benefit
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PPL
Corporation
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Plan
Board of
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Common
Stock:
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PPL
Corporation as
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Purchase
of 194,570
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Administrator
of the
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Shares
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$5,834,514
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$5,834,514
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PPL
Employee Stock
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Ownership
Plan
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Sale
of 201,036 shares
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$9,247,609
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$3,027,440
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$9,247,609
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$6,220,169
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Mellon
Bank
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EB
Temporary
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$14,024,855
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$14,024,855
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Investment
Fund
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$14,017,932
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$14,017,932
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$14,017,932
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-
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PPL
Employee Stock Ownership Plan
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By:
/s/
T. W.
Hatten
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Thoburn
W. Hatten II
Chairman,
Employee Benefit Plan Board
PPL
Corporation
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Dated:
June 29, 2006
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