| [X]       | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2010        |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|      | OR                                                                                                                                               |
| [  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _________ to ___________ |

|   | Commission FileNumber | Registrant; State of Incorporation;Address and Telephone Number                                                                                                               | IRS EmployerIdentification No. |
|--------|-----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|
|   |                  |                                                                                                                                                                          |                           |
|   | 1-11459               | PPL Corporation(Exact name of Registrant as specified in its charter)(Pennsylvania)Two North Ninth StreetAllentown, PA  18101-1179(610) 774-5151                    | 23-2758192                     |
|   |                  |                                                                                                                                                                          |                           |
|   | 1-32944               | PPL Energy Supply, LLC(Exact name of Registrant as specified in its charter)(Delaware)Two North Ninth StreetAllentown, PA  18101-1179(610) 774-5151                 | 23-3074920                     |
|   |                  |                                                                                                                                                                          |                           |
|   | 1-905                 | PPL Electric Utilities Corporation(Exact name of Registrant as specified in its charter)(Pennsylvania)Two North Ninth StreetAllentown, PA  18101-1179(610) 774-5151 | 23-0959590                     |
|   |                  |                                                                                                                                                                          |                           |
|   |                  |                                                                                                                                                                          |                           |

|   | PPL Corporation                    | Yes  X    | No         |   |
|--------|------------------------------------|-------------------------------|-----------------------------------------------|--------|
|   | PPL Energy Supply, LLC             | Yes  X    | No         |   |
|   | PPL Electric Utilities Corporation | Yes  X    | No         |   |

|   | PPL Corporation                    | Yes         | No         |   |
|--------|------------------------------------|------------------------------------------------|-----------------------------------------------|--------|
|   | PPL Energy Supply, LLC             | Yes         | No         |   |
|   | PPL Electric Utilities Corporation | Yes         | No         |   |

|   |                               | Large accelerated filer          | Acceleratedfiler                 | Non-acceleratedfiler             | Smaller reportingcompany         |
|--------|------------------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|
|   | PPL Corporation                    | [ X ]                            | [     ] | [     ] | [     ] |
|   | PPL Energy Supply, LLC             | [     ] | [     ] | [ X ]                            | [     ] |
|   | PPL Electric Utilities Corporation | [     ] | [     ] | [ X ]                            | [     ] |

|   | PPL Corporation                    | Yes         | No  X    |   |
|--------|------------------------------------|------------------------------------------------|------------------------------|--------|
|   | PPL Energy Supply, LLC             | Yes         | No  X    |   |
|   | PPL Electric Utilities Corporation | Yes         | No  X    |   |

|   | PPL Corporation                    | Common stock, $.01 par value, 482,723,432 shares outstanding at July 30, 2010.                         |
|--------|------------------------------------|-------------------------------------------------------------------------------------------------------------|
|   |                               |                                                                                                        |
|   | PPL Energy Supply, LLC             | PPL Corporation indirectly holds all of the membership interests in PPL Energy Supply, LLC.                 |
|   |                               |                                                                                                        |
|   | PPL Electric Utilities Corporation | Common stock, no par value, 66,368,056 shares outstanding and all held by PPL Corporation at July 30, 2010. |

----

|                                                                                                                                 | Page                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
| GLOSSARY OF TERMS AND ABBREVIATIONS                                                                                                  | i                                                                                                        |   |
| FORWARD-LOOKING INFORMATION                                                                                                          | 1                                                                                                        |   |
| PART I.  FINANCIAL INFORMATION                                                                                             |                                                                                                     |   |
|                                                                                                                                 | Item 1.  Financial Statements                                                                  |   |   |
|                                                                                                                                 |                                                                                                     | PPL Corporation and Subsidiaries |   |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Income | 2 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Cash Flows | 3 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Balance Sheets | 4 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Equity | 6 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Comprehensive Income | 7 |   |
|                                                                                                                                 |                                                                                                     | PPL Energy Supply, LLC and Subsidiaries |   |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Income | 8 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Cash Flows | 9 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Balance Sheets | 10 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Equity | 12 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Comprehensive Income | 13 |   |
|                                                                                                                                 |                                                                                                     | PPL Electric Utilities Corporation and Subsidiaries |   |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Income | 14 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Cash Flows | 15 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Balance Sheets | 16 |   |
|                                                                                                                                 |                                                                                                     |   | Condensed Consolidated Statements of Shareowners' Equity | 18 |   |
|                                                                                                                                 | Combined Notes to Condensed Consolidated Financial Statements (Unaudited)                                |   |   |
|                                                                                                                                 |                                                                                                     | 1.   Interim Financial Statements | 19 |   |
|                                                                                                                                 |                                                                                                     | 2.   Summary of Significant Accounting Policies | 19 |   |
|                                                                                                                                 |                                                                                                     | 3.   Segment and Related Information | 21 |   |
|                                                                                                                                 |                                                                                                     | 4.   Earnings Per Share | 21 |   |
|                                                                                                                                 |                                                                                                     | 5.   Income Taxes | 22 |   |
|                                                                                                                                 |                                                                                                     | 6.   Variable Interest Entities | 24 |   |
|                                                                                                                                 |                                                                                                     | 7.   Financing Activities | 25 |   |
|                                                                                                                                 |                                                                                                     | 8.   Acquisitions, Development and Divestitures | 29 |   |
|                                                                                                                                 |                                                                                                     | 9.   Defined Benefits | 32 |   |
|                                                                                                                                 |                                                                                                     | 10. Commitments and Contingencies | 33 |   |
|                                                                                                                                 |                                                                                                     | 11. Related Party Transactions | 47 |   |
|                                                                                                                                 |                                                                                                     | 12. Other Income (Expense) - net | 48 |   |
|                                                                                                                                 |                                                                                                     | 13. Fair Value Measurements and Credit Concentrations | 49 |   |
|                                                                                                                                 |                                                                                                     | 14. Derivative Instruments and Hedging Activities | 54 |   |
|                                                                                                                                 |                                                                                                     | 15. Goodwill | 66 |   |
|                                                                                                                                 |                                                                                                     | 16. Asset Retirement Obligations | 66 |   |
|                                                                                                                                 |                                                                                                     | 17. Available-for-Sale Securities | 66 |   |
|                                                                                                                                 | Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations |   |   |
|                                                                                                                                 |                                                                                                     |   | PPL Corporation and Subsidiaries | 68 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Energy Supply, LLC and Subsidiaries | 86 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Electric Utilities Corporation and Subsidiaries | 99 |   |
|                                                                                                                                 | Item 3.  Quantitative and Qualitative Disclosures About Market Risk                            | 105 |   |
|                                                                                                                                 | Item 4.  Controls and Procedures                                                               | 105 |   |
|                                                                                                                                 | Item 4T.  Controls and Procedures                                                              | 105 |   |
| PART II.  OTHER INFORMATION                                                                                                |                                                                                                     |   |
|                                                                                                                                 | Item 1.  Legal Proceedings                                                                     | 106 |   |
|                                                                                                                                 | Item 1A.  Risk Factors                                                                         | 106 |   |
|                                                                                                                                 | Item 6.  Exhibits                                                                              | 108 |   |
| SIGNATURES                                                                                                                           | 109                                                                                                      |   |
| COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES                                                                                    |                                                                                                     |   |
|                                                                                                                                 |                                                                                                     |   | PPL Corporation and Subsidiaries | 110 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Energy Supply, LLC and Subsidiaries | 111 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Electric Utilities Corporation and Subsidiaries | 112 |   |
| CERTIFICATES OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 |                                                                                                     |   |
|                                                                                                                                 |                                                                                                     |   | PPL Corporation | 113 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Energy Supply, LLC | 115 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Electric Utilities Corporation | 117 |   |
| CERTIFICATES OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICERPURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 |                                                                                                     |   |
|                                                                                                                                 |                                                                                                     |   | PPL Corporation | 119 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Energy Supply, LLC | 121 |   |
|                                                                                                                                 |                                                                                                     |   | PPL Electric Utilities Corporation | 123 |   |

----

----

| · | fuel supply cost and availability;                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | weather conditions affecting generation, customer energy use and operating costs;                                                                       |
| · | operation, availability and operating costs of existing generation facilities;                                                                          |
| · | transmission and distribution system conditions and operating costs;                                                                                    |
| · | potential expansion of alternative sources of electricity generation;                                                                                   |
| · | potential laws or regulations to reduce emissions of "greenhouse" gases;                                                                                |
| · | collective labor bargaining negotiations;                                                                                                               |
| · | the outcome of litigation against PPL and its subsidiaries;                                                                                             |
| · | potential effects of threatened or actual terrorism, war or other hostilities, or natural disasters;                                                    |
| · | the commitments and liabilities of PPL and its subsidiaries;                                                                                            |
| · | market demand and prices for energy, capacity, emission allowances and delivered fuel;                                                                  |
| · | competition in retail and wholesale power markets;                                                                                                      |
| · | liquidity of wholesale power markets;                                                                                                                   |
| · | defaults by counterparties under energy, fuel or other power product contracts;                                                                         |
| · | market prices of commodity inputs for ongoing capital expenditures;                                                                                     |
| · | capital market conditions, including the availability of capital or credit, changes in interest rates, and decisions regarding capital structure;       |
| · | stock price performance of PPL;                                                                                                                         |
| · | the fair value of debt and equity securities and the impact on defined benefit costs and resultant cash funding requirements for defined benefit plans; |

| · | interest rates and their effect on pension, retiree medical and nuclear decommissioning liabilities;                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | the impact of the current financial and economic downturn;                                                                                                                                                      |
| · | the impact of the financial and economic market conditions in general;                                                                                                                                          |
| · | the effect of electricity price deregulation beginning in 2010 in PPL Electric's service territory;                                                                                                             |
| · | the profitability and liquidity, including access to capital markets and credit facilities, of PPL and its subsidiaries;                                                                                        |
| · | new accounting requirements or new interpretations or applications of existing requirements;                                                                                                                    |
| · | changes in securities and credit ratings;                                                                                                                                                                       |
| · | foreign currency exchange rates;                                                                                                                                                                                |
| · | current and future environmental conditions, regulations and other requirements and the related costs of compliance, including environmental capital expenditures, emission allowance costs and other expenses; |
| · | political, regulatory or economic conditions in states, regions or countries where PPL or its subsidiaries conduct business;                                                                                    |
| · | receipt of necessary governmental permits, approvals and rate relief;                                                                                                                                           |
| · | new state, federal or foreign legislation, including new tax legislation;                                                                                                                                       |
| · | state, federal and foreign regulatory developments;                                                                                                                                                             |
| · | the outcome of any rate cases by PPL Electric at the PUC;                                                                                                                                                       |
| · | the impact of any state, federal or foreign investigations applicable to PPL and its subsidiaries and the energy industry;                                                                                      |
| · | the effect of any business or industry restructuring;                                                                                                                                                           |
| · | development of new projects, markets and technologies;                                                                                                                                                          |
| · | performance of new ventures; and                                                                                                                                                                                |
| · | business or asset acquisitions and dispositions, including PPL's pending acquisition of E.ON U.S. and the satisfaction of all conditions precedent to the completion of that acquisition.                       |

----

| PART I. FINANCIAL INFORMATION                                                                         |
|-------------------------------------------------------------------------------------------------------|
| Item 1. Financial Statements                                                                          |
|                                                                                                  |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME                                                           |
| PPL Corporation and Subsidiaries                                                                      |
| (Unaudited)                                                                                           |
| (Millions of Dollars, except share data)                                                              |
|                                                                                                  |   | Three Months EndedJune 30, |   | Six Months EndedJune 30, |
|                                                                                                  |   | 2010 |   | 2009 |   | 2010 |   | 2009 |
| Operating Revenues                                                                                    |   |   |   |   |   |   |   |   |
| Utility                                                                                               |   | $ | 692 |   |   | $ | 881 |   |   | $ | 1,706 |   |   | $ | 1,946 |   |
| Unregulated retail electric and gas                                                                   |   |   | 101 |   |   |   | 32 |   |   |   | 205 |   |   |   | 74 |   |
| Wholesale energy marketing                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized                                                                                              |   |   | 1,261 |   |   |   | 758 |   |   |   | 2,647 |   |   |   | 1,556 |   |
| Unrealized economic activity (Note 14)                                                                |   |   | (666 | ) |   |   | (112 | ) |   |   | (242 | ) |   |   | 240 |   |
| Net energy trading margins                                                                            |   |   | 5 |   |   |   | 7 |   |   |   | 16 |   |   |   | (5 | ) |
| Energy-related businesses                                                                             |   |   | 110 |   |   |   | 105 |   |   |   | 204 |   |   |   | 204 |   |
| Total Operating Revenues                                                                              |   |   | 1,503 |   |   |   | 1,671 |   |   |   | 4,536 |   |   |   | 4,015 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operation                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel                                                                                                  |   |   | 263 |   |   |   | 186 |   |   |   | 496 |   |   |   | 444 |   |
| Energy purchases                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized                                                                                              |   |   | 740 |   |   |   | 613 |   |   |   | 1,752 |   |   |   | 1,290 |   |
| Unrealized economic activity (Note 14)                                                                |   |   | (445 | ) |   |   | 65 |   |   |   | 118 |   |   |   | 334 |   |
| Other operation and maintenance                                                                       |   |   | 423 |   |   |   | 354 |   |   |   | 868 |   |   |   | 726 |   |
| Amortization of recoverable transition costs                                                          |   |   |   |   |   |   | 70 |   |   |   |   |   |   |   | 154 |   |
| Depreciation                                                                                          |   |   | 130 |   |   |   | 114 |   |   |   | 258 |   |   |   | 223 |   |
| Taxes, other than income                                                                              |   |   | 54 |   |   |   | 67 |   |   |   | 126 |   |   |   | 139 |   |
| Energy-related businesses                                                                             |   |   | 100 |   |   |   | 98 |   |   |   | 188 |   |   |   | 189 |   |
| Total Operating Expenses                                                                              |   |   | 1,265 |   |   |   | 1,567 |   |   |   | 3,806 |   |   |   | 3,499 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income                                                                                      |   |   | 238 |   |   |   | 104 |   |   |   | 730 |   |   |   | 516 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expense) - net                                                                          |   |   | 1 |   |   |   | (6 | ) |   |   | 9 |   |   |   | 29 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other-Than-Temporary Impairments                                                                      |   |   | 3 |   |   |   | 1 |   |   |   | 3 |   |   |   | 18 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense                                                                                      |   |   | 132 |   |   |   | 99 |   |   |   | 246 |   |   |   | 188 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) from Continuing Operations Before Income Taxes                                          |   |   | 104 |   |   |   | (2 | ) |   |   | 490 |   |   |   | 339 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Taxes                                                                                          |   |   | 12 |   |   |   | (31 | ) |   |   | 143 |   |   |   | 67 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from Continuing Operations After Income Taxes                                                  |   |   | 92 |   |   |   | 29 |   |   |   | 347 |   |   |   | 272 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from Discontinued Operations (net of income taxes) (Note 8)                                      |   |   |   |   |   |   | (32 | ) |   |   |   |   |   |   | (29 | ) |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss)                                                                                     |   |   | 92 |   |   |   | (3 | ) |   |   | 347 |   |   |   | 243 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income Attributable to Noncontrolling Interests                                                   |   |   | 7 |   |   |   | 4 |   |   |   | 12 |   |   |   | 9 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) Attributable to PPL Corporation                                                     |   | $ | 85 |   |   | $ | (7 | ) |   | $ | 335 |   |   | $ | 234 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amounts Attributable to PPL Corporation:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from Continuing Operations After Income Taxes                                                  |   | $ | 85 |   |   | $ | 25 |   |   | $ | 335 |   |   | $ | 263 |   |
| Loss from Discontinued Operations (net of income taxes)                                               |   |   |   |   |   |   | (32 | ) |   |   |   |   |   |   | (29 | ) |
| Net Income (Loss)                                                                                     |   | $ | 85 |   |   | $ | (7 | ) |   | $ | 335 |   |   | $ | 234 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings Per Share of Common Stock:                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from Continuing Operations After Income Taxes Available to PPL Corporation Common Shareowners: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                 |   | $ | 0.22 |   |   | $ | 0.07 |   |   | $ | 0.88 |   |   | $ | 0.70 |   |
| Diluted                                                                                               |   | $ | 0.22 |   |   | $ | 0.07 |   |   | $ | 0.88 |   |   | $ | 0.70 |   |
| Net Income (Loss) Available to PPL Corporation Common Shareowners:                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                 |   | $ | 0.22 |   |   | $ | (0.02 | ) |   | $ | 0.88 |   |   | $ | 0.62 |   |
| Diluted                                                                                               |   | $ | 0.22 |   |   | $ | (0.02 | ) |   | $ | 0.88 |   |   | $ | 0.62 |   |
|                                                                                                  |   |   | . |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends Declared Per Share of Common Stock                                                          |   | $ | 0.350 |   |   | $ | 0.345 |   |   | $ | 0.700 |   |   | $ | 0.690 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-Average Shares of Common Stock Outstanding(in thousands)                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                 |   |   | 381,896 |   |   |   | 375,881 |   |   |   | 379,810 |   |   |   | 375,493 |   |
| Diluted                                                                                               |   |   | 382,075 |   |   |   | 376,206 |   |   |   | 380,034 |   |   |   | 375,805 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                  |
|----------------------------------------------------------------------------------|
| PPL Corporation and Subsidiaries                                                 |
| (Unaudited)                                                                      |
| (Millions of Dollars)                                                            |
|                                                                             |   | Six Months Ended June 30, |
|                                                                             |   | 2010 |   | 2009 |
| Cash Flows from Operating Activities                                             |   |   |   |   |   |   |   |   |
| Net income                                                                       |   | $ | 347 |   |   | $ | 243 |   |
| Adjustments to reconcile net income to net cash provided by operating activities |   |   |   |   |   |   |   |   |
| Depreciation                                                                     |   |   | 258 |   |   |   | 225 |   |
| Amortization                                                                     |   |   | 124 |   |   |   | 182 |   |
| Defined benefit plans - expense                                                  |   |   | 51 |   |   |   | 41 |   |
| Defined benefit plans - funding                                                  |   |   | (345 | ) |   |   | (52 | ) |
| Deferred income taxes and investment tax credits                                 |   |   | (63 | ) |   |   | (86 | ) |
| Gains related to the extinguishment of notes                                     |   |   |   |   |   |   | (29 | ) |
| Impairment of assets                                                             |   |   | 14 |   |   |   | 104 |   |
| Unrealized losses on derivatives, and other hedging activities                   |   |   | 344 |   |   |   | 40 |   |
| Provision for Montana hydroelectric litigation                                   |   |   | 59 |   |   |   |   |   |
| Other                                                                            |   |   | 59 |   |   |   | 30 |   |
| Change in current assets and current liabilities                                 |   |   |   |   |   |   |   |   |
| Accounts receivable                                                              |   |   | (45 | ) |   |   | 71 |   |
| Accounts payable                                                                 |   |   | 79 |   |   |   | (184 | ) |
| Unbilled revenue                                                                 |   |   | (114 | ) |   |   | 94 |   |
| Fuel, materials and supplies                                                     |   |   | (22 | ) |   |   | (45 | ) |
| Prepayments                                                                      |   |   | (156 | ) |   |   | (85 | ) |
| Counterparty collateral                                                          |   |   | 98 |   |   |   | 201 |   |
| Price risk management assets and liabilities                                     |   |   | (16 | ) |   |   | (192 | ) |
| Other                                                                            |   |   | (70 | ) |   |   | 6 |   |
| Other operating activities                                                       |   |   |   |   |   |   |   |   |
| Other assets                                                                     |   |   | (28 | ) |   |   | (5 | ) |
| Other liabilities                                                                |   |   | (2 | ) |   |   | 9 |   |
| Net cash provided by operating activities                                        |   |   | 572 |   |   |   | 568 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                             |   |   |   |   |   |   |   |   |
| Expenditures for property, plant and equipment                                   |   |   | (624 | ) |   |   | (524 | ) |
| Proceeds from the sale of the Long Island generation business                    |   |   | 124 |   |   |   |   |   |
| Expenditures for intangible assets                                               |   |   | (42 | ) |   |   | (48 | ) |
| Purchases of nuclear plant decommissioning trust investments                     |   |   | (75 | ) |   |   | (153 | ) |
| Proceeds from the sale of nuclear plant decommissioning trust investments        |   |   | 68 |   |   |   | 141 |   |
| Proceeds from the sale of other investments                                      |   |   |   |   |   |   | 150 |   |
| Net decrease in restricted cash and cash equivalents                             |   |   | 80 |   |   |   | 189 |   |
| Other investing activities                                                       |   |   | 11 |   |   |   | 5 |   |
| Net cash used in investing activities                                            |   |   | (458 | ) |   |   | (240 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                             |   |   |   |   |   |   |   |   |
| Issuance of long-term debt                                                       |   |   | 1,747 |   |   |   | 298 |   |
| Retirement of long-term debt                                                     |   |   | (1 | ) |   |   | (430 | ) |
| Issuance of equity, net of issuance costs                                        |   |   | 2,410 |   |   |   | 30 |   |
| Payment of common stock dividends                                                |   |   | (263 | ) |   |   | (256 | ) |
| Redemption of preferred stock of a subsidiary                                    |   |   | (54 | ) |   |   |   |   |
| Debt issuance costs                                                              |   |   | (76 | ) |   |   | (9 | ) |
| Net decrease in short-term debt                                                  |   |   | (158 | ) |   |   | (77 | ) |
| Other financing activities                                                       |   |   | (10 | ) |   |   | (11 | ) |
| Net cash provided by (used in) financing activities                              |   |   | 3,595 |   |   |   | (455 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| Effect of Exchange Rates on Cash and Cash Equivalents                            |   |   | (5 | ) |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash and Cash Equivalents                             |   |   | 3,704 |   |   |   | (127 | ) |
| Cash and Cash Equivalents at Beginning of Period                                 |   |   | 801 |   |   |   | 1,100 |   |
| Cash and Cash Equivalents at End of Period                                       |   | $ | 4,505 |   |   | $ | 973 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED BALANCE SHEETS                               |
|---------------------------------------------------------------------|
| PPL Corporation and Subsidiaries                                    |
| (Unaudited)                                                         |
| (Millions of Dollars, shares in thousands)                          |
|                                                                |   | June 30,2010 |   | December 31,2009 |
| Assets                                                              |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |
| Current Assets                                                      |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                           |   | $ | 4,505 |   |   | $ | 801 |   |
| Restricted cash and cash equivalents                                |   |   | 30 |   |   |   | 105 |   |
| Accounts receivable (less reserve:  2010, $38; 2009, $37) |   |   |   |   |   |   |   |   |
| Customer                                                            |   |   | 446 |   |   |   | 409 |   |
| Other                                                               |   |   | 54 |   |   |   | 59 |   |
| Unbilled revenues                                                   |   |   | 706 |   |   |   | 600 |   |
| Fuel, materials and supplies                                        |   |   | 378 |   |   |   | 357 |   |
| Prepayments                                                         |   |   | 256 |   |   |   | 102 |   |
| Price risk management assets                                        |   |   | 2,118 |   |   |   | 2,157 |   |
| Other intangibles                                                   |   |   | 18 |   |   |   | 25 |   |
| Assets held for sale                                                |   |   | 12 |   |   |   | 127 |   |
| Other current assets                                                |   |   | 76 |   |   |   | 10 |   |
| Total Current Assets                                                |   |   | 8,599 |   |   |   | 4,752 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Investments                                                         |   |   |   |   |   |   |   |   |
| Nuclear plant decommissioning trust funds                           |   |   | 535 |   |   |   | 548 |   |
| Other investments                                                   |   |   | 62 |   |   |   | 65 |   |
| Total Investments                                                   |   |   | 597 |   |   |   | 613 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Property, Plant and Equipment                                       |   |   |   |   |   |   |   |   |
| Electric plant                                                      |   |   |   |   |   |   |   |   |
| Transmission and distribution                                       |   |   | 8,373 |   |   |   | 8,686 |   |
| Generation                                                          |   |   | 10,753 |   |   |   | 10,493 |   |
| General                                                             |   |   | 909 |   |   |   | 899 |   |
| Electric plant in service                                           |   |   | 20,035 |   |   |   | 20,078 |   |
| Construction work in progress                                       |   |   | 564 |   |   |   | 567 |   |
| Nuclear fuel                                                        |   |   | 468 |   |   |   | 506 |   |
| Electric plant                                                      |   |   | 21,067 |   |   |   | 21,151 |   |
| Gas and oil plant                                                   |   |   | 68 |   |   |   | 68 |   |
| Other property                                                      |   |   | 158 |   |   |   | 166 |   |
| Property, plant and equipment, gross                                |   |   | 21,293 |   |   |   | 21,385 |   |
| Less:  accumulated depreciation                           |   |   | 8,245 |   |   |   | 8,211 |   |
| Property, Plant and Equipment, net (a)                              |   |   | 13,048 |   |   |   | 13,174 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Regulatory and Other Noncurrent Assets                              |   |   |   |   |   |   |   |   |
| Regulatory assets                                                   |   |   | 525 |   |   |   | 531 |   |
| Goodwill                                                            |   |   | 721 |   |   |   | 806 |   |
| Other intangibles (a)                                               |   |   | 602 |   |   |   | 615 |   |
| Price risk management assets                                        |   |   | 1,357 |   |   |   | 1,274 |   |
| Other noncurrent assets                                             |   |   | 464 |   |   |   | 400 |   |
| Total Regulatory and Other Noncurrent Assets                        |   |   | 3,669 |   |   |   | 3,626 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Total Assets                                                        |   | $ | 25,913 |   |   | $ | 22,165 |   |

| (a)                                                                                                                     |   | At June 30, 2010, includes $419 million of PP&E, consisting primarily of "Generation," including leasehold improvements, and $11 million of "Other intangibles" from the consolidation of a VIE.  At December 31, 2009, these balances were $424 million and $11 million.  See Note 6 for additional information. |
|-------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                    |
| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |

----

| CONDENSED CONSOLIDATED BALANCE SHEETS                   |
|---------------------------------------------------------|
| PPL Corporation and Subsidiaries                        |
| (Unaudited)                                             |
| (Millions of Dollars, shares in thousands)              |
|                                                    |   | June 30,2010 |   | December 31,2009 |
| Liabilities and Equity                                  |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| Current Liabilities                                     |   |   |   |   |   |   |   |   |
| Short-term debt                                         |   | $ | 466 |   |   | $ | 639 |   |
| Accounts payable                                        |   |   | 730 |   |   |   | 619 |   |
| Taxes                                                   |   |   | 76 |   |   |   | 92 |   |
| Interest                                                |   |   | 108 |   |   |   | 113 |   |
| Dividends                                               |   |   | 137 |   |   |   | 135 |   |
| Price risk management liabilities                       |   |   | 1,528 |   |   |   | 1,502 |   |
| Counterparty collateral                                 |   |   | 454 |   |   |   | 356 |   |
| Other current liabilities                               |   |   | 696 |   |   |   | 726 |   |
| Total Current Liabilities                               |   |   | 4,195 |   |   |   | 4,182 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Long-term Debt                                          |   |   | 8,711 |   |   |   | 7,143 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Deferred Credits and Other Noncurrent Liabilities       |   |   |   |   |   |   |   |   |
| Deferred income taxes and investment tax credits        |   |   | 2,320 |   |   |   | 2,153 |   |
| Price risk management liabilities                       |   |   | 616 |   |   |   | 582 |   |
| Accrued pension obligations                             |   |   | 781 |   |   |   | 1,283 |   |
| Asset retirement obligations                            |   |   | 427 |   |   |   | 416 |   |
| Other deferred credits and noncurrent liabilities       |   |   | 658 |   |   |   | 591 |   |
| Total Deferred Credits and Other Noncurrent Liabilities |   |   | 4,802 |   |   |   | 5,025 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Commitments and Contingent Liabilities (Note 10)        |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| Equity                                                  |   |   |   |   |   |   |   |   |
| PPL Corporation Shareowners' Common Equity              |   |   |   |   |   |   |   |   |
| Common stock - $0.01 par value (a)                      |   |   | 5 |   |   |   | 4 |   |
| Capital in excess of par value                          |   |   | 4,553 |   |   |   | 2,280 |   |
| Earnings reinvested                                     |   |   | 3,818 |   |   |   | 3,749 |   |
| Accumulated other comprehensive loss                    |   |   | (439 | ) |   |   | (537 | ) |
| Total PPL Corporation Shareowners' Common Equity        |   |   | 7,937 |   |   |   | 5,496 |   |
| Noncontrolling Interests                                |   |   | 268 |   |   |   | 319 |   |
| Total Equity                                            |   |   | 8,205 |   |   |   | 5,815 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Total Liabilities and Equity                            |   | $ | 25,913 |   |   | $ | 22,165 |   |

| (a)                                                                                                                     |   | 780,000 shares authorized; 482,188 and 377,183 shares issued and outstanding at June 30, 2010 and December 31, 2009. |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                    |
| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |

----

| CONDENSED CONSOLIDATED STATEMENTS OF EQUITY                             |
|-------------------------------------------------------------------------|
| PPL Corporation and Subsidiaries                                        |
| (Unaudited)                                                             |
| (Millions of Dollars)                                                   |
|                                                                    |   | PPL Corporation Shareowners |   |   |   |   |   |   |   |   |   |
|                                                                    |   | Common stock shares outstanding (a) |   |   |   | Common stock |   |   |   | Capital in excess of par value |   |   |   | Earnings reinvested |   |   |   | Accumulated other comprehensive loss |   |   |   | Non-controlling interests |   |   |   | Total |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2010                                                          |   | 378,131 |   |   | $ | 4 |   |   | $ | 2,310 |   |   | $ | 3,866 |   |   | $ | (288 | ) |   | $ | 319 |   |   | $ | 6,211 |   |
| Common stock issued (b)                                                 |   | 104,057 |   |   |   | 1 |   |   |   | 2,425 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,426 |   |
| Purchase Contracts (c)                                                  |   |   |   |   |   |   |   |   |   | (186 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (186 | ) |
| Stock-based compensation                                                |   |   |   |   |   |   |   |   |   | 4 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4 |   |
| Net income                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   | 85 |   |   |   |   |   |   |   | 7 |   |   |   | 92 |   |
| Dividends, dividend equivalents, redemptions and distributions (d) |   |   |   |   |   |   |   |   |   |   |   |   |   | (133 | ) |   |   |   |   |   |   | (58 | ) |   |   | (191 | ) |
| Other comprehensive loss                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (151 | ) |   |   |   |   |   |   | (151 | ) |
| June 30, 2010                                                      |   | 482,188 |   |   | $ | 5 |   |   | $ | 4,553 |   |   | $ | 3,818 |   |   | $ | (439 | ) |   | $ | 268 |   |   | $ | 8,205 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                                                  |   | 377,183 |   |   | $ | 4 |   |   | $ | 2,280 |   |   | $ | 3,749 |   |   | $ | (537 | ) |   | $ | 319 |   |   | $ | 5,815 |   |
| Common stock issued (b)                                                 |   | 105,005 |   |   |   | 1 |   |   |   | 2,458 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,459 |   |
| Purchase Contracts (c)                                                  |   |   |   |   |   |   |   |   |   | (186 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (186 | ) |
| Stock-based compensation                                                |   |   |   |   |   |   |   |   |   | 1 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1 |   |
| Net income                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   | 335 |   |   |   |   |   |   |   | 12 |   |   |   | 347 |   |
| Dividends, dividend equivalents, redemptions and distributions (d) |   |   |   |   |   |   |   |   |   |   |   |   |   | (266 | ) |   |   |   |   |   |   | (63 | ) |   |   | (329 | ) |
| Other comprehensive income                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 98 |   |   |   |   |   |   |   | 98 |   |
| June 30, 2010                                                      |   | 482,188 |   |   | $ | 5 |   |   | $ | 4,553 |   |   | $ | 3,818 |   |   | $ | (439 | ) |   | $ | 268 |   |   | $ | 8,205 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2009                                                          |   | 375,597 |   |   | $ | 4 |   |   | $ | 2,228 |   |   | $ | 3,973 |   |   | $ | (968 | ) |   | $ | 319 |   |   | $ | 5,556 |   |
| Common stock issued (b)                                                 |   | 547 |   |   |   |   |   |   |   | 15 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 15 |   |
| Stock-based compensation                                                |   |   |   |   |   |   |   |   |   | 3 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3 |   |
| Net income (loss)                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   | (7 | ) |   |   |   |   |   |   | 4 |   |   |   | (3 | ) |
| Dividends, dividend equivalents and distributions (d)                   |   |   |   |   |   |   |   |   |   |   |   |   |   | (130 | ) |   |   |   |   |   |   | (4 | ) |   |   | (134 | ) |
| Other comprehensive income                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 401 |   |   |   |   |   |   |   | 401 |   |
| Cumulative effect adjustment (e)                                        |   |   |   |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   | (1 | ) |   |   |   |   |   |   |   |   |
| June 30, 2009                                                      |   | 376,144 |   |   | $ | 4 |   |   | $ | 2,246 |   |   | $ | 3,837 |   |   | $ | (568 | ) |   | $ | 319 |   |   | $ | 5,838 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008                                                  |   | 374,581 |   |   | $ | 4 |   |   | $ | 2,196 |   |   | $ | 3,862 |   |   | $ | (985 | ) |   | $ | 319 |   |   | $ | 5,396 |   |
| Common stock issued (b)                                                 |   | 1,597 |   |   |   |   |   |   |   | 49 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 49 |   |
| Common stock repurchased                                                |   | (34 | ) |   |   |   |   |   |   | (1 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1 | ) |
| Stock-based compensation                                                |   |   |   |   |   |   |   |   |   | 2 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2 |   |
| Net income                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   | 234 |   |   |   |   |   |   |   | 9 |   |   |   | 243 |   |
| Dividends, dividend equivalents and distributions (d)                   |   |   |   |   |   |   |   |   |   |   |   |   |   | (260 | ) |   |   |   |   |   |   | (9 | ) |   |   | (269 | ) |
| Other comprehensive income                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 418 |   |   |   |   |   |   |   | 418 |   |
| Cumulative effect adjustment (e)                                        |   |   |   |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   | (1 | ) |   |   |   |   |   |   |   |   |
| June 30, 2009                                                      |   | 376,144 |   |   | $ | 4 |   |   | $ | 2,246 |   |   | $ | 3,837 |   |   | $ | (568 | ) |   | $ | 319 |   |   | $ | 5,838 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (a)                                                                                                                     |   | Shares in thousands.  Each share entitles the holder to one vote on any question presented to any shareowners' meeting.                                                                                                                                                                                                                                                                                                                                                                            |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)                                                                                                                     |   | The three and six months ended June 30, 2010 include the issuance of 103.5 million shares of common stock.  See Note 7 for additional information.  The three and six months ended June 30, 2010 and 2009 include shares of common stock issued through various stock and incentive compensation plans.  "Capital in excess of par value" for the six months ended June 30, 2010 and 2009 includes $8 million and $7 million for a company contribution to the ESOP. |
| (c)                                                                                                                     |   | Includes $157 million for the Purchase Contracts and $29 million of related fees and expenses.  See Note 7 for additional information.                                                                                                                                                                                                                                                                                                                                                             |
| (d)                                                                                                                     |   | "Earnings reinvested" includes dividends and dividend equivalents on PPL Corporation common stock and restricted stock units.  "Noncontrolling interests" includes dividends, redemptions and distributions to noncontrolling interests, which for the three and six months ended June 30, 2010 include $54 million paid to redeem PPL Electric's preferred stock.  See Note 7 for additional information.                                                                               |
| (e)                                                                                                                     |   | Recorded in connection with the adoption of accounting guidance related to the recognition and presentation of other-than-temporary impairments.                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                    |
| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |

----

| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                         |
|-----------------------------------------------------------------------------------|
| PPL Corporation and Subsidiaries                                                  |
| (Unaudited)                                                                       |
| (Millions of Dollars)                                                             |
|                                                                              |   | Three Months EndedJune 30, |   | Six Months EndedJune 30, |
|                                                                              |   | 2010 |   | 2009 |   | 2010 |   | 2009 |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                                 |   | $ | 92 |   |   | $ | (3 | ) |   | $ | 347 |   |   | $ | 243 |   |
| Other comprehensive income (loss):                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amounts arising during the period - gains (losses), net of tax (expense) benefit: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustments, net of tax of $0, $4, $(1), $4          |   |   | (67 | ) |   |   | 162 |   |   |   | (160 | ) |   |   | 70 |   |
| Available-for-sale securities, net of tax of $21, $(17), $10, $(11)               |   |   | (17 | ) |   |   | 16 |   |   |   | (7 | ) |   |   | 10 |   |
| Qualifying derivatives, net of tax of $114, $(131), $(148), $(198)                |   |   | (151 | ) |   |   | 169 |   |   |   | 226 |   |   |   | 270 |   |
| Defined benefit plans - net actuarial gain, net of tax of $(31), $(31)            |   |   | 80 |   |   |   |   |   |   |   | 80 |   |   |   |   |   |
| Reclassifications to net income - (gains) losses, net of tax expense (benefit):   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale securities, net of tax of $0, $1, $2                           |   |   | (2 | ) |   |   | (1 | ) |   |   | (4 | ) |   |   |   |   |
| Qualifying derivatives, net of tax of $1, $(28), $38, $(41)                       |   |   | (7 | ) |   |   | 51 |   |   |   | (67 | ) |   |   | 59 |   |
| Defined benefit plans:                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prior service costs, net of tax of $(1), $(2), $(4), $(4)                         |   |   | 5 |   |   |   | 2 |   |   |   | 7 |   |   |   | 6 |   |
| Net actuarial loss, net of tax of $(6), $(1), $(6), $(2)                          |   |   | 7 |   |   |   | 1 |   |   |   | 21 |   |   |   | 2 |   |
| Transition obligation, net of tax of $(1), $0, $(1), $0                           |   |   | 1 |   |   |   | 1 |   |   |   | 2 |   |   |   | 1 |   |
| Total other comprehensive income (loss) attributable to PPL Corporation           |   |   | (151 | ) |   |   | 401 |   |   |   | 98 |   |   |   | 418 |   |
| Comprehensive income (loss)                                                       |   |   | (59 | ) |   |   | 398 |   |   |   | 445 |   |   |   | 661 |   |
| Comprehensive income attributable to noncontrolling interests                     |   |   | 7 |   |   |   | 4 |   |   |   | 12 |   |   |   | 9 |   |
| Comprehensive income (loss) attributable to PPL Corporation                       |   | $ | (66 | ) |   | $ | 394 |   |   | $ | 433 |   |   | $ | 652 |   |

|                                                                                                                    |   |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------|
| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |

----

| CONDENSED CONSOLIDATED STATEMENTS OF INCOME                      |
|------------------------------------------------------------------|
| PPL Energy Supply, LLC and Subsidiaries                          |
| (Unaudited)                                                      |
| (Millions of Dollars)                                            |
|                                                             |   | Three Months EndedJune 30, |   | Six Months EndedJune 30, |
|                                                             |   | 2010 |   | 2009 |   | 2010 |   | 2009 |
| Operating Revenues                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Wholesale energy marketing                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized                                                         |   | $ | 1,261 |   |   | $ | 758 |   |   | $ | 2,647 |   |   | $ | 1,556 |   |
| Unrealized economic activity (Note 14)                           |   |   | (666 | ) |   |   | (112 | ) |   |   | (242 | ) |   |   | 240 |   |
| Wholesale energy marketing to affiliate                          |   |   | 64 |   |   |   | 411 |   |   |   | 179 |   |   |   | 908 |   |
| Utility                                                          |   |   | 172 |   |   |   | 155 |   |   |   | 375 |   |   |   | 331 |   |
| Unregulated retail electric and gas                              |   |   | 101 |   |   |   | 32 |   |   |   | 205 |   |   |   | 74 |   |
| Net energy trading margins                                       |   |   | 5 |   |   |   | 7 |   |   |   | 16 |   |   |   | (5 | ) |
| Energy-related businesses                                        |   |   | 106 |   |   |   | 103 |   |   |   | 197 |   |   |   | 199 |   |
| Total Operating Revenues                                         |   |   | 1,043 |   |   |   | 1,354 |   |   |   | 3,377 |   |   |   | 3,303 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operation                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel                                                             |   |   | 263 |   |   |   | 186 |   |   |   | 496 |   |   |   | 444 |   |
| Energy purchases                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized                                                         |   |   | 533 |   |   |   | 581 |   |   |   | 1,136 |   |   |   | 1,226 |   |
| Unrealized economic activity (Note 14)                           |   |   | (445 | ) |   |   | 65 |   |   |   | 118 |   |   |   | 334 |   |
| Energy purchases from affiliate                                  |   |   |   |   |   |   | 20 |   |   |   | 1 |   |   |   | 40 |   |
| Other operation and maintenance                                  |   |   | 300 |   |   |   | 270 |   |   |   | 642 |   |   |   | 550 |   |
| Depreciation                                                     |   |   | 92 |   |   |   | 80 |   |   |   | 183 |   |   |   | 153 |   |
| Taxes, other than income                                         |   |   | 24 |   |   |   | 21 |   |   |   | 49 |   |   |   | 41 |   |
| Energy-related businesses                                        |   |   | 97 |   |   |   | 97 |   |   |   | 182 |   |   |   | 186 |   |
| Total Operating Expenses                                         |   |   | 864 |   |   |   | 1,320 |   |   |   | 2,807 |   |   |   | 2,974 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income                                                 |   |   | 179 |   |   |   | 34 |   |   |   | 570 |   |   |   | 329 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expense) - net                                     |   |   | 7 |   |   |   | (6 | ) |   |   | 14 |   |   |   | 23 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other-Than-Temporary Impairments                                 |   |   | 3 |   |   |   | 1 |   |   |   | 3 |   |   |   | 18 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Income from Affiliates                                  |   |   | 2 |   |   |   | 1 |   |   |   | 2 |   |   |   | 2 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense                                                 |   |   | 84 |   |   |   | 68 |   |   |   | 170 |   |   |   | 123 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) from Continuing Operations Before Income Taxes     |   |   | 101 |   |   |   | (40 | ) |   |   | 413 |   |   |   | 213 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Taxes                                                     |   |   | 15 |   |   |   | (41 | ) |   |   | 127 |   |   |   | 24 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from Continuing Operations After Income Taxes             |   |   | 86 |   |   |   | 1 |   |   |   | 286 |   |   |   | 189 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from Discontinued Operations (net of income taxes) (Note 8) |   |   |   |   |   |   | (32 | ) |   |   |   |   |   |   | (29 | ) |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) Attributable to PPL Energy Supply              |   | $ | 86 |   |   | $ | (31 | ) |   | $ | 286 |   |   | $ | 160 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                  |
|----------------------------------------------------------------------------------|
| PPL Energy Supply, LLC and Subsidiaries                                          |
| (Unaudited)                                                                      |
| (Millions of Dollars)                                                            |
|                                                                             |   | Six Months Ended June 30, |
|                                                                             |   | 2010 |   | 2009 |
|                                                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Operating Activities                                             |   |   |   |   |   |   |   |   |
| Net income                                                                       |   | $ | 286 |   |   | $ | 160 |   |
| Adjustments to reconcile net income to net cash provided by operating activities |   |   |   |   |   |   |   |   |
| Depreciation                                                                     |   |   | 183 |   |   |   | 154 |   |
| Amortization                                                                     |   |   | 69 |   |   |   | 23 |   |
| Defined benefit plans - expense                                                  |   |   | 29 |   |   |   | 12 |   |
| Defined benefit plans - funding                                                  |   |   | (275 | ) |   |   | (51 | ) |
| Deferred income taxes and investment tax credits                                 |   |   | (95 | ) |   |   | 6 |   |
| Impairment of assets                                                             |   |   | 14 |   |   |   | 100 |   |
| Unrealized losses on derivatives, and other hedging activities                   |   |   | 347 |   |   |   | 41 |   |
| Provision for Montana hydroelectric litigation                                   |   |   | 59 |   |   |   |   |   |
| Other                                                                            |   |   | 53 |   |   |   | (1 | ) |
| Change in current assets and current liabilities                                 |   |   |   |   |   |   |   |   |
| Accounts receivable                                                              |   |   | 94 |   |   |   | 121 |   |
| Accounts payable                                                                 |   |   | (38 | ) |   |   | (203 | ) |
| Unbilled revenue                                                                 |   |   | (190 | ) |   |   | 50 |   |
| Fuel, materials and supplies                                                     |   |   | (20 | ) |   |   | (45 | ) |
| Collateral on PLR energy supply to affiliate                                     |   |   |   |   |   |   | 221 |   |
| Counterparty collateral                                                          |   |   | 98 |   |   |   | 201 |   |
| Price risk management assets and liabilities                                     |   |   | (17 | ) |   |   | (191 | ) |
| Other                                                                            |   |   | 8 |   |   |   | 11 |   |
| Other operating activities                                                       |   |   |   |   |   |   |   |   |
| Other assets                                                                     |   |   | (25 | ) |   |   | (6 | ) |
| Other liabilities                                                                |   |   | 22 |   |   |   | (35 | ) |
| Net cash provided by operating activities                                        |   |   | 602 |   |   |   | 568 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                             |   |   |   |   |   |   |   |   |
| Expenditures for property, plant and equipment                                   |   |   | (464 | ) |   |   | (391 | ) |
| Proceeds from the sale of the Long Island generation business                    |   |   | 124 |   |   |   |   |   |
| Expenditures for intangible assets                                               |   |   | (39 | ) |   |   | (42 | ) |
| Purchases of nuclear plant decommissioning trust investments                     |   |   | (75 | ) |   |   | (153 | ) |
| Proceeds from the sale of nuclear plant decommissioning trust investments        |   |   | 68 |   |   |   | 141 |   |
| Proceeds from the sale of other investments                                      |   |   |   |   |   |   | 150 |   |
| Net decrease in restricted cash and cash equivalents                             |   |   | 77 |   |   |   | 190 |   |
| Net increase in note receivable from affiliate                                   |   |   |   |   |   |   | (47 | ) |
| Other investing activities                                                       |   |   | 9 |   |   |   | 5 |   |
| Net cash used in investing activities                                            |   |   | (300 | ) |   |   | (147 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                             |   |   |   |   |   |   |   |   |
| Issuance of long-term debt                                                       |   |   | 597 |   |   |   |   |   |
| Retirement of long-term debt                                                     |   |   |   |   |   |   | (220 | ) |
| Distributions to Member                                                          |   |   | (364 | ) |   |   | (373 | ) |
| Contributions from Member                                                        |   |   | 3,525 |   |   |   |   |   |
| Net (decrease) increase in short-term debt                                       |   |   | (158 | ) |   |   | 142 |   |
| Other financing activities                                                       |   |   | (8 | ) |   |   | (5 | ) |
| Net cash provided by (used in) financing activities                              |   |   | 3,592 |   |   |   | (456 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| Effect of Exchange Rates on Cash and Cash Equivalents                            |   |   | (5 | ) |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash and Cash Equivalents                             |   |   | 3,889 |   |   |   | (35 | ) |
| Cash and Cash Equivalents at Beginning of Period                                 |   |   | 245 |   |   |   | 464 |   |
| Cash and Cash Equivalents at End of Period                                       |   | $ | 4,134 |   |   | $ | 429 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED BALANCE SHEETS                               |
|---------------------------------------------------------------------|
| PPL Energy Supply, LLC and Subsidiaries                             |
| (Unaudited)                                                         |
| (Millions of Dollars)                                               |
|                                                                |   | June 30,2010 |   | December 31,2009 |
| Assets                                                              |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |
| Current Assets                                                      |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                           |   | $ | 4,134 |   |   | $ | 245 |   |
| Restricted cash and cash equivalents                                |   |   | 26 |   |   |   | 99 |   |
| Accounts receivable (less reserve:  2010, $20; 2009, $21) |   |   |   |   |   |   |   |   |
| Customer                                                            |   |   | 164 |   |   |   | 168 |   |
| Other                                                               |   |   | 27 |   |   |   | 31 |   |
| Unbilled revenues                                                   |   |   | 584 |   |   |   | 402 |   |
| Accounts receivable from affiliates                                 |   |   | 66 |   |   |   | 165 |   |
| Fuel, materials and supplies                                        |   |   | 344 |   |   |   | 325 |   |
| Prepayments                                                         |   |   | 80 |   |   |   | 56 |   |
| Price risk management assets                                        |   |   | 2,111 |   |   |   | 2,147 |   |
| Other intangibles                                                   |   |   | 18 |   |   |   | 25 |   |
| Assets held for sale                                                |   |   | 12 |   |   |   | 127 |   |
| Other current assets                                                |   |   | 4 |   |   |   | 1 |   |
| Total Current Assets                                                |   |   | 7,570 |   |   |   | 3,791 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Investments                                                         |   |   |   |   |   |   |   |   |
| Nuclear plant decommissioning trust funds                           |   |   | 535 |   |   |   | 548 |   |
| Other investments                                                   |   |   | 55 |   |   |   | 58 |   |
| Total Investments                                                   |   |   | 590 |   |   |   | 606 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Property, Plant and Equipment                                       |   |   |   |   |   |   |   |   |
| Electric plant                                                      |   |   |   |   |   |   |   |   |
| Transmission and distribution                                       |   |   | 3,642 |   |   |   | 4,024 |   |
| Generation                                                          |   |   | 10,755 |   |   |   | 10,493 |   |
| General                                                             |   |   | 264 |   |   |   | 285 |   |
| Electric plant in service                                           |   |   | 14,661 |   |   |   | 14,802 |   |
| Construction work in progress                                       |   |   | 388 |   |   |   | 422 |   |
| Nuclear fuel                                                        |   |   | 468 |   |   |   | 506 |   |
| Electric plant                                                      |   |   | 15,517 |   |   |   | 15,730 |   |
| Gas and oil plant                                                   |   |   | 68 |   |   |   | 68 |   |
| Other property                                                      |   |   | 155 |   |   |   | 164 |   |
| Property, plant and equipment, gross                                |   |   | 15,740 |   |   |   | 15,962 |   |
| Less:  accumulated depreciation                           |   |   | 6,149 |   |   |   | 6,169 |   |
| Property, Plant and Equipment, net (a)                              |   |   | 9,591 |   |   |   | 9,793 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Other Noncurrent Assets                                             |   |   |   |   |   |   |   |   |
| Goodwill                                                            |   |   | 721 |   |   |   | 806 |   |
| Other intangibles (a)                                               |   |   | 461 |   |   |   | 477 |   |
| Price risk management assets                                        |   |   | 1,321 |   |   |   | 1,234 |   |
| Other noncurrent assets                                             |   |   | 383 |   |   |   | 317 |   |
| Total Other Noncurrent Assets                                       |   |   | 2,886 |   |   |   | 2,834 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Total Assets                                                        |   | $ | 20,637 |   |   | $ | 17,024 |   |

| (a)                                                                                                                     |   | At June 30, 2010, includes $419 million of PP&E, consisting primarily of "Generation," including leasehold improvements, and $11 million of "Other intangibles" from the consolidation of a VIE.  At December 31, 2009, these balances were $424 million and $11 million.  See Note 6 for additional information. |
|-------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                    |
| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |

----

| CONDENSED CONSOLIDATED BALANCE SHEETS                   |
|---------------------------------------------------------|
| PPL Energy Supply, LLC and Subsidiaries                 |
| (Unaudited)                                             |
| (Millions of Dollars)                                   |
|                                                    |   | June 30,2010 |   | December 31,2009 |
| Liabilities and Equity                                  |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| Current Liabilities                                     |   |   |   |   |   |   |   |   |
| Short-term debt                                         |   | $ | 466 |   |   | $ | 639 |   |
| Accounts payable                                        |   |   | 542 |   |   |   | 537 |   |
| Accounts payable to affiliates                          |   |   | 40 |   |   |   | 51 |   |
| Taxes                                                   |   |   | 69 |   |   |   | 33 |   |
| Interest                                                |   |   | 78 |   |   |   | 86 |   |
| Price risk management liabilities                       |   |   | 1,465 |   |   |   | 1,502 |   |
| Counterparty collateral                                 |   |   | 454 |   |   |   | 356 |   |
| Other current liabilities                               |   |   | 463 |   |   |   | 481 |   |
| Total Current Liabilities                               |   |   | 3,577 |   |   |   | 3,685 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Long-term Debt                                          |   |   | 5,436 |   |   |   | 5,031 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Deferred Credits and Other Noncurrent Liabilities       |   |   |   |   |   |   |   |   |
| Deferred income taxes and investment tax credits        |   |   | 1,680 |   |   |   | 1,511 |   |
| Price risk management liabilities                       |   |   | 600 |   |   |   | 582 |   |
| Accrued pension obligations                             |   |   | 441 |   |   |   | 883 |   |
| Asset retirement obligations                            |   |   | 427 |   |   |   | 416 |   |
| Other deferred credits and noncurrent liabilities       |   |   | 290 |   |   |   | 330 |   |
| Total Deferred Credits and Other Noncurrent Liabilities |   |   | 3,438 |   |   |   | 3,722 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Commitments and Contingent Liabilities (Note 10)        |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| Equity                                                  |   |   |   |   |   |   |   |   |
| Member's equity                                         |   |   | 8,168 |   |   |   | 4,568 |   |
| Noncontrolling interests                                |   |   | 18 |   |   |   | 18 |   |
| Total Equity                                            |   |   | 8,186 |   |   |   | 4,586 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Total Liabilities and Equity                            |   | $ | 20,637 |   |   | $ | 17,024 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED STATEMENTS OF EQUITY |
|---------------------------------------------|
| PPL Energy Supply, LLC and Subsidiaries     |
| (Unaudited)                                 |
| (Millions of Dollars)                       |
|                                        |   | Member's equity |   | Non-controlling interests |   | Total |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2010                              |   | $ | 4,857 |   |   | $ | 18 |   |   | $ | 4,875 |   |
| Net income                                  |   |   | 86 |   |   |   |   |   |   |   | 86 |   |
| Other comprehensive loss                    |   |   | (98 | ) |   |   |   |   |   |   | (98 | ) |
| Contributions from member                   |   |   | 3,525 |   |   |   |   |   |   |   | 3,525 |   |
| Distributions to member                     |   |   | (202 | ) |   |   |   |   |   |   | (202 | ) |
| June 30, 2010                          |   | $ | 8,168 |   |   | $ | 18 |   |   | $ | 8,186 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                      |   | $ | 4,568 |   |   | $ | 18 |   |   | $ | 4,586 |   |
| Net income                                  |   |   | 286 |   |   |   |   |   |   |   | 286 |   |
| Other comprehensive income                  |   |   | 153 |   |   |   |   |   |   |   | 153 |   |
| Contributions from member                   |   |   | 3,525 |   |   |   |   |   |   |   | 3,525 |   |
| Distributions to member                     |   |   | (364 | ) |   |   |   |   |   |   | (364 | ) |
| June 30, 2010                          |   | $ | 8,168 |   |   | $ | 18 |   |   | $ | 8,186 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2009                              |   | $ | 4,696 |   |   | $ | 18 |   |   | $ | 4,714 |   |
| Net loss                                    |   |   | (31 | ) |   |   |   |   |   |   | (31 | ) |
| Other comprehensive income                  |   |   | 386 |   |   |   |   |   |   |   | 386 |   |
| Distributions to member                     |   |   | (77 | ) |   |   |   |   |   |   | (77 | ) |
| June 30, 2009                          |   | $ | 4,974 |   |   | $ | 18 |   |   | $ | 4,992 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008                      |   | $ | 4,794 |   |   | $ | 18 |   |   | $ | 4,812 |   |
| Net income                                  |   |   | 160 |   |   |   |   |   |   |   | 160 |   |
| Other comprehensive income                  |   |   | 393 |   |   |   |   |   |   |   | 393 |   |
| Distributions to member                     |   |   | (373 | ) |   |   |   |   |   |   | (373 | ) |
| June 30, 2009                          |   | $ | 4,974 |   |   | $ | 18 |   |   | $ | 4,992 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                           |
|-------------------------------------------------------------------------------------|
| PPL Energy Supply, LLC and Subsidiaries                                             |
| (Unaudited)                                                                         |
| (Millions of Dollars)                                                               |
|                                                                                |   | Three Months EndedJune 30, |   |   | Six Months EndedJune 30, |   |
|                                                                                |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                                   |   | $ | 86 |   |   | $ | (31 | ) |   | $ | 286 |   |   | $ | 160 |   |
| Other comprehensive income (loss):                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amounts arising during the period - gains (losses), net of tax (expense) benefit:   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustments, net of tax of $0, $4, $(1), $4            |   |   | (67 | ) |   |   | 162 |   |   |   | (160 | ) |   |   | 70 |   |
| Available-for-sale securities, net of tax of $21, $(18), $10, $(12)                 |   |   | (17 | ) |   |   | 16 |   |   |   | (7 | ) |   |   | 10 |   |
| Qualifying derivatives, net of tax of $75, $(122), $(190), $(180)                   |   |   | (97 | ) |   |   | 155 |   |   |   | 285 |   |   |   | 245 |   |
| Defined benefit plans - net actuarial gain, net of tax of $(31), $(31)              |   |   | 80 |   |   |   |   |   |   |   | 80 |   |   |   |   |   |
| Reclassifications to net income - (gains) losses, net of tax expense (benefit):     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale securities, net of tax of $0, $1, $2                             |   |   | (2 | ) |   |   | (1 | ) |   |   | (4 | ) |   |   |   |   |
| Qualifying derivatives, net of tax of $0, $(28), $38, $(42)                         |   |   | (8 | ) |   |   | 50 |   |   |   | (68 | ) |   |   | 60 |   |
| Defined benefit plans:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prior service costs, net of tax of $0, $(1), $(3), $(3)                             |   |   | 4 |   |   |   | 3 |   |   |   | 5 |   |   |   | 6 |   |
| Net actuarial loss, net of tax of $(5), $0, $(6), $(1)                              |   |   | 8 |   |   |   | 1 |   |   |   | 20 |   |   |   | 2 |   |
| Transition obligation                                                               |   |   | 1 |   |   |   |   |   |   |   | 2 |   |   |   |   |   |
| Total other comprehensive income (loss) attributable to PPL Energy Supply |   |   | (98 | ) |   |   | 386 |   |   |   | 153 |   |   |   | 393 |   |
| Comprehensive income (loss) attributable to PPL Energy Supply                       |   | $ | (12 | ) |   | $ | 355 |   |   | $ | 439 |   |   | $ | 553 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED STATEMENTS OF INCOME         |
|-----------------------------------------------------|
| PPL Electric Utilities Corporation and Subsidiaries |
| (Unaudited)                                         |
| (Millions of Dollars)                               |
|                                                |   | Three Months EndedJune 30, |   | Six Months EndedJune 30, |
|                                                |   | 2010 |   | 2009 |   | 2010 |   | 2009 |
| Operating Revenues                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retail electric                                     |   | $ | 522 |   |   | $ | 727 |   |   | $ | 1,334 |   |   | $ | 1,617 |   |
| Wholesale electric to affiliate                     |   |   |   |   |   |   | 20 |   |   |   | 1 |   |   |   | 40 |   |
| Total Operating Revenues                            |   |   | 522 |   |   |   | 747 |   |   |   | 1,335 |   |   |   | 1,657 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operation                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Energy purchases                                    |   |   | 209 |   |   |   | 31 |   |   |   | 619 |   |   |   | 63 |   |
| Energy purchases from affiliate                     |   |   | 64 |   |   |   | 411 |   |   |   | 179 |   |   |   | 908 |   |
| Other operation and maintenance                     |   |   | 131 |   |   |   | 98 |   |   |   | 251 |   |   |   | 204 |   |
| Amortization of recoverable transition costs        |   |   |   |   |   |   | 70 |   |   |   |   |   |   |   | 154 |   |
| Depreciation                                        |   |   | 33 |   |   |   | 30 |   |   |   | 67 |   |   |   | 63 |   |
| Taxes, other than income                            |   |   | 29 |   |   |   | 46 |   |   |   | 76 |   |   |   | 98 |   |
| Total Operating Expenses                            |   |   | 466 |   |   |   | 686 |   |   |   | 1,192 |   |   |   | 1,490 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income                                    |   |   | 56 |   |   |   | 61 |   |   |   | 143 |   |   |   | 167 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expense) - net                        |   |   | 2 |   |   |   |   |   |   |   | 3 |   |   |   | 2 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Income from Affiliate                      |   |   |   |   |   |   | 1 |   |   |   | 1 |   |   |   | 3 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense                                    |   |   | 24 |   |   |   | 31 |   |   |   | 50 |   |   |   | 60 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Before Income Taxes                          |   |   | 34 |   |   |   | 31 |   |   |   | 97 |   |   |   | 112 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Taxes                                        |   |   | 11 |   |   |   | 10 |   |   |   | 32 |   |   |   | 37 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                          |   |   | 23 |   |   |   | 21 |   |   |   | 65 |   |   |   | 75 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributions on Preferred Securities               |   |   | 7 |   |   |   | 4 |   |   |   | 12 |   |   |   | 9 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income Available to PPL Corporation             |   | $ | 16 |   |   | $ | 17 |   |   | $ | 53 |   |   | $ | 66 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                              |
|------------------------------------------------------------------------------|
| PPL Electric Utilities Corporation and Subsidiaries                          |
| (Unaudited)                                                                  |
| (Millions of Dollars)                                                        |
|                                                                         |   | Six Months EndedJune 30, |
|                                                                         |   | 2010 |   | 2009 |
|                                                                         |   |   |   |   |   |   |   |   |
| Cash Flows from Operating Activities                                         |   |   |   |   |   |   |   |   |
| Net income                                                                   |   | $ | 65 |   |   | $ | 75 |   |
| Adjustments to reconcile net income to net cash used in operating activities |   |   |   |   |   |   |   |   |
| Depreciation                                                                 |   |   | 67 |   |   |   | 63 |   |
| Amortization                                                                 |   |   | 35 |   |   |   | 163 |   |
| Defined benefit plans - expense                                              |   |   | 11 |   |   |   | 13 |   |
| Defined benefit plans - funding                                              |   |   | (44 | ) |   |   |   |   |
| Deferred income taxes and investment tax credits                             |   |   | 29 |   |   |   | (82 | ) |
| Other                                                                        |   |   | 9 |   |   |   | 4 |   |
| Change in current assets and current liabilities                             |   |   |   |   |   |   |   |   |
| Accounts receivable                                                          |   |   | (40 | ) |   |   | (7 | ) |
| Accounts payable                                                             |   |   | (29 | ) |   |   | (61 | ) |
| Unbilled revenue                                                             |   |   | 77 |   |   |   | 44 |   |
| Prepayments                                                                  |   |   | (98 | ) |   |   | (108 | ) |
| Taxes                                                                        |   |   | (34 | ) |   |   | (17 | ) |
| Collateral on PLR energy supply from affiliate                               |   |   |   |   |   |   | (221 | ) |
| Other                                                                        |   |   | (44 | ) |   |   | 29 |   |
| Other operating activities                                                   |   |   |   |   |   |   |   |   |
| Other assets                                                                 |   |   | (23 | ) |   |   | 1 |   |
| Other liabilities                                                            |   |   | (8 | ) |   |   | 13 |   |
| Net cash used in operating activities                                        |   |   | (27 | ) |   |   | (91 | ) |
|                                                                         |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                         |   |   |   |   |   |   |   |   |
| Expenditures for property, plant and equipment                               |   |   | (145 | ) |   |   | (125 | ) |
| Net decrease in note receivable from affiliate                               |   |   |   |   |   |   | 221 |   |
| Other investing activities                                                   |   |   | (3 | ) |   |   |   |   |
| Net cash provided by (used in) investing activities                          |   |   | (148 | ) |   |   | 96 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                         |   |   |   |   |   |   |   |   |
| Issuance of long-term debt                                                   |   |   |   |   |   |   | 298 |   |
| Retirement of long-term debt                                                 |   |   |   |   |   |   | (9 | ) |
| Contributions from PPL                                                       |   |   | 55 |   |   |   |   |   |
| Redemption of preferred stock                                                |   |   | (54 | ) |   |   |   |   |
| Payment of common stock dividends to PPL                                     |   |   | (40 | ) |   |   | (148 | ) |
| Net decrease in short-term debt                                              |   |   |   |   |   |   | (95 | ) |
| Dividends on preferred securities                                            |   |   | (9 | ) |   |   | (9 | ) |
| Other financing activities                                                   |   |   |   |   |   |   | (5 | ) |
| Net cash provided by (used in) financing activities                          |   |   | (48 | ) |   |   | 32 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash and Cash Equivalents                         |   |   | (223 | ) |   |   | 37 |   |
| Cash and Cash Equivalents at Beginning of Period                             |   |   | 485 |   |   |   | 483 |   |
| Cash and Cash Equivalents at End of Period                                   |   | $ | 262 |   |   | $ | 520 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED BALANCE SHEETS                               |
|---------------------------------------------------------------------|
| PPL Electric Utilities Corporation and Subsidiaries                 |
| (Unaudited)                                                         |
| (Millions of Dollars, shares in thousands)                          |
|                                                                |   | June 30,2010 |   | December 31,2009 |
| Assets                                                              |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |
| Current Assets                                                      |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                           |   | $ | 262 |   |   | $ | 485 |   |
| Restricted cash and cash equivalents                                |   |   | 3 |   |   |   | 1 |   |
| Accounts receivable (less reserve:  2010, $17, 2009, $16) |   |   |   |   |   |   |   |   |
| Customer                                                            |   |   | 281 |   |   |   | 240 |   |
| Other                                                               |   |   | 20 |   |   |   | 19 |   |
| Unbilled revenues                                                   |   |   | 121 |   |   |   | 198 |   |
| Materials and supplies                                              |   |   | 34 |   |   |   | 33 |   |
| Accounts receivable from affiliates                                 |   |   | 5 |   |   |   | 7 |   |
| Prepayments                                                         |   |   | 122 |   |   |   | 24 |   |
| Other current assets                                                |   |   | 28 |   |   |   | 29 |   |
| Total Current Assets                                                |   |   | 876 |   |   |   | 1,036 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Property, Plant and Equipment                                       |   |   |   |   |   |   |   |   |
| Electric plant                                                      |   |   |   |   |   |   |   |   |
| Transmission and distribution                                       |   |   | 4,731 |   |   |   | 4,662 |   |
| General                                                             |   |   | 554 |   |   |   | 535 |   |
| Electric plant in service                                           |   |   | 5,285 |   |   |   | 5,197 |   |
| Construction work in progress                                       |   |   | 148 |   |   |   | 118 |   |
| Electric plant                                                      |   |   | 5,433 |   |   |   | 5,315 |   |
| Other property                                                      |   |   | 2 |   |   |   | 2 |   |
| Property, plant and equipment, gross                                |   |   | 5,435 |   |   |   | 5,317 |   |
| Less:  accumulated depreciation                           |   |   | 2,054 |   |   |   | 2,008 |   |
| Property, Plant and Equipment, net                                  |   |   | 3,381 |   |   |   | 3,309 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Regulatory and Other Noncurrent Assets                              |   |   |   |   |   |   |   |   |
| Intangibles                                                         |   |   | 141 |   |   |   | 139 |   |
| Taxes recoverable through future rates                              |   |   | 255 |   |   |   | 253 |   |
| Recoverable costs of defined benefit plans                          |   |   | 228 |   |   |   | 229 |   |
| Other regulatory and noncurrent assets                              |   |   | 121 |   |   |   | 126 |   |
| Total Regulatory and Other Noncurrent Assets                        |   |   | 745 |   |   |   | 747 |   |
|                                                                |   |   |   |   |   |   |   |   |
| Total Assets                                                        |   | $ | 5,002 |   |   | $ | 5,092 |   |

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED BALANCE SHEETS                   |
|---------------------------------------------------------|
| PPL Electric Utilities Corporation and Subsidiaries     |
| (Unaudited)                                             |
| (Millions of Dollars, shares in thousands)              |
|                                                    |   | June 30,2010 |   | December 31,2009 |
| Liabilities and Equity                                  |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| Current Liabilities                                     |   |   |   |   |   |   |   |   |
| Accounts payable                                        |   | $ | 152 |   |   | $ | 53 |   |
| Accounts payable to affiliates                          |   |   | 60 |   |   |   | 186 |   |
| Taxes                                                   |   |   | 27 |   |   |   | 61 |   |
| Interest                                                |   |   | 19 |   |   |   | 18 |   |
| Overcollected transmission costs                        |   |   | 27 |   |   |   | 39 |   |
| Customer rate mitigation prepayments                    |   |   | 24 |   |   |   | 36 |   |
| Overcollected transition costs                          |   |   | 25 |   |   |   | 33 |   |
| Other current liabilities                               |   |   | 88 |   |   |   | 92 |   |
| Total Current Liabilities                               |   |   | 422 |   |   |   | 518 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Long-term Debt                                          |   |   | 1,472 |   |   |   | 1,472 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Deferred Credits and Other Noncurrent Liabilities       |   |   |   |   |   |   |   |   |
| Deferred income taxes and investment tax credits        |   |   | 794 |   |   |   | 769 |   |
| Accrued pension obligations                             |   |   | 205 |   |   |   | 245 |   |
| Other deferred credits and noncurrent liabilities       |   |   | 196 |   |   |   | 192 |   |
| Total Deferred Credits and Other Noncurrent Liabilities |   |   | 1,195 |   |   |   | 1,206 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Commitments and Contingent Liabilities (Note 10)        |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   |   |
| Shareowners' Equity                                     |   |   |   |   |   |   |   |   |
| Preferred securities                                    |   |   | 250 |   |   |   | 301 |   |
| Common stock - no par value (a)                         |   |   | 364 |   |   |   | 364 |   |
| Additional paid-in capital                              |   |   | 879 |   |   |   | 824 |   |
| Earnings reinvested                                     |   |   | 420 |   |   |   | 407 |   |
| Total Shareowners' Equity                               |   |   | 1,913 |   |   |   | 1,896 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Total Liabilities and Equity                            |   | $ | 5,002 |   |   | $ | 5,092 |   |

| (a) |   | 170,000 shares authorized; 66,368 shares issued and outstanding at June 30, 2010 and December 31, 2009. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------|

| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |
|-------------------------------------------------------------------------------------------------------------------------|

----

| CONDENSED CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY |
|----------------------------------------------------------|
| PPL Electric Utilities Corporation and Subsidiaries      |
| (Unaudited)                                              |
| (Millions of Dollars)                                    |
|                                                     |   | Common stock shares outstanding (a) |   | Preferred securities |   | Common stock |   | Additional paid-in capital |   | Earnings reinvested |   | Total |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2010                                      |   | 66,368 |   |   | $ | 301 |   |   | $ | 364 |   |   | $ | 824 |   |   | $ | 427 |   |   | $ | 1,916 |   |
| Net income (b)                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 23 |   |   |   | 23 |   |
| Redemption of preferred stock (c)                        |   |   |   |   |   | (51 | ) |   |   |   |   |   |   |   |   |   |   | (3 | ) |   |   | (54 | ) |
| Capital contributions from PPL                           |   |   |   |   |   |   |   |   |   |   |   |   |   | 55 |   |   |   |   |   |   |   | 55 |   |
| Cash dividends declared on preferred securities          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4 | ) |   |   | (4 | ) |
| Cash dividends declared on common stock                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (23 | ) |   |   | (23 | ) |
| June 30, 2010                                            |   | 66,368 |   |   | $ | 250 |   |   | $ | 364 |   |   | $ | 879 |   |   | $ | 420 |   |   | $ | 1,913 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                                   |   | 66,368 |   |   | $ | 301 |   |   | $ | 364 |   |   | $ | 824 |   |   | $ | 407 |   |   | $ | 1,896 |   |
| Net income (b)                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 65 |   |   |   | 65 |   |
| Redemption of preferred stock (c)                        |   |   |   |   |   | (51 | ) |   |   |   |   |   |   |   |   |   |   | (3 | ) |   |   | (54 | ) |
| Capital contributions from PPL                           |   |   |   |   |   |   |   |   |   |   |   |   |   | 55 |   |   |   |   |   |   |   | 55 |   |
| Cash dividends declared on preferred securities          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (9 | ) |   |   | (9 | ) |
| Cash dividends declared on common stock                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (40 | ) |   |   | (40 | ) |
| June 30, 2010                                            |   | 66,368 |   |   | $ | 250 |   |   | $ | 364 |   |   | $ | 879 |   |   | $ | 420 |   |   | $ | 1,913 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2009                                      |   | 66,368 |   |   | $ | 301 |   |   | $ | 364 |   |   | $ | 424 |   |   | $ | 581 |   |   | $ | 1,670 |   |
| Net income (b)                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 21 |   |   |   | 21 |   |
| Cash dividends declared on preferred securities          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4 | ) |   |   | (4 | ) |
| Cash dividends declared on common stock                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (123 | ) |   |   | (123 | ) |
| June 30, 2009                                            |   | 66,368 |   |   | $ | 301 |   |   | $ | 364 |   |   | $ | 424 |   |   | $ | 475 |   |   | $ | 1,564 |   |
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008                                   |   | 66,368 |   |   | $ | 301 |   |   | $ | 364 |   |   | $ | 424 |   |   | $ | 557 |   |   | $ | 1,646 |   |
| Net income (b)                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 75 |   |   |   | 75 |   |
| Cash dividends declared on preferred securities          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (9 | ) |   |   | (9 | ) |
| Cash dividends declared on common stock                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (148 | ) |   |   | (148 | ) |
| June 30, 2009                                            |   | 66,368 |   |   | $ | 301 |   |   | $ | 364 |   |   | $ | 424 |   |   | $ | 475 |   |   | $ | 1,564 |   |

| (a)                                                                                                                     |   | Shares in thousands. All common shares of PPL Electric stock are owned by PPL.                                         |
|-------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------|
| (b)                                                                                                                     |   | PPL Electric's net income approximates comprehensive income.                                                                |
| (c)                                                                                                                     |   | PPL Electric redeemed all five series of its outstanding preferred stock.  See Note 7 for additional information. |
|                                                                                                                    |
| The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of the financial statements. |

----

| 1.   | Interim Financial Statements |
|----------------|------------------------------|

| 2.   | Summary of Significant Accounting Policies |
|----------------|--------------------------------------------|

| · | eliminates the concept of a qualifying special-purpose entity (QSPE); therefore, QSPEs will be subject to consolidation guidance;                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | changes the requirements for the derecognition of financial assets;                                                                                         |
| · | establishes new criteria for reporting the transfer of a portion of a financial asset as a sale;                                                            |
| · | requires transferors to initially recognize, at fair value, assets obtained and liabilities incurred as a result of a transfer accounted for as a sale; and |
| · | requires enhanced disclosures to improve the transparency around transfers of financial assets and a transferor's continuing involvement.                   |

| · | prescribes a qualitative approach focused on identifying which entity has the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | requires ongoing assessments of whether an entity is the primary beneficiary of a VIE;                                                                                                                                                                                                                                       |
| · | requires enhanced disclosures to improve the transparency of an entity's involvement in a VIE;                                                                                                                                                                                                                               |
| · | requires that all previous consolidation conclusions be reconsidered; and                                                                                                                                                                                                                                                    |
| · | requires that QSPEs be evaluated for consolidation (resulting from the elimination of the QSPE concept in the guidance addressing accounting for transfers of financial assets).                                                                                                                                             |

| · | requires disclosures be provided for each class of assets and liabilities, with class determined on the basis of the nature and risks of the assets and liabilities;             |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | clarifies that a description of valuation techniques and inputs used to measure fair value is required for Level 2 and 3 recurring and nonrecurring fair value measurements; and |
| · | for recurring fair value measurements, requires separate disclosure of significant transfers into and out of levels and the reasons for those transfers.                         |

| · | requires that the cumulative gain or loss on the derivative that is used to determine the maximum amount of gain or loss that may be reflected in AOCI exclude the gains or losses that occurred during the period when hedge accounting was not permitted; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | requires that the cumulative change in the expected future cash flows on the hedged transaction exclude the changes related to the period when hedge accounting was not applied.                                                                                |

| 3.   | Segment and Related Information |
|----------------|---------------------------------|

|                                  |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|---------------------------------------|--------|----------------------------------|--------|--------------------------------|
| PPL                                   |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| Income Statement Data                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues from external customers      |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Supply (a)                            |   | $                                | 803    |                           |   | $ | 781 |   |   | $ | 2,811 |   |   | $ | 2,052 |   |
| International Delivery                |   |                             | 178    |                           |   |   | 163 |   |   |   | 391 |   |   |   | 346 |   |
| Pennsylvania Delivery                 |   |                             | 522    |                           |   |   | 727 |   |   |   | 1,334 |   |   |   | 1,617 |   |
| Revenues from external customers      |   | $                                | 1,503  |                           |   | $ | 1,671 |   |   | $ | 4,536 |   |   | $ | 4,015 |   |
| Intersegment revenues (b)             |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Supply                                |   | $                                | 64     |                           |   | $ | 411 |   |   | $ | 179 |   |   | $ | 908 |   |
| Pennsylvania Delivery                 |   |                             |   |                           |   |   | 20 |   |   |   | 1 |   |   |   | 40 |   |
|                                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (Loss) Attributable to PPL |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Supply (a) (c)                        |   | $                                | 30     |                           |   | $ | (86 | ) |   | $ | 167 |   |   | $ | 19 |   |
| International Delivery                |   |                             | 58     |                           |   |   | 62 |   |   |   | 134 |   |   |   | 149 |   |
| Pennsylvania Delivery                 |   |                             | 16     |                           |   |   | 17 |   |   |   | 53 |   |   |   | 66 |   |
| Unallocated Costs                     |   |                             | (19    | )                              |   |   |   |   |   |   | (19 | ) |   |   |   |   |
| Net income (loss) attributable to PPL |   | $                                | 85     |                           |   | $ | (7 | ) |   | $ | 335 |   |   | $ | 234 |   |

|                   |   | June 30, 2010 |   | December 31, 2009 |
|------------------------|--------|--------------------|--------|------------------------|
| Balance Sheet Data     |   |               |   |                   |   |   |   |   |
| Assets                 |   |               |   |                   |   |   |   |   |
| Supply                 |   | $                  | 16,566 |                   |   | $ | 12,766 |   |
| International Delivery |   |               | 4,348  |                   |   |   | 4,516 |   |
| Pennsylvania Delivery  |   |               | 4,947  |                   |   |   | 4,883 |   |
| Unallocated Assets     |   |               | 52     |                   |   |   |   |   |
| Total assets           |   | $                  | 25,913 |                   |   | $ | 22,165 |   |

|                                                |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-----------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
| PPL Energy Supply                                   |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| Income Statement Data                               |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues from external customers                    |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Supply (a)                                          |   | $                                | 865    |                           |   | $ | 1,191 |   |   | $ | 2,986 |   |   | $ | 2,957 |   |
| International Delivery                              |   |                             | 178    |                           |   |   | 163 |   |   |   | 391 |   |   |   | 346 |   |
| Revenues from external customers                    |   | $                                | 1,043  |                           |   | $ | 1,354 |   |   | $ | 3,377 |   |   | $ | 3,303 |   |
| Net Income (Loss) Attributable to PPL Energy Supply |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Supply (a) (c)                                      |   | $                                | 28     |                           |   | $ | (93 | ) |   | $ | 152 |   |   | $ | 11 |   |
| International Delivery                              |   |                             | 58     |                           |   |   | 62 |   |   |   | 134 |   |   |   | 149 |   |
| Net income (loss) attributable to PPL Energy Supply |   | $                                | 86     |                           |   | $ | (31 | ) |   | $ | 286 |   |   | $ | 160 |   |

|                   |   | June 30, 2010 |   | December 31, 2009 |
|------------------------|--------|--------------------|--------|------------------------|
| Balance Sheet Data     |   |               |   |                   |   |   |   |   |
| Assets                 |   |               |   |                   |   |   |   |   |
| Supply                 |   | $                  | 16,289 |                   |   | $ | 12,508 |   |
| International Delivery |   |               | 4,348  |                   |   |   | 4,516 |   |
| Total assets           |   | $                  | 20,637 |                   |   | $ | 17,024 |   |

| (a) |   | Includes impact from energy-related economic activity.  See "Commodity Price Risk (Non-trading) - Economic Activity" in Note 14 for additional information.                                                                                               |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | See "PLR Contracts" and "NUG Purchases" in Note 11 for a discussion of the basis of accounting between reportable segments.                                                                                                                                         |
| (c) |   | Both periods in 2009 include the results of the Long Island generation business and the majority of PPL Maine's hydroelectric generation business, both of which have been classified as Discontinued Operations.  See Note 8 for additional information. |

| 4.   | Earnings Per Share |
|----------------|--------------------|

|                                                                                     |   | Three Months Ended June 30, |    | Six Months Ended June 30, |
|------------------------------------------------------------------------------------------|--------|----------------------------------|---------|--------------------------------|
|                                                                                     |   | 2010                             |    | 2009                           |   | 2010 |   | 2009 |
| Income (Numerator)                                                                       |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations after income taxes attributable to PPL                 |   | $                                | 85      |                           |   | $ | 25 |   |   | $ | 335 |   |   | $ | 263 |   |
| Less amounts allocated to participating securities                                       |   |                             |    |                           |   |   |   |   |   |   | 1 |   |   |   | 1 |   |
| Income from continuing operations after income taxes available to PPL common shareowners |   | $                                | 85      |                           |   | $ | 25 |   |   | $ | 334 |   |   | $ | 262 |   |
|                                                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from discontinued operations (net of income taxes) available to PPL                 |   |                             |    |                           |   | $ | (32 | ) |   |   |   |   |   | $ | (29 | ) |
|                                                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to PPL                                                    |   | $                                | 85      |                           |   | $ | (7 | ) |   | $ | 335 |   |   | $ | 234 |   |
| Less amounts allocated to participating securities                                       |   |                             |    |                           |   |   |   |   |   |   | 1 |   |   |   | 1 |   |
| Net income (loss) available to PPL common shareowners                                    |   | $                                | 85      |                           |   | $ | (7 | ) |   | $ | 334 |   |   | $ | 233 |   |
|                                                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares of Common Stock (Denominator)                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average shares - Basic EPS                                                      |   |                             | 381,896 |                           |   |   | 375,881 |   |   |   | 379,810 |   |   |   | 375,493 |   |
| Add incremental non-participating securities:                                       |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options and performance units                                                      |   |                             | 179     |                           |   |   | 325 |   |   |   | 224 |   |   |   | 312 |   |
| Weighted-average shares - Diluted EPS                                                    |   |                             | 382,075 |                           |   |   | 376,206 |   |   |   | 380,034 |   |   |   | 375,805 |   |
|                                                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic EPS                                                                                |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Available to PPL common shareowners:                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations after income taxes                                     |   | $                                | 0.22    |                           |   | $ | 0.07 |   |   | $ | 0.88 |   |   | $ | 0.70 |   |
| Loss from discontinued operations (net of income taxes)                                  |   |                             |    |                           |   |   | (0.09 | ) |   |   |   |   |   |   | (0.08 | ) |
| Net Income (Loss)                                                                        |   | $                                | 0.22    |                           |   | $ | (0.02 | ) |   | $ | 0.88 |   |   | $ | 0.62 |   |
|                                                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted EPS                                                                              |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Available to PPL common shareowners:                                                     |   |                             |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations after income taxes                                     |   | $                                | 0.22    |                           |   | $ | 0.07 |   |   | $ | 0.88 |   |   | $ | 0.70 |   |
| Loss from discontinued operations (net of income taxes)                                  |   |                             |    |                           |   |   | (0.09 | ) |   |   |   |   |   |   | (0.08 | ) |
| Net Income (Loss)                                                                        |   | $                                | 0.22    |                           |   | $ | (0.02 | ) |   | $ | 0.88 |   |   | $ | 0.62 |   |

|                  |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-----------------------|--------|----------------------------------|--------|--------------------------------|
| (Shares in thousands) |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options         |   |                             | 5,184  |                           |   |   | 1,636 |   |   |   | 4,669 |   |   |   | 2,142 |   |
| Performance units     |   |                             | 105    |                           |   |   |   |   |   |   | 91 |   |   |   | 1 |   |

| 5.   | Income Taxes |
|----------------|--------------|

|                                                                                                           |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|----------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                                                                           |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| Reconciliation of Income Taxes                                                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35% |   | $                                | 36     |                           |   | $ | (1 | ) |   | $ | 172 |   |   | $ | 119 |   |
| Increase (decrease) due to:                                                                                    |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| State income taxes                                                                                             |   |                             | 1      |                           |   |   | (6 | ) |   |   | 16 |   |   |   | (1 | ) |
| State net operating loss valuation allowance                                                                   |   |                             |   |                           |   |   |   |   |   |   | (8 | ) |   |   |   |   |
| Impact of lower U.K. income tax rates                                                                          |   |                             | (4     | )                              |   |   | (3 | ) |   |   | (8 | ) |   |   | (10 | ) |
| U.S. income tax on foreign earnings, net of foreign tax credit                                                 |   |                             | (7     | )                              |   |   |   |   |   |   | (6 | ) |   |   | (2 | ) |
| Change in federal and state tax reserves                                                                       |   |                             | 1      |                           |   |   | (1 | ) |   |   | (7 | ) |   |   | 7 |   |
| Change in foreign tax reserves (a)                                                                             |   |                             | 22     |                           |   |   | (15 | ) |   |   | 22 |   |   |   | (29 | ) |
| Domestic manufacturing deduction                                                                               |   |                             | (8     | )                              |   |   | (2 | ) |   |   | (12 | ) |   |   | (7 | ) |
| Health Care Reform (b)                                                                                         |   |                             |   |                           |   |   |   |   |   |   | 8 |   |   |   |   |   |
| Foreign losses generated through restructuring (a)                                                             |   |                             | (25    | )                              |   |   |   |   |   |   | (25 | ) |   |   |   |   |
| Other                                                                                                          |   |                             | (4     | )                              |   |   | (3 | ) |   |   | (9 | ) |   |   | (10 | ) |
| Total decrease                                                                                                 |   |                             | (24    | )                              |   |   | (30 | ) |   |   | (29 | ) |   |   | (52 | ) |
| Total income taxes from continuing operations                                                                  |   | $                                | 12     |                           |   | $ | (31 | ) |   | $ | 143 |   |   | $ | 67 |   |

| (a) |   | During the three and six months ended June 30, 2010, PPL recorded a $25 million foreign tax benefit and a related $22 million foreign tax reserve related to losses generated by a U.K. restructuring.                                                                                                                                                                                                       |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Beginning in 2013, provisions within Health Care Reform eliminated the tax deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D Coverage.  As a result, PPL recorded deferred income tax expense in March 2010.  See Note 9 for additional information. |

|                                                                                                           |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|----------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                                                                           |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| Reconciliation of Income Taxes                                                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal income tax on Income (Loss) from Continuing Operations Before Income Taxes at statutory tax rate - 35% |   | $                                | 35     |                           |   | $ | (14 | ) |   | $ | 145 |   |   | $ | 75 |   |
| Increase (decrease) due to:                                                                                    |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| State income taxes                                                                                             |   |                             | 2      |                           |   |   | (3 | ) |   |   | 15 |   |   |   | 2 |   |
| Impact of lower U.K. income tax rates                                                                          |   |                             | (4     | )                              |   |   | (3 | ) |   |   | (8 | ) |   |   | (10 | ) |
| U.S. income tax on foreign earnings, net of foreign tax credit                                                 |   |                             | (7     | )                              |   |   |   |   |   |   | (6 | ) |   |   | (2 | ) |
| Change in federal and state tax reserves                                                                       |   |                             | 4      |                           |   |   |   |   |   |   | (3 | ) |   |   | 3 |   |
| Change in foreign tax reserves (a)                                                                             |   |                             | 22     |                           |   |   | (15 | ) |   |   | 22 |   |   |   | (29 | ) |
| Domestic manufacturing deduction                                                                               |   |                             | (8     | )                              |   |   | (2 | ) |   |   | (12 | ) |   |   | (7 | ) |
| Health Care Reform (b)                                                                                         |   |                             |   |                           |   |   |   |   |   |   | 5 |   |   |   |   |   |
| Foreign losses generated through restructuring (a)                                                             |   |                             | (25    | )                              |   |   |   |   |   |   | (25 | ) |   |   |   |   |
| Other                                                                                                          |   |                             | (4     | )                              |   |   | (4 | ) |   |   | (6 | ) |   |   | (8 | ) |
| Total decrease                                                                                                 |   |                             | (20    | )                              |   |   | (27 | ) |   |   | (18 | ) |   |   | (51 | ) |
| Total income taxes from continuing operations                                                                  |   | $                                | 15     |                           |   | $ | (41 | ) |   | $ | 127 |   |   | $ | 24 |   |

| (a) |   | During the three and six months ended June 30, 2010, PPL Energy Supply recorded a $25 million foreign tax benefit and a related $22 million foreign tax reserve related to losses generated by a U.K. restructuring.                                                                                                                                                                                                       |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Beginning in 2013, provisions within Health Care Reform eliminated the tax deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D Coverage.  As a result, PPL Energy Supply recorded deferred income tax expense in March 2010.  See Note 9 for additional information. |

|                                                                         |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|------------------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                                         |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| Reconciliation of Income Taxes                                          |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal income tax on Income Before Income Taxes at statutory tax rate - 35% |   | $                                | 12     |                           |   | $ | 11 |   |   | $ | 34 |   |   | $ | 39 |   |
| Increase (decrease) due to:                                                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| State income taxes                                                           |   |                             | 1      |                           |   |   | 1 |   |   |   | 4 |   |   |   | 4 |   |
| Amortization of investment tax credit                                        |   |                             |   |                           |   |   |   |   |   |   | (1 | ) |   |   | (1 | ) |
| Change in federal and state tax reserves                                     |   |                             | (2     | )                              |   |   | (1 | ) |   |   | (4 | ) |   |   | (3 | ) |
| Other                                                                        |   |                             |   |                           |   |   | (1 | ) |   |   | (1 | ) |   |   | (2 | ) |
| Total decrease                                                               |   |                             | (1     | )                              |   |   | (1 | ) |   |   | (2 | ) |   |   | (2 | ) |
| Total income taxes                                                           |   | $                                | 11     |                           |   | $ | 10 |   |   | $ | 32 |   |   | $ | 37 |   |

|                                                          |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|---------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                          |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| PPL                                                           |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning of period                                           |   | $                                | 201    |                           |   | $ | 187 |   |   | $ | 212 |   |   | $ | 202 |   |
| Additions based on tax positions of prior years               |   |                             | 2      |                           |   |   |   |   |   |   | 4 |   |   |   | 14 |   |
| Reductions based on tax positions of prior years              |   |                             |   |                           |   |   |   |   |   |   | (6 | ) |   |   |   |   |
| Additions based on tax positions related to the current year  |   |                             | 30     |                           |   |   |   |   |   |   | 30 |   |   |   | 3 |   |
| Reductions based on tax positions related to the current year |   |                             | (5     | )                              |   |   |   |   |   |   | (5 | ) |   |   |   |   |
| Settlements                                                   |   |                             |   |                           |   |   | (14 | ) |   |   | (1 | ) |   |   | (40 | ) |
| Lapse of applicable statutes of limitations                   |   |                             | (2     | )                              |   |   | (2 | ) |   |   | (4 | ) |   |   | (4 | ) |
| Effects of foreign currency translation                       |   |                             | (2     | )                              |   |   | 2 |   |   |   | (6 | ) |   |   | (2 | ) |
| End of period                                                 |   | $                                | 224    |                           |   | $ | 173 |   |   | $ | 224 |   |   | $ | 173 |   |
|                                                          |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |

| PPL Energy Supply                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Beginning of period                                           |   | $      | 115    |   |   | $      | 94     |   |   | $      | 124    |   |   | $      | 119    |   |
| Additions based on tax positions of prior years               |   |   | 2      |   |   |   |   |   |   |   | 2      |   |   |   | 2      |   |
| Reductions based on tax positions of prior years              |   |   |   |   |   |   |   |   |   |   | (4)    |   |   |   |   |   |
| Additions based on tax positions related to the current year  |   |   | 30     |   |   |   |   |   |   |   | 30     |   |   |   | 3      |   |
| Reductions based on tax positions related to the current year |   |   | (3     | )      |   |   |   |   |   |   | (3     | )      |   |   |   |   |
| Settlements                                                   |   |   |   |   |   |   | (14    | )      |   |   | (1     | )      |   |   | (40    | )      |
| Effects of foreign currency translation                       |   |   | (2     | )      |   |   | 2      |   |   |   | (6     | )      |   |   | (2     | )      |
| End of period                                                 |   | $      | 142    |   |   | $      | 82     |   |   | $      | 142    |   |   | $      | 82     |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Electric                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning of period                                           |   | $      | 72     |   |   | $      | 82     |   |   | $      | 74     |   |   | $      | 77     |   |
| Additions based on tax positions of prior years               |   |   |   |   |   |   |   |   |   |   | 2      |   |   |   | 7      |   |
| Reductions based on tax positions of prior years              |   |   |   |   |   |   |   |   |   |   | (2     | )      |   |   |   |   |
| Reductions based on tax positions related to the current year |   |   | (2     | )      |   |   |   |   |   |   | (2     | )      |   |   |   |   |
| Lapse of applicable statutes of limitations                   |   |   | (2     | )      |   |   | (2     | )      |   |   | (4     | )      |   |   | (4     | )      |
| End of period                                                 |   | $      | 68     |   |   | $      | 80     |   |   | $      | 68     |   |   | $      | 80     |   |

|              |   | 2010   |   | 2009   |
|-------------------|--------|--------|--------|--------|
|              |   |   |   |   |   |   |
| PPL               |   | $      | 132    |   |   | $ | 114 |   |
| PPL Energy Supply |   |   | 112    |   |   |   | 88 |   |
| PPL Electric      |   |   | 11     |   |   |   | 18 |   |

|              |   | Three Months EndedJune 30, |   | Six Months EndedJune 30, |
|-------------------|--------|----------------------------|--------|--------------------------|
|              |   | 2010                       |   | 2009                     |   | 2010 |   | 2009 |
|              |   |                       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL               |   | $                          | 3      |                     |   | $ | (2 | ) |   | $ | 2 |   |   | $ | 2 |   |
| PPL Energy Supply |   |                       | 4      |                     |   |   | (2 | ) |   |   | 4 |   |   |   |   |   |
| PPL Electric      |   |                       | (1     | )                        |   |   |   |   |   |   | (1 | ) |   |   | (1 | ) |

| 6.   | Variable Interest Entities |
|----------------|----------------------------|

| 7.   | Financing Activities |
|----------------|----------------------|

|                                                        | Expiration Date |    | Capacity |   | Borrowed (a) |   | Letters of Credit Issued |   | Unused Capacity |
|-------------------------------------------------------------|-----------------|---------|----------|--------|--------------|--------|--------------------------|--------|-----------------|
|                                                        |            |    |     |   |         |   |                     |   |            |   |   |   |   |   |   |   |   |   |   |
| PPL Energy Supply Domestic Credit Facilities                |            |    |     |   |         |   |                     |   |            |   |   |   |   |   |   |   |   |   |   |
| 364-day Syndicated Credit Facility (b) (c)                  |            | Sept-10 |     |   | $            | 400    |                     |   |            |   |   |   |   |   |   |   | $ | 400 |   |
| 5-year Structured Credit Facility (d)                       |            | Mar-11  |     |   |         | 300    |                     |   |            | n/a |   |   | $ | 280 |   |   |   | 20 |   |
| 5-year Syndicated Credit Facility (c) (e)                   |            | June-12 |     |   |         | 3,225  |                     |   | $               | 285 |   |   |   | 245 |   |   |   | 2,695 |   |
| 3-year Bilateral Credit Facility (f)                        |            | Mar-13  |     |   |         | 200    |                     |   |            | n/a |   |   |   | 4 |   |   |   | 196 |   |
| Total PPL Energy Supply Domestic Credit Facilities          |            |    |     |   | $            | 4,125  |                     |   | $               | 285 |   |   | $ | 529 |   |   | $ | 3,311 |   |
|                                                        |            |    |     |   |         |   |                     |   |            |   |   |   |   |   |   |   |   |   |   |
| WPD Credit Facilities                                       |            |    |     |   |         |   |                     |   |            |   |   |   |   |   |   |   |   |   |   |
| WPDH Limited 5-year Syndicated Credit Facility (g)     |            | Jan-13  |     |   | £       | 150    |                     |   | £          | 123 |   |   |   | n/a |   |   | £ | 27 |   |
| WPD (South West) 3-year Syndicated Credit Facility (h) |            | July-12 |     |   |         | 210    |                     |   |            |   |   |   |   | n/a |   |   |   | 210 |   |
| Uncommitted Credit Facilities                               |            |    |     |   |         | 63     |                     |   |            |   |   |   | £ | 3 |   |   |   | 60 |   |
| Total WPD Credit Facilities                                 |            |    |     |   | £       | 423    |                     |   | £          | 123 |   |   | £ | 3 |   |   | £ | 297 |   |

| (a)    |   | Amounts borrowed are recorded as "Short-term debt" on the Balance Sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (b)    |   | Under this facility, PPL Energy Supply has the ability to make cash borrowings and to request the lenders to issue up to $200 million of letters of credit.  Borrowings generally bear interest at LIBOR-based rates plus a spread, depending upon the company's public debt rating.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (c)    |   | In June 2010, PPL Energy Supply closed into escrow a new $4 billion syndicated credit facility, expiring December 31, 2014, that is intended to replace its 364-day Syndicated Credit Facility and 5-year Syndicated Credit Facility upon effectiveness.  Subject to certain conditions, the new credit facility will become effective on the earliest of (i) December 31, 2010, (ii) the date on which the acquisition of E.ON U.S. is completed by PPL, or (iii) the date on which the purchase and sale agreement relating to the acquisition of E.ON U.S. has been terminated or expired or such acquisition has otherwise been abandoned by PPL.  Upon effectiveness, PPL Energy Supply will have the ability to make cash borrowings and to request the lenders to issue letters of credit.  Borrowings will generally bear interest at LIBOR-based rates plus a spread, depending upon the company's public debt rating.  Similar to the existing facilities, the new credit facility contains a financial covenant requiring PPL Energy Supply's debt to total capitalization to not exceed 65% and other customary covenants.  Additionally under certain conditions, PPL Energy Supply may request that the facility's capacity be increased by up to $500 million.  At June 30, 2010, $40 million of deferred fees were accrued related to this facility. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (d)    |   | Under this facility, PPL Energy Supply has the ability to request the lenders to issue letters of credit but cannot make cash borrowings.  PPL Energy Supply's obligations under this facility are supported by a $300 million letter of credit issued on PPL Energy Supply's behalf under a separate, but related, $300 million five-year credit agreement, also expiring in March 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (e)    |   | Under this facility, PPL Energy Supply has the ability to make cash borrowings and to request the lenders to issue letters of credit.  Borrowings generally bear interest at LIBOR-based rates plus a spread, depending upon the company's public debt rating.  The borrowing outstanding at June 30, 2010 bears interest at 0.84% and was repaid by PPL Energy Supply in July 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (f)    |   | In March 2010, PPL Energy Supply's 364-day bilateral credit facility was amended.  The amendment included extending the expiration date to March 2013, thereby making it a three-year facility, and setting related fees based on the company's public debt rating.  Under this facility, PPL Energy Supply can request the bank to issue letters of credit but cannot make cash borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (g)    |   | Under this facility, WPDH Limited has the ability to make cash borrowings but cannot request the lenders to issue letters of credit.  Borrowings under this facility bear interest at LIBOR-based rates plus a spread, depending on the company's public debt rating.  The cash borrowing outstanding at June 30, 2010 was a USD-denominated borrowing of $181 million, which equated to £123 million at the time of borrowing and bears interest at approximately 0.94%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (h)    |   | Under this facility, WPD (South West) has the ability to make cash borrowings but cannot request the lenders to issue letters of credit.  Borrowings under this facility bear interest at LIBOR-based rates plus a margin.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|                                  | Expiration Date |    | Capacity |   | Borrowed |   | Letters of Credit Issued |   | Unused Capacity |
|---------------------------------------|-----------------|---------|----------|--------|----------|--------|--------------------------|--------|-----------------|
|                                  |            |    |     |   |     |   |                     |   |            |   |   |   |   |   |   |   |   |   |   |
| 5-year Syndicated Credit Facility (a) |            | May-12  |     |   | $        | 190    |                     |   |            |   |   |   | $ | 13 |   |   | $ | 177 |   |
| Asset-backed Credit Facility (b)      |            | July-10 |     |   |     | 150    |                     |   |            |   |   |   |   | n/a |   |   |   | 150 |   |
| Total PPL Electric Credit Facilities  |            |    |     |   | $        | 340    |                     |   |            |   |   |   | $ | 13 |   |   | $ | 327 |   |

| (a)    |   | Under this facility, PPL Electric has the ability to make cash borrowings and to request the lenders to issue letters of credit.  Borrowings generally bear interest at LIBOR-based rates plus a spread, depending upon the company's public debt rating. In June 2010, PPL Electric closed into escrow a new $200 million syndicated credit facility, expiring December 31, 2014, that is intended to replace its existing 5-year Syndicated Credit Facility upon effectiveness.  Subject to certain conditions, the new credit facility will become effective on the earliest of (i) December 31, 2010, (ii) the date on which the acquisition of E.ON U.S. is completed by PPL, or (iii) the date on which the purchase and sale agreement relating to the acquisition of E.ON U.S. has been terminated or expired or such acquisition has otherwise been abandoned by PPL.  Upon effectiveness, PPL Electric will have the ability to make cash borrowings and to request the lenders to issue letters of credit.  Borrowings will generally bear interest at LIBOR-based rates plus a spread, depending upon the company's public debt rating.  Similar to the existing facility, the new credit facility contains a financial covenant requiring PPL Electric's debt to total capitalization to not exceed 70% and other customary covenants.  Additionally, under certain conditions, PPL Electric may request that the facility's capacity be increased by up to $100 million.  At June 30, 2010, $2 million of deferred fees were accrued related to this facility. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (b)    |   | PPL Electric participates in an asset-backed commercial paper program through which PPL Electric obtains financing by selling and contributing its eligible accounts receivable and unbilled revenue to a special purpose, wholly owned subsidiary on an ongoing basis.  The subsidiary has pledged these assets to secure loans from a commercial paper conduit sponsored by a financial institution.  The subsidiary's borrowing costs under the credit facility vary based on the commercial paper conduit's actual cost to issue commercial paper that supports the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | At June 30, 2010 and December 31, 2009, $255 million and $223 million of accounts receivable and $102 million and $192 million of unbilled revenue were pledged by the subsidiary under the credit agreement related to PPL Electric's and the subsidiary's participation in the asset-backed commercial paper program.  Based on the accounts receivable and unbilled revenue pledged, $150 million was available for borrowing at June 30, 2010.  PPL Electric's sale to its subsidiary of the accounts receivable and unbilled revenue is an absolute sale of the assets, and PPL Electric does not retain an interest in these assets.  However, for financial reporting purposes, the subsidiary's financial results are consolidated in PPL Electric's financial statements.  PPL Electric performs certain record-keeping and cash collection functions with respect to the assets in return for a servicing fee from the subsidiary. In July 2010, PPL Electric and the subsidiary extended the expiration date of the credit agreement to July 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

| · | if the average VWAP equals or exceeds $28.80, then 1.7361 shares (a minimum of 39,930,300 shares);                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | if the average VWAP is less than $28.80 but greater than $24.00, a number of shares of common stock having a value, based on the average VWAP, equal to $50.00; and |
| · | if the average VWAP is less than or equal to $24.00, then 2.0833 shares (a maximum of 47,915,900 shares).                                                           |

| 8.   | Acquisitions, Development and Divestitures |
|----------------|--------------------------------------------|

|                                   |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|----------------------------------------|--------|-----------------------------|--------|---------------------------|
|                                   |   | 2010                        |   | 2009                      |   | 2010 |   | 2009 |
|                                   |   |                        |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenues                     |   |                        |   |                      |   | $ | 6 |   |   | $ | 4 |   |   | $ | 12 |   |
| Operating expenses (a)                 |   |                        |   |                      |   |   | 55 |   |   |   | 4 |   |   |   | 56 |   |
| Operating loss                         |   |                        |   |                      |   |   | (49 | ) |   |   |   |   |   |   | (44 | ) |
| Interest expense (b)                   |   |                        |   |                      |   |   | 1 |   |   |   |   |   |   |   | 2 |   |
| Loss before income taxes               |   |                        |   |                      |   |   | (50 | ) |   |   |   |   |   |   | (46 | ) |
| Income taxes                           |   |                        |   |                      |   |   | (18 | ) |   |   |   |   |   |   | (16 | ) |
| Loss from Discontinued Operations |   |                        |   |                      |   | $ | (32 | ) |   | $ |   |   |   | $ | (30 | ) |

| (a) |   | 2010 includes the loss on the sale of the business.  2009 includes the impairment charge.          |
|-----|--------|--------------------------------------------------------------------------------------------------------------|
| (b) |   | Represents allocated interest expense based upon debt attributable to PPL's Long Island generation business. |

|                                |   | Three Months Ended |   | Six Months Ended |
|-------------------------------------|--------|--------------------|--------|------------------|
|                                |   | June 30, 2009 |
|                                |   |               |   |             |   |   |   |   |
| Operating revenues                  |   | $                  | 1      |             |   | $ | 3 |   |
| Operating expenses                  |   |               | 1      |             |   |   | 2 |   |
| Operating income                    |   |               |   |             |   |   | 1 |   |
| Other income - net                  |   |               |   |             |   |   | 1 |   |
| Income before income taxes          |   |               |   |             |   |   | 2 |   |
| Income taxes                        |   |               |   |             |   |   | 1 |   |
| Income from Discontinued Operations |   | $                  |   |             |   | $ | 1 |   |

| 9.   | Defined Benefits |
|----------------|------------------|

|                                                                       |   | Pension Benefits                 |
|----------------------------------------------------------------------------|--------|----------------------------------|
|                                                                       |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|                                                                       |   | U.S.                             |   | U.K. |   | U.S. |   | U.K. |
|                                                                       |   | 2010                             |   | 2009 |   | 2010 (a) |   | 2009 |   | 2010 |   | 2009 |   | 2010 (a) |   | 2009 |
| PPL                                                                        |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                                               |   | $                                | 15 |   |   | $ | 15 |   |   | $ | 4 |   |   | $ | 2 |   |   | $ | 30 |   |   | $ | 30 |   |   | $ | 9 |   |   | $ | 4 |   |
| Interest cost                                                              |   |                             | 37 |   |   |   | 36 |   |   |   | 36 |   |   |   | 37 |   |   |   | 74 |   |   |   | 72 |   |   |   | 75 |   |   |   | 74 |   |
| Expected return on plan assets                                             |   |                             | (44 | ) |   |   | (42 | ) |   |   | (49 | ) |   |   | (45 | ) |   |   | (88 | ) |   |   | (84 | ) |   |   | (99 | ) |   |   | (90 | ) |
| Amortization of:                                                           |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transition asset                                                           |   |                             |   |   |   |   | (1 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (2 | ) |   |   |   |   |   |   |   |   |
| Prior service cost                                                         |   |                             | 5 |   |   |   | 5 |   |   |   | 1 |   |   |   | 1 |   |   |   | 10 |   |   |   | 10 |   |   |   | 2 |   |   |   | 2 |   |
| Actuarial loss                                                             |   |                             | 1 |   |   |   | 1 |   |   |   | 12 |   |   |   | 1 |   |   |   | 2 |   |   |   | 2 |   |   |   | 24 |   |   |   | 2 |   |
| Net periodic defined benefit costs (credits) prior to termination benefits |   |                             | 14 |   |   |   | 14 |   |   |   | 4 |   |   |   | (4 | ) |   |   | 28 |   |   |   | 28 |   |   |   | 11 |   |   |   | (8 | ) |
| Termination benefits (b)                                                   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 9 |   |   |   |   |   |   |   |   |   |
| Net periodic defined benefit costs (credits)                               |   | $                                | 14 |   |   | $ | 14 |   |   | $ | 4 |   |   | $ | (4 | ) |   | $ | 28 |   |   | $ | 37 |   |   | $ | 11 |   |   | $ | (8 | ) |
|                                                                       |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Energy Supply                                                          |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                                               |   | $                                | 1 |   |   | $ | 1 |   |   | $ | 4 |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 9 |   |   | $ | 4 |   |
| Interest cost                                                              |   |                             | 1 |   |   |   | 1 |   |   |   | 36 |   |   |   | 37 |   |   |   | 3 |   |   |   | 3 |   |   |   | 75 |   |   |   | 74 |   |
| Expected return on plan assets                                             |   |                             | (1 | ) |   |   | (1 | ) |   |   | (49 | ) |   |   | (45 | ) |   |   | (3 | ) |   |   | (3 | ) |   |   | (99 | ) |   |   | (90 | ) |
| Amortization of:                                                           |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prior service cost                                                         |   |                             |   |   |   |   |   |   |   |   | 1 |   |   |   | 1 |   |   |   |   |   |   |   |   |   |   |   | 2 |   |   |   | 2 |   |
| Actuarial loss                                                             |   |                             |   |   |   |   |   |   |   |   | 12 |   |   |   | 1 |   |   |   | 1 |   |   |   | 1 |   |   |   | 24 |   |   |   | 2 |   |
| Net periodic defined benefit costs (credits)                               |   | $                                | 1 |   |   | $ | 1 |   |   | $ | 4 |   |   | $ | (4 | ) |   | $ | 3 |   |   | $ | 3 |   |   | $ | 11 |   |   | $ | (8 | ) |

| (a) |   | Net periodic defined benefit costs reflect the impact of a March 2010 re-measurement of WPD's principal pension plan.  As a result of the re-measurement, projected net periodic defined benefit costs decreased by $10 million for 2010.  The decrease primarily resulted from an increase in the expected return on plan assets, which was adjusted to include $165 million of additional pension contributions. |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Relates to 2009 workforce reductions.  See "Separation Benefits" below for additional information.                                                                                                                                                                                                                                                                                                                           |

|                               |   | Other Postretirement Benefits    |
|------------------------------------|--------|----------------------------------|
|                               |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|                               |   | 2010                             |   | 2009 |   | 2010 |   | 2009 |
| PPL                                |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                       |   | $                                | 2 |   |   | $ | 2 |   |   | $ | 4 |   |   | $ | 3 |   |
| Interest cost                      |   |                             | 7 |   |   |   | 7 |   |   |   | 14 |   |   |   | 14 |   |
| Expected return on plan assets     |   |                             | (5 | ) |   |   | (4 | ) |   |   | (10 | ) |   |   | (8 | ) |
| Amortization of:                   |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transition obligation              |   |                             | 2 |   |   |   | 2 |   |   |   | 4 |   |   |   | 4 |   |
| Prior service cost                 |   |                             | 2 |   |   |   | 2 |   |   |   | 4 |   |   |   | 4 |   |
| Actuarial loss                     |   |                             | 1 |   |   |   |   |   |   |   | 2 |   |   |   | 1 |   |
| Net periodic defined benefit costs |   | $                                | 9 |   |   | $ | 9 |   |   | $ | 18 |   |   | $ | 18 |   |

|              |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------|--------|----------------------------------|--------|--------------------------------|
|              |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|              |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Energy Supply |   | $                                | 9      |                           |   | $ | 8 |   |   | $ | 18 |   |   | $ | 16 |   |
| PPL Electric      |   |                             | 7      |                           |   |   | 7 |   |   |   | 14 |   |   |   | 14 |   |

| · | PPL decreased deferred tax assets by $13 million, increased regulatory assets by $9 million, increased deferred tax liabilities by $4 million and recorded income tax expense of $8 million; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | PPL Energy Supply decreased deferred tax assets by $5 million and recorded income tax expense of $5 million; and                                                                             |
| · | PPL Electric decreased deferred tax assets by $5 million, increased regulatory assets by $9 million and increased deferred tax liabilities by $4 million.                                    |

| · | an excise tax, beginning in 2018, imposed on high-cost plans providing health coverage that exceeds certain thresholds; |
|--------|-------------------------------------------------------------------------------------------------------------------------|
| · | a requirement to extend dependent coverage up to age 26; and                                                            |
| · | broadening the eligibility requirements under the Federal Black Lung Act.                                               |

| 10.   | Commitments and Contingencies |
|-----------------|-------------------------------|

|                                                                                       |   | Exposure at June 30,  2010 (a) |   | ExpirationDate |   | Description |
|--------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|----------------|--------|-------------|
| PPL                                                                                        |   |                                     |   |           |   |        |   |   |   |   |
| Indemnifications for sale of PPL Gas Utilities                                             |   | $                                        | 300    |           |   |        |   |   |   | PPL has provided indemnification to the purchaser of PPL Gas Utilities and Penn Fuel Propane, LLC for damages arising out of any breach of the representations, warranties and covenants under the related transaction agreement and for damages arising out of certain other matters, including certain pre-closing unknown environmental liabilities relating to former manufactured gas plant properties or off-site disposal sites, if any, outside of Pennsylvania.  The indemnification provisions for most representations and warranties, including tax and environmental matters, are capped at $45 million, in the aggregate, and are triggered (i) only if the individual claim exceeds $50,000, and (ii) only if, and only to the extent that, in the aggregate, total claims exceed $4.5 million.  The indemnification provisions for most representations and warranties expired on September 30, 2009 without any claims having been made.  Certain representations and warranties, including those having to do with transaction authorization and title, survive indefinitely, are capped at the purchase price and are not subject to the above threshold or deductible.  The indemnification provision for the tax matters representations survives for the duration of the applicable statute of limitations, and the indemnification provision for the environmental matters representations survives for a period of three years after the transaction closing.  The indemnification relating to unknown environmental liabilities for manufactured gas plants and disposal sites outside of Pennsylvania could survive more than three years, but only with respect to applicable property or sites identified by the purchaser prior to the third anniversary of the transaction closing.  The indemnification for covenants survives until the applicable covenant is performed and is not subject to any cap. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| PPL Energy Supply (b)                                                                      |   |                                     |   |           |   |        |   |   |   |   |
| Letters of credit issued on behalf of affiliates                                           |   |                                     | 17     |           |   |        | 2010 to 2011 |   |   | Standby letter of credit arrangements under PPL Energy Supply's credit facilities for the purposes of protecting various third parties against nonperformance by PPL.  This is not a guarantee by PPL on a consolidated basis. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| Retroactive premiums under nuclear insurance programs                                      |   |                                     | 40     |           |   |        |   |   |   | PPL Susquehanna is contingently obligated to pay this amount related to potential retroactive premiums that could be assessed under its nuclear insurance programs.  See "Nuclear Insurance" for additional information. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| Nuclear claims under The Price-Anderson Act Amendments under the Energy Policy Act of 2005 |   |                                     | 235    |           |   |        |   |   |   | This is the maximum amount PPL Susquehanna could be assessed for each incident at any of the nuclear reactors covered by this Act.  See "Nuclear Insurance" for additional information. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| Indemnifications for entities in liquidation and sales of assets                           |   |                                     | 1,734  |           |   |        | 2010 to 2017 |   |   | PPL Energy Supply's maximum exposure with respect to certain indemnifications and the expiration of the indemnifications cannot be estimated because, in the case of certain indemnification provisions, the maximum potential liability is not capped by the transaction documents and the expiration date is based on the applicable statute of limitations.  The exposure and expiration dates noted are only for those cases in which the agreements provide for specific limits. In connection with the liquidation of wholly owned subsidiaries that have been deconsolidated upon turning the entities over to the liquidators, certain affiliates of PPL Global have agreed to indemnify the liquidators, directors and/or the entities themselves for any liabilities or expenses arising during the liquidation process, including liabilities and expenses of the entities placed into liquidation.  In some cases, the indemnifications are limited to a maximum amount that is based on distributions made from the subsidiary to its parent either prior or subsequent to being placed into liquidation.  In other cases, the maximum amount of the indemnifications is not explicitly stated in the agreements.  The indemnifications generally expire two to seven years subsequent to the date of dissolution of the entities.  The exposure noted only includes those cases in which the agreements provide for a specific limit on the amount of the indemnification, and the expiration date was based on an estimate of the dissolution date of the entities. In March 2010, to enable the liquidator to declare distributions in that month, WPD agreed to indemnify the liquidator in connection with liquidations of two of its former subsidiaries that had been dormant since 2003.  The maximum exposure of such indemnification equals the $1.5 billion in distributions.  As noted in footnote (b), neither PPL nor PPL Energy Supply is liable for the obligations under guarantees provided by WPD, as the beneficiaries of the guarantees do not have recourse to such entities.  |
|                                                                                       |   |                                     |   |           |   |        |   |   |   | In connection with their sales of various businesses, WPD and its affiliates have provided the purchasers with indemnifications that are standard for such transactions, including indemnifications for certain pre-existing liabilities and environmental and tax matters.  In addition, in connection with certain of these sales, WPD and its affiliates have agreed to continue their obligations under existing third-party guarantees, either for a set period of time following the transactions or upon the condition that the purchasers make reasonable efforts to terminate the guarantees.  Finally, WPD and its affiliates remain secondarily responsible for lease payments under certain leases that they have assigned to third parties.  |
|                                                                                       |   |                                     |   |           |   |        |   |   |   | A subsidiary of PPL Energy Supply has agreed to provide indemnification to the purchaser of the Long Island generation business for damages arising out of any breach of the representations, warranties and covenants under the related transaction agreement and for damages arising out of certain other matters, including liabilities relating to certain renewable energy facilities which were previously owned by one of the PPL subsidiaries being sold in the transaction but which are unrelated to the Long Island generation business.  The indemnification provisions are subject to certain customary limitations, including thresholds for allowable claims, caps on aggregate liability, and time limitations for claims arising out of breaches of most representations and warranties.  |
|                                                                                       |   |                                     |   |           |   |        |   |   |   | A subsidiary of PPL Energy Supply has agreed to provide indemnification to the purchaser of the six Maine hydroelectric facilities for damages arising out of any breach of the representations, warranties and covenants under the related transaction agreement and for damages arising out of certain other matters, including liabilities of the PPL Energy Supply subsidiary relating to the pre-closing ownership or operation of those hydroelectric facilities or relating to other assets of the PPL Energy Supply subsidiary that were not included in that sale.  The indemnification obligations are subject to certain customary limitations, including thresholds for allowable claims, caps on aggregate liability, and time limitations for claims arising out of breaches of most representations and warranties.  |
|                                                                                       |   |                                     |   |           |   |        |   |   |   | PPL Energy Supply has provided indemnification to the purchaser of a generating facility for losses arising out of any breach of the representations, warranties and covenants under the related transaction documents and for losses arising with respect to liabilities not specifically assumed by the purchaser, including certain pre-closing environmental and tort liabilities.  The indemnification other than for pre-closing environmental and tort liabilities is triggered only if the purchaser's losses reach $1 million in the aggregate, capped at $95 million and either expired in May 2007 or will expire pursuant to the applicable statutes of limitations.  The indemnification provision for unknown environmental and tort liabilities related to periods prior to PPL Energy Supply's ownership of the real property on which the facility is located is capped at $4 million in the aggregate.  Substantially all of the remaining indemnifications expired in the second quarter of 2010. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| Indemnification to operators of jointly owned facilities                                   |   |                                     | 6      |           |   |        |   |   |   | In December 2007, a subsidiary of PPL Energy Supply executed revised owners agreements for two jointly owned facilities, the Keystone and Conemaugh generating plants.  The agreements require that in the event of any default by an owner, the other owners fund contributions for the operation of the generating plants, based upon their ownership percentages.  The maximum obligation among all owners, for each plant, is currently $20 million.  The non-defaulting owners, who make up the defaulting owner's obligations, are entitled to the generation entitlement of the defaulting owner, based upon their ownership percentage.  The agreements do not have an expiration date. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| WPD guarantee of pension and other obligations of unconsolidated entities                  |   |                                     | 64     |           |   |        | 2015 |   |   | As a result of the privatization of the utility industry in the U.K., certain electric associations' roles and responsibilities were discontinued or modified.  As a result, certain obligations, primarily pension-related, associated with these organizations have been guaranteed by the participating members.  Costs are allocated to the members based on predetermined percentages as outlined in specific agreements.  However, if a member becomes insolvent, costs can be reallocated to and are guaranteed by the remaining members.  At June 30, 2010, WPD has recorded an estimated discounted liability based on its current allocated percentage of the total expected costs for which the expected payment/performance is probable.  Neither the expiration date nor the maximum amount of potential payments for certain obligations is explicitly stated in the related agreements.  Therefore, they have been estimated based on the types of obligations. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| Tax indemnification related to unconsolidated WPD affiliates                               |   |                                     | 8      |           |   |        | 2012 |   |   | Two WPD unconsolidated affiliates were refinanced during 2005.  Under the terms of the refinancing, WPD has indemnified the lender against certain tax and other liabilities. |
|                                                                                       |   |                                     |   |           |   |        |   |   |   |   |
| Guarantee of a portion of an unconsolidated entity's debt                                  |   |                                     | 22     |           |   |        | 2018 |   |   | Reflects principal payments only. |

| (a) |   | Represents the estimated maximum potential amount of future payments that could be required to be made under the guarantee.                                                                                                                                                                                                       |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Other than the letters of credit, all guarantees of PPL Energy Supply, on a consolidated basis, also apply to PPL on a consolidated basis.  Neither PPL nor PPL Energy Supply is liable for obligations under guarantees provided by WPD, as the beneficiaries of the guarantees do not have recourse to such entities. |

| 11.   | Related Party Transactions |
|-----------------|----------------------------|

|              |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------|--------|----------------------------------|--------|--------------------------------|
|              |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 (a) |
|              |   |                             |   |                           |   |   |   |   |   |   |   |   |
| PPL Energy Supply |   | $                                | 56     |                           | $ | 53 |   | $ | 115 |   | $ | 108 |
| PPL Electric      |   |                             | 32     |                           |   | 28 |   |   | 65 |   |   | 60 |

| (a) |   | Excludes allocated costs associated with the February 2009 workforce reduction.  See Note 9 for additional information. |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------|

| 12.   | Other Income (Expense) - net |
|-----------------|------------------------------|

|                                                  |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                  |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| PPL                                                   |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income                                          |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings on securities in PPL Susquehanna's NDT funds |   | $                                | 5      |                           |   | $ | 5 |   |   | $ | 11 |   |   | $ | 6 |   |
| Interest income                                       |   |                             | 1      |                           |   |   | 1 |   |   |   | 1 |   |   |   | 8 |   |
| Gains related to the extinguishment of notes (a) |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | 29 |   |
| Miscellaneous - Domestic                              |   |                             | 3      |                           |   |   | 2 |   |   |   | 4 |   |   |   | 4 |   |
| Miscellaneous - International                         |   |                             | 1      |                           |   |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Total                                                 |   |                             | 10     |                           |   |   | 9 |   |   |   | 17 |   |   |   | 48 |   |
| Other Expense                                         |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Pending E.ON U.S. acquisition costs (b)               |   |                             | 7      |                           |   |   |   |   |   |   | 7 |   |   |   |   |   |
| Economic foreign currency exchange contracts          |   |                             |   |                           |   |   | 11 |   |   |   | (2 | ) |   |   | 11 |   |
| Miscellaneous - Domestic                              |   |                             | 2      |                           |   |   | 3 |   |   |   | 3 |   |   |   | 7 |   |
| Miscellaneous - International                         |   |                             |   |                           |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
| Other Income (Expense) - net                |   | $                                | 1      |                           |   | $ | (6 | ) |   | $ | 9 |   |   | $ | 29 |   |
|                                                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Energy Supply                                     |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income                                          |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Gains related to the extinguishment of notes (a) |   |                             |   |                           |   |   |   |   |   |   |   |   |   | $ | 25 |   |
| Earnings on securities in PPL Susquehanna's NDT funds |   | $                                | 5      |                           |   | $ | 5 |   |   | $ | 11 |   |   |   | 6 |   |
| Interest income                                       |   |                             |   |                           |   |   | 1 |   |   |   |   |   |   |   | 5 |   |
| Miscellaneous - Domestic                              |   |                             | 2      |                           |   |   | 1 |   |   |   | 3 |   |   |   | 3 |   |
| Miscellaneous - International                         |   |                             | 1      |                           |   |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Total                                                 |   |                             | 8      |                           |   |   | 8 |   |   |   | 15 |   |   |   | 40 |   |
| Other Expense                                         |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Economic foreign currency exchange contracts          |   |                             |   |                           |   |   | 11 |   |   |   | (2 | ) |   |   | 11 |   |
| Miscellaneous - Domestic                              |   |                             | 1      |                           |   |   | 2 |   |   |   | 3 |   |   |   | 5 |   |
| Miscellaneous - International                         |   |                             |   |                           |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
| Other Income (Expense) - net                |   | $                                | 7      |                           |   | $ | (6 | ) |   | $ | 14 |   |   | $ | 23 |   |
|                                                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Electric                                          |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income                                          |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                       |   | $                                | 1      |                           |   | $ | 1 |   |   | $ | 1 |   |   | $ | 3 |   |
| Miscellaneous                                         |   |                             | 1      |                           |   |   |   |   |   |   | 2 |   |   |   |   |   |
| Total                                                 |   |                             | 2      |                           |   |   | 1 |   |   |   | 3 |   |   |   | 3 |   |
| Other Expense                                         |   |                             |   |                           |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
| Other Income (Expense) - net                          |   | $                                | 2      |                           |   | $ |   |   |   | $ | 3 |   |   | $ | 2 |   |

| (a) |   | In 2009, PPL Energy Supply completed tender offers to purchase up to $250 million aggregate principal amount of certain of its outstanding senior notes for $220 million, resulting in a $25 million net gain.  PPL recorded an additional net gain of $4 million as a result of reclassifying gains and losses on related cash flow hedges from AOCI into earnings. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | See Note 8 for additional information.                                                                                                                                                                                                                                                                                                                                         |

| 13.   | Fair Value Measurements and Credit Concentrations |
|-----------------|---------------------------------------------------|

|                                   |   | June 30, 2010 |   | December 31, 2009 |
|----------------------------------------|--------|---------------|--------|------------------------|
|                                   |   |          | Total  |                   |   |   | Level 1 |   |   |   | Level 2 |   |   |   | Level 3 |   |   |   | Total |   |   |   | Level 1 |   |   |   | Level 2 |   |   |   | Level 3 |   |
| PPL                                    |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                 |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents              |   | $             | 4,505  |                   |   | $ | 4,505 |   |   |   |   |   |   |   |   |   |   | $ | 801 |   |   | $ | 801 |   |   |   |   |   |   |   |   |   |
| Restricted cash and cash equivalents   |   |          | 49     |                   |   |   | 49 |   |   |   |   |   |   |   |   |   |   |   | 129 |   |   |   | 129 |   |   |   |   |   |   |   |   |   |
| Price risk management assets:          |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Energy commodities                     |   |          | 3,360  |                   |   |   | 6 |   |   | $ | 3,287 |   |   | $ | 67 |   |   |   | 3,354 |   |   |   | 3 |   |   | $ | 3,234 |   |   | $ | 117 |   |
| Interest rate swaps                    |   |          | 43     |                   |   |   |   |   |   |   | 43 |   |   |   |   |   |   |   | 50 |   |   |   |   |   |   |   | 50 |   |   |   |   |   |
| Foreign currency exchange contracts    |   |          | 8      |                   |   |   |   |   |   |   | 8 |   |   |   |   |   |   |   | 15 |   |   |   |   |   |   |   | 15 |   |   |   |   |   |
| Cross-currency swaps                   |   |          | 64     |                   |   |   |   |   |   |   | 64 |   |   |   |   |   |   |   | 12 |   |   |   |   |   |   |   | 12 |   |   |   |   |   |
|                                   |   |          | 3,475  |                   |   |   | 6 |   |   |   | 3,402 |   |   |   | 67 |   |   |   | 3,431 |   |   |   | 3 |   |   |   | 3,311 |   |   |   | 117 |   |
| NDT funds:                             |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents              |   |          | 7      |                   |   |   | 7 |   |   |   |   |   |   |   |   |   |   |   | 7 |   |   |   | 7 |   |   |   |   |   |   |   |   |   |
| Equity securities:                     |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. large-cap                         |   |          | 244    |                   |   |   | 166 |   |   |   | 78 |   |   |   |   |   |   |   | 259 |   |   |   | 176 |   |   |   | 83 |   |   |   |   |   |
| U.S. mid/small-cap                     |   |          | 94     |                   |   |   | 71 |   |   |   | 23 |   |   |   |   |   |   |   | 101 |   |   |   | 75 |   |   |   | 26 |   |   |   |   |   |
| Debt securities:                       |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                          |   |          | 81     |                   |   |   | 81 |   |   |   |   |   |   |   |   |   |   |   | 74 |   |   |   | 74 |   |   |   |   |   |   |   |   |   |
| U.S. government agency                 |   |          | 7      |                   |   |   |   |   |   |   | 7 |   |   |   |   |   |   |   | 9 |   |   |   |   |   |   |   | 9 |   |   |   |   |   |
| Municipality                           |   |          | 67     |                   |   |   |   |   |   |   | 67 |   |   |   |   |   |   |   | 65 |   |   |   |   |   |   |   | 65 |   |   |   |   |   |
| Investment-grade corporate             |   |          | 32     |                   |   |   |   |   |   |   | 32 |   |   |   |   |   |   |   | 29 |   |   |   |   |   |   |   | 29 |   |   |   |   |   |
| Residential mortgage-backed securities |   |          | 1      |                   |   |   |   |   |   |   | 1 |   |   |   |   |   |   |   | 1 |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
| Receivables/payables, net              |   |          | 2      |                   |   |   |   |   |   |   | 2 |   |   |   |   |   |   |   | 3 |   |   |   |   |   |   |   | 3 |   |   |   |   |   |
|                                   |   |          | 535    |                   |   |   | 325 |   |   |   | 210 |   |   |   |   |   |   |   | 548 |   |   |   | 332 |   |   |   | 216 |   |   |   |   |   |
| Auction rate securities                |   |          | 25     |                   |   |   |   |   |   |   |   |   |   |   | 25 |   |   |   | 25 |   |   |   |   |   |   |   |   |   |   |   | 25 |   |
|                                   |   | $             | 8,589  |                   |   | $ | 4,885 |   |   | $ | 3,612 |   |   | $ | 92 |   |   | $ | 4,934 |   |   | $ | 1,265 |   |   | $ | 3,527 |   |   | $ | 142 |   |
|                                   |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                            |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Price risk management liabilities:     |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Energy commodities                     |   | $             | 2,053  |                   |   | $ | 4 |   |   | $ | 2,030 |   |   | $ | 19 |   |   | $ | 2,080 |   |   | $ | 2 |   |   | $ | 2,068 |   |   | $ | 10 |   |
| Interest rate swaps                    |   |          | 79     |                   |   |   |   |   |   |   | 79 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cross-currency swaps                   |   |          | 12     |                   |   |   |   |   |   |   | 12 |   |   |   |   |   |   |   | 4 |   |   |   |   |   |   |   | 4 |   |   |   |   |   |
|                                   |   | $             | 2,144  |                   |   | $ | 4 |   |   | $ | 2,121 |   |   | $ | 19 |   |   | $ | 2,084 |   |   | $ | 2 |   |   | $ | 2,072 |   |   | $ | 10 |   |
|                                   |   |          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| PPL Energy Supply                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Assets                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents              |   | $      | 4,134  |   |   | $      | 4,134  |   |   |   |   |   |   |   |   |   |   | $      | 245    |   |   | $      | 245    |   |   |   |   |   |   |   |   |   |
| Restricted cash and cash equivalents   |   |   | 32     |   |   |   | 32     |   |   |   |   |   |   |   |   |   |   |   | 111    |   |   |   | 111    |   |   |   |   |   |   |   |   |   |
| Price risk management assets:          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Energy commodities                     |   |   | 3,360  |   |   |   | 6      |   |   | $      | 3,287  |   |   | $      | 67     |   |   |   | 3,354  |   |   |   | 3      |   |   | $      | 3,234  |   |   | $      | 117    |   |
| Foreign currency exchange contracts    |   |   | 8      |   |   |   |   |   |   |   | 8      |   |   |   |   |   |   |   | 15     |   |   |   |   |   |   |   | 15     |   |   |   |   |   |
| Cross-currency swaps                   |   |   | 64     |   |   |   |   |   |   |   | 64     |   |   |   |   |   |   |   | 12     |   |   |   |   |   |   |   | 12     |   |   |   |   |   |
|                                   |   |   | 3,432  |   |   |   | 6      |   |   |   | 3,359  |   |   |   | 67     |   |   |   | 3,381  |   |   |   | 3      |   |   |   | 3,261  |   |   |   | 117    |   |
| NDT funds:                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents              |   |   | 7      |   |   |   | 7      |   |   |   |   |   |   |   |   |   |   |   | 7      |   |   |   | 7      |   |   |   |   |   |   |   |   |   |
| Equity securities:                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. large-cap                         |   |   | 244    |   |   |   | 166    |   |   |   | 78     |   |   |   |   |   |   |   | 259    |   |   |   | 176    |   |   |   | 83     |   |   |   |   |   |
| U.S. mid/small-cap                     |   |   | 94     |   |   |   | 71     |   |   |   | 23     |   |   |   |   |   |   |   | 101    |   |   |   | 75     |   |   |   | 26     |   |   |   |   |   |
| Debt securities:                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                          |   |   | 81     |   |   |   | 81     |   |   |   |   |   |   |   |   |   |   |   | 74     |   |   |   | 74     |   |   |   |   |   |   |   |   |   |
| U.S. government agency                 |   |   | 7      |   |   |   |   |   |   |   | 7      |   |   |   |   |   |   |   | 9      |   |   |   |   |   |   |   | 9      |   |   |   |   |   |
| Municipality                           |   |   | 67     |   |   |   |   |   |   |   | 67     |   |   |   |   |   |   |   | 65     |   |   |   |   |   |   |   | 65     |   |   |   |   |   |
| Investment-grade corporate             |   |   | 32     |   |   |   |   |   |   |   | 32     |   |   |   |   |   |   |   | 29     |   |   |   |   |   |   |   | 29     |   |   |   |   |   |
| Residential mortgage-backed securities |   |   | 1      |   |   |   |   |   |   |   | 1      |   |   |   |   |   |   |   | 1      |   |   |   |   |   |   |   | 1      |   |   |   |   |   |
| Receivables/payables, net              |   |   | 2      |   |   |   |   |   |   |   | 2      |   |   |   |   |   |   |   | 3      |   |   |   |   |   |   |   | 3      |   |   |   |   |   |
|                                   |   |   | 535    |   |   |   | 325    |   |   |   | 210    |   |   |   |   |   |   |   | 548    |   |   |   | 332    |   |   |   | 216    |   |   |   |   |   |
| Auction rate securities                |   |   | 20     |   |   |   |   |   |   |   |   |   |   |   | 20     |   |   |   | 20     |   |   |   |   |   |   |   |   |   |   |   | 20     |   |
|                                   |   | $      | 8,153  |   |   | $      | 4,497  |   |   | $      | 3,569  |   |   | $      | 87     |   |   | $      | 4,305  |   |   | $      | 691    |   |   | $      | 3,477  |   |   | $      | 137    |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Price risk management liabilities:     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Energy commodities                     |   | $      | 2,053  |   |   | $      | 4      |   |   | $      | 2,030  |   |   | $      | 19     |   |   | $      | 2,080  |   |   | $      | 2      |   |   | $      | 2,068  |   |   | $      | 10     |   |
| Cross-currency swaps                   |   |   | 12     |   |   |   |   |   |   |   | 12     |   |   |   |   |   |   |   | 4      |   |   |   |   |   |   |   | 4      |   |   |   |   |   |
|                                   |   | $      | 2,065  |   |   | $      | 4      |   |   | $      | 2,042  |   |   | $      | 19     |   |   | $      | 2,084  |   |   | $      | 2      |   |   | $      | 2,072  |   |   | $      | 10     |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Electric                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents              |   | $      | 262    |   |   | $      | 262    |   |   |   |   |   |   |   |   |   |   | $      | 485    |   |   | $      | 485    |   |   |   |   |   |   |   |   |   |
| Restricted cash and cash equivalents   |   |   | 15     |   |   |   | 15     |   |   |   |   |   |   |   |   |   |   |   | 14     |   |   |   | 14     |   |   |   |   |   |   |   |   |   |
|                                   |   | $      | 277    |   |   | $      | 277    |   |   |   |   |   |   |   |   |   |   | $      | 499    |   |   | $      | 499    |   |   |   |   |   |   |   |   |   |

|                                             |   | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |
|--------------------------------------------------|--------|-------------------------------------------------------------------------|
|                                             |   | Three Months Ended                                                      |   | Six Months Ended |
|                                             |   |                                                                    | Energy Commodities, net |   |   |   | Auction Rate Securities |   |   |   | Total |   |   |   | Energy Commodities, net |   |   |   | Auction Rate Securities |   |   |   | Total |   |
| PPL                                              |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of period                   |   | $                                                                       | 51 |   |   | $ | 25 |   |   | $ | 76 |   |   | $ | 107 |   |   | $ | 25 |   |   | $ | 132 |   |
| Total realized/unrealized gains (losses)         |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                             |   |                                                                    | (54 | ) |   |   |   |   |   |   | (54 | ) |   |   | (130 | ) |   |   |   |   |   |   | (130 | ) |
| Included in OCI                                  |   |                                                                    | 5 |   |   |   |   |   |   |   | 5 |   |   |   | 8 |   |   |   |   |   |   |   | 8 |   |
| Purchases, sales, issuances and settlements, net |   |                                                                    | 43 |   |   |   |   |   |   |   | 43 |   |   |   | 63 |   |   |   |   |   |   |   | 63 |   |
| Transfers into Level 3                           |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   | (2 | ) |   |   |   |   |   |   | (2 | ) |
| Transfers out of Level 3                         |   |                                                                    | 3 |   |   |   |   |   |   |   | 3 |   |   |   | 2 |   |   |   |   |   |   |   | 2 |   |
| Balance at end of period                         |   | $                                                                       | 48 |   |   | $ | 25 |   |   | $ | 73 |   |   | $ | 48 |   |   | $ | 25 |   |   | $ | 73 |   |
|                                             |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Energy Supply                                |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of period                   |   | $                                                                       | 51 |   |   | $ | 20 |   |   | $ | 71 |   |   | $ | 107 |   |   | $ | 20 |   |   | $ | 127 |   |
| Total realized/unrealized gains (losses)         |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                             |   |                                                                    | (54 | ) |   |   |   |   |   |   | (54 | ) |   |   | (130 | ) |   |   |   |   |   |   | (130 | ) |
| Included in OCI                                  |   |                                                                    | 5 |   |   |   |   |   |   |   | 5 |   |   |   | 8 |   |   |   |   |   |   |   | 8 |   |
| Purchases, sales, issuances and settlements, net |   |                                                                    | 43 |   |   |   |   |   |   |   | 43 |   |   |   | 63 |   |   |   |   |   |   |   | 63 |   |
| Transfers into Level 3                           |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   | (2 | ) |   |   |   |   |   |   | (2 | ) |
| Transfers out of Level 3                         |   |                                                                    | 3 |   |   |   |   |   |   |   | 3 |   |   |   | 2 |   |   |   |   |   |   |   | 2 |   |
| Balance at end of period                         |   | $                                                                       | 48 |   |   | $ | 20 |   |   | $ | 68 |   |   | $ | 48 |   |   | $ | 20 |   |   | $ | 68 |   |

|                                             |   | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |
|--------------------------------------------------|--------|-------------------------------------------------------------------------|
|                                             |   | Three Months Ended                                                      |   | Six Months Ended |
|                                             |   |                                                                    | Energy Commodities, net |   |   |   | Auction Rate Securities |   |   |   | Total |   |   |   | Energy Commodities, net |   |   |   | Auction Rate Securities |   |   |   | Total |   |
| PPL                                              |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of period                   |   | $                                                                       | 116 |   |   | $ | 22 |   |   | $ | 138 |   |   | $ | 188 |   |   | $ | 24 |   |   | $ | 212 |   |
| Total realized/unrealized gains (losses)         |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                             |   |                                                                    | (55 | ) |   |   |   |   |   |   | (55 | ) |   |   | (76 | ) |   |   |   |   |   |   | (76 | ) |
| Included in OCI                                  |   |                                                                    | 13 |   |   |   | (4 | ) |   |   | 9 |   |   |   | 3 |   |   |   | (6 | ) |   |   | (3 | ) |
| Purchases, sales, issuances and settlements, net |   |                                                                    | 49 |   |   |   |   |   |   |   | 49 |   |   |   | 85 |   |   |   |   |   |   |   | 85 |   |
| Transfers into/out of Level 3                    |   |                                                                    | 16 |   |   |   |   |   |   |   | 16 |   |   |   | (61 | ) |   |   |   |   |   |   | (61 | ) |
| Balance at end of period                         |   | $                                                                       | 139 |   |   | $ | 18 |   |   | $ | 157 |   |   | $ | 139 |   |   | $ | 18 |   |   | $ | 157 |   |
|                                             |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Energy Supply                                |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of period                   |   | $                                                                       | 116 |   |   | $ | 17 |   |   | $ | 133 |   |   | $ | 188 |   |   | $ | 19 |   |   | $ | 207 |   |
| Total realized/unrealized gains (losses)         |   |                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                             |   |                                                                    | (55 | ) |   |   |   |   |   |   | (55 | ) |   |   | (76 | ) |   |   |   |   |   |   | (76 | ) |
| Included in OCI                                  |   |                                                                    | 13 |   |   |   | (2 | ) |   |   | 11 |   |   |   | 3 |   |   |   | (4 | ) |   |   | (1 | ) |
| Purchases, sales, issuances and settlements, net |   |                                                                    | 49 |   |   |   |   |   |   |   | 49 |   |   |   | 85 |   |   |   |   |   |   |   | 85 |   |
| Transfers into/out of Level 3                    |   |                                                                    | 16 |   |   |   |   |   |   |   | 16 |   |   |   | (61 | ) |   |   |   |   |   |   | (61 | ) |
| Balance at end of period                         |   | $                                                                       | 139 |   |   | $ | 15 |   |   | $ | 154 |   |   | $ | 139 |   |   | $ | 15 |   |   | $ | 154 |   |

|                                                                                       |   |   | Three Months Ended                       |   |   |   | Six Months Ended           |   |
|--------------------------------------------------------------------------------------------|--------|--------|------------------------------------------|--------|--------|--------|----------------------------|--------|
|                                                                                       |   |   | Energy Commodities, net                  |   |   |   | Energy Commodities, net    |   |
|                                                                                       |   |   | Unregulated Retail Electric and Gas |   |   |   | Net Energy Trading Margins |   |   |   | Energy Purchases |   |   |   | Wholesale Energy Marketing |   |   |   | Unregulated Retail Electric and Gas |   |   |   | Net Energy Trading Margins |   |   |   | Energy Purchases |   |
|                                                                                       |   |   |                                     |   |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL and PPL Energy Supply                                                                  |   |   |                                     |   |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total gains (losses) included in earnings for the period                                   |   | $      | 1                                        |   |   | $      | (10                        | )      |   | $ | (45 | ) |   | $ | 13 |   |   | $ | 12 |   |   | $ | (12 | ) |   | $ | (143 | ) |
| Change in unrealized gains (losses) relating to positions still held at the reporting date |   |   | (1                                       | )      |   |   | (2                         | )      |   |   | (6 | ) |   |   | 5 |   |   |   | 10 |   |   |   | (3 | ) |   |   | (81 | ) |

|                                                                                       |   | Three Months Ended      |                       | Six Months Ended        |
|--------------------------------------------------------------------------------------------|--------|-------------------------|----------------------------|-------------------------|
|                                                                                       |   | Energy Commodities, net |                       | Energy Commodities, net |
|                                                                                       |   |                    | Wholesale Energy Marketing |                    |   |   | Net Energy Trading Margins |   |   |   | Energy Purchases |   |   |   | Wholesale Energy Marketing |   |   |   | Net Energy Trading Margins |   |   |   | Energy Purchases |   |
|                                                                                       |   |                    |                       |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL and PPL Energy Supply                                                                  |   |                    |                       |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total gains (losses) included in earnings for the period                                   |   | $                       | 11                         |                    |   | $ | (9 | ) |   | $ | (57 | ) |   | $ | 15 |   |   | $ | (18 | ) |   | $ | (73 | ) |
| Change in unrealized gains (losses) relating to positions still held at the reporting date |   |                    | 12                         |                    |   |   |   |   |   |   | (36 | ) |   |   | 13 |   |   |   | 1 |   |   |   | (36 | ) |

| · | the underlying structure and credit quality of each security;                                                                                                                                                                                                                               |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | the present value of future interest payments, estimated based on forward rates of the SIFMA Index, and principal payments discounted using interest rates for bonds with a credit rating and remaining term to maturity similar to the stated maturity of the auction rate securities; and |
| · | consideration of the impact of auction failures or redemption at par.                                                                                                                                                                                                                       |

|                                    |   |               |   | Fair Value Measurements Using |   |    |
|-----------------------------------------|--------|--------------------|--------|-------------------------------|--------|---------|
|                                    |   | Carrying Value (a) |   | Level 2                       |   | Level 3 |   | Loss (b) |
| Sulfur dioxide emission allowances (c): |   |               |   |                          |   |    |   |   |   |   |   |   |   |   |   |   |
| June 30, 2010                           |   | $                  | 11     |                          |   |    |   |   |   | $ | 3 |   |   | $ | (8 | ) |
| March 31, 2010                          |   |               | 13     |                          |   |    |   |   |   |   | 10 |   |   |   | (3 | ) |
| March 31, 2009                          |   |               | 45     |                          |   |    |   |   |   |   | 15 |   |   |   | (30 | ) |
| Long Island generation business:        |   |               |   |                          |   |    |   |   |   |   |   |   |   |   |   |   |
| June 30, 2009                           |   |               | 189    |                          |   | $       | 138 |   |   |   |   |   |   |   | (52 | ) |

| (a) |   | Represents carrying value before fair value measurement.                                                                                                                                                                                                                                                                                                      |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Loss on sulfur dioxide emission allowances was recorded in the Supply segment and included in "Other operation and maintenance" on the Statements of Income.  Loss on the Long Island generation business was recorded in the Supply segment and included in "Loss from Discontinued Operations (net of income taxes)" on the Statements of Income. |
| (c) |   | Current and long-term sulfur dioxide emission allowances are included in "Other intangibles" in their respective areas on the Balance Sheet.                                                                                                                                                                                                                  |

|              |   | Net Asset (Liability) |
|-------------------|--------|-----------------------|
|              |   | June 30, 2010    |   | December 31, 2009 |
|              |   |                  |   |   |   |   |   |   |
| PPL               |   | $                     | 222 |   |   | $ | 122 |   |
| PPL Energy Supply |   |                  | 336 |   |   |   | 334 |   |
| PPL Electric      |   |                  | (114 | ) |   |   | (216 | ) |

|                             |   | June 30, 2010 |            | December 31, 2009 |
|----------------------------------|--------|--------------------|-----------------|-------------------|
|                             |   |               | Carrying Amount |              |   |   | Fair Value |   |   |   | Carrying Amount |   |   |   | Fair Value |   |
| PPL                              |   |               |            |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Contract adjustment payments (a) |   | $                  | 157             |              |   | $ | 157 |   |   |   |   |   |   |   |   |   |
| Long-term debt                   |   |               | 8,711           |              |   |   | 9,115 |   |   | $ | 7,143 |   |   | $ | 7,280 |   |
| PPL Energy Supply                |   |               |            |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt                   |   |               | 5,436           |              |   |   | 5,763 |   |   |   | 5,031 |   |   |   | 5,180 |   |
| PPL Electric                     |   |               |            |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt                   |   |               | 1,472           |              |   |   | 1,658 |   |   |   | 1,472 |   |   |   | 1,567 |   |

| (a) |   | Reflected in other liabilities on the balance sheet.  See Note 7 for additional information. |
|-----|--------|--------------------------------------------------------------------------------------------------------|

| 14.   | Derivative Instruments and Hedging Activities |
|-----------------|-----------------------------------------------|

| · | commodity price, basis and volumetric risks for energy and energy-related products associated with the sale of electricity from its generating assets and other electricity marketing activities (including full-requirement sales contracts) and the purchase of fuel and fuel-related commodities for generating assets, as well as for proprietary trading activities; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | interest rate and price risk associated with debt used to finance operations and the pending acquisition of E.ON U.S., as well as debt and equity securities in NDT funds and defined benefit plans; and                                                                                                                                                                  |
| · | foreign currency exchange rate risk associated with investments in U.K. affiliates, as well as purchases of equipment in currencies other than U.S. dollars.                                                                                                                                                                                                              |

| · | commodity derivatives with its energy trading partners, which include other energy companies, fuel suppliers, and financial institutions; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
| · | interest rate derivatives with financial institutions; and                                                                                |
| · | foreign currency derivatives with financial institutions.                                                                                 |

| · | A portion of these sales contracts had previously been accounted for as NPNS and received accrual accounting treatment.  The related purchases to supply these sales contracts were accounted for as cash flow hedges, with the effective portion of the change in fair value being recorded in AOCI and the ineffective portion recorded in "Energy purchases - unrealized economic activity."                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | The rest of the sales contracts, along with their related hedges, had previously been accounted for as economic activity by PPL Energy Supply and the change in fair value of the sales contracts was recorded in "Wholesale energy marketing - Unrealized economic activity" and the change in fair value of the purchase contracts was recorded in "Energy purchases - Unrealized economic activity" on the Statement of Income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | At June 30, 2010, PPL Energy Supply could no longer assert that it was probable that any contracts with these counterparties would result in physical delivery.  Therefore, the fair value of the NPNS contracts of $66 million was recorded on the Balance Sheet in "Price risk management assets," with a corresponding gain to "Wholesale energy marketing - Unrealized economic activity."  Of this amount, $16 million was related to full-requirement sales contracts that have not been monetized.  The corresponding cash flow hedges were dedesignated and all amounts previously recorded in AOCI were reclassified to earnings.  This resulted in a pre-tax reclassification of $(87) million of losses from AOCI into "Energy purchases - Unrealized economic activity" on the Statement of Income.  An additional charge of $(23) million was also recorded at June 30, 2010 in "Wholesale energy marketing - Unrealized economic activity" to reflect the fair value of the sales contracts previously accounted for as economic activity. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | The net result of these transactions, excluding the full-requirement sales contracts that have not been monetized, was a loss of $(60) million, or $(36) million after tax, for the three and six months ended June 30, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

|                                |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Revenues                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Unregulated retail electric and gas |   | $                                | (2)    |                           |   | $ | 1 |   |   | $ | 8 |   |   | $ | 2 |   |
| Wholesale energy marketing          |   |                             | (666   | )                              |   |   | (112 | ) |   |   | (242 | ) |   |   | 240 |   |
| Operating Expenses                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel                                |   |                             | (8     | )                              |   |   | 26 |   |   |   | (3 | ) |   |   | 28 |   |
| Energy purchases (a)                |   |                             | 445    |                           |   |   | (65 | ) |   |   | (118 | ) |   |   | (334 | ) |

| (a) |   | During the second quarter of 2010, PPL Energy Supply corrected an error relating to the fair value of a capacity contract (classified as economic activity) due to the use of an incorrect forward capacity curve.  PPL Energy Supply's energy purchases were understated for the year ended December 31, 2009 and the first quarter of 2010 by an unrealized amount of $35 million ($20 million after tax or $0.05 per share, basic and diluted, for PPL) and $5 million ($3 million after tax or $0.01 per share, basic and diluted, for PPL).  Management concluded that the impacts were not material to the 2009 or first quarter 2010 financial statements of PPL and PPL Energy Supply, and are not expected to be material to the financial statements for the full year 2010. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2010 (a) |   | 2011   |   | 2012   |   |
|----------|--------|--------|--------|--------|--------|
| 27,232   |   | 51,364 |   | 55,393 |   |

| (a) |   | Represents expected sales from July 1, 2010 to December 31, 2010. |
|-----|--------|------------------------------------------------------------------------|

|     |   | Derivative    |   | Total Power |   | Fuel Purchases (d) |
|----------|--------|---------------|--------|-------------|--------|--------------------|
| Year     |   | Sales (a) (b) |   | Sales (c)   |   | Coal               |   | Nuclear |
|     |   |          |   |        |   |               |   |   |   |   |   |   |   |   |   |   |
| 2010 (e) |   |          | 88%    |        |   |               | 99% |   |   |   | 100% |   |   |   | 100% |   |
| 2011     |   |          | 88%    |        |   |               | 97% |   |   |   | 98% |   |   |   | 100% |   |
| 2012     |   |          | 53%    |        |   |               | 61% |   |   |   | 93% |   |   |   | 100% |   |

| (a) |   | Excludes non-derivative contracts and contracts that qualify for NPNS.  Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.  Percentages are based on fixed-price contracts only. |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Volumes for derivative sales contracts that deliver between 2012 and 2015 are 4,469 GWh.                                                                                                                                                                                                      |
| (c) |   | Amount represents derivative and non-derivative contracts.  Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.  Percentages are based on fixed-price contracts only.             |
| (d) |   | Coal and nuclear contracts receive accrual accounting treatment, as they are not derivative contracts.  Percentages are based on both fixed- and variable-priced contracts.                                                                                                         |
| (e) |   | Represents the time period from July 1, 2010 to December 31, 2010.                                                                                                                                                                                                                       |

| Contract Type |   | 2010 (a) |   | 2011   |   | 2012   |   |
|---------------|--------|----------|--------|--------|--------|--------|--------|
|          |   |     |   |   |   |   |   |   |   |   |
| Oil Swaps (b) |   |     | 330    |   |   | 732    |   |   | 755 |   |

| (a) |   | Represents the time period from July 1, 2010 to December 31, 2010. |
|-----|--------|-------------------------------------------------------------------------|
| (b) |   | Net volumes that deliver in 2013 are 240 thousand barrels.              |

|                      |   |   | Units                |   |   | 2010 (a) |   |   | 2011   |   |
|---------------------------|--------|--------|----------------------|--------|--------|----------|--------|--------|--------|--------|
| Net Power Sales:          |   |   |                 |   |   |     |   |   |   |   |
| Options (b)               |   |   | GWh                  |   |   | 495      |   |   |   |   |
| Non-option contracts (c)  |   |   | GWh                  |   |   | 2,139    |   |   | 335    |   |
|                      |   |   |                 |   |   |     |   |   |   |   |
| Net Power/Fuel Purchases: |   |   |                 |   |   |     |   |   |   |   |
| Non-option contracts      |   |   | Thousands of Barrels |   |   | 100      |   |   |   |   |
| Non-option contracts      |   |   | Bcf                  |   |   | 17.3     |   |   | 2.7    |   |

| (a) |   | Represents the time period from July 1, 2010 to December 31, 2010.                                                                     |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option. |
| (c) |   | Included in these volumes are exercised option contracts that converted to non-option derivative contracts.                                 |

|                                 | Units  |   | 2010 (a) |   | 2011    |   | 2012   |
|--------------------------------------|--------|--------|----------|--------|---------|--------|--------|
|                                 |   |   |     |   |    |   |   |   |   |   |   |   |   |   |
| Energy sales contracts (b) (c)       |   | GWh    |     |   | (15,815 | )      |   |   | (15,663 | ) |   |   | (6,531 | ) |
| Related energy supply contracts (c): |   |   |     |   |    |   |   |   |   |   |   |   |   |   |
| Energy purchases                     |   | GWh    |     |   | 13,335  |   |   |   | 12,831 |   |   |   | 4,074 |   |
| Volumetric hedges (d)                |   | GWh    |     |   | 49      |   |   |   | 176 |   |   |   | 247 |   |
| Generation Supply                    |   | GWh    |     |   | 1,635   |   |   |   | 2,402 |   |   |   | 2,388 |   |
| Retail gas sales contracts           |   | Bcf    |     |   | (1.8    | )      |   |   | (3.4 | ) |   |   | (4.1 | ) |
| Retail gas purchase contracts        |   | Bcf    |     |   | 1.8     |   |   |   | 3.4 |   |   |   | 4.1 |   |

| (a) |   | Represents the time period from July 1, 2010 to December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | The majority of PPL Energy Supply's full-requirement sales contracts receive accrual accounting as they qualify for NPNS or are not derivative contracts.  Also included in these volumes are the sales from PPL EnergyPlus to PPL Electric to supply PPL Electric's 2010 - 2012 PLR load obligation.  See Note 13 for additional information on the full-requirement sales contracts that will no longer be accounted for as NPNS in the third quarter of 2010. |
| (c) |   | Net volumes for derivative contracts, excluding contracts that qualify for NPNS, that deliver in 2013 are 186 GWh.                                                                                                                                                                                                                                                                                                                                                                   |
| (d) |   | PPL Energy Supply uses power and gas options, swaps and futures to hedge the volumetric risk associated with full-requirement sales contracts since the demand for power varies hourly.  Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.                                                                                                                                       |

| Commodity                 |   | Units  |   | 2010 (a) |    | 2011   |   | 2012   |
|---------------------------|--------|--------|--------|----------|---------|--------|--------|--------|
|                      |   |   |   |     |    |   |   |   |   |   |   |   |
| FTRs                      |   | GWh    |   |     | 31,048  |   |   | 25,770 |   |   |   |   |
| Power Basis Positions (b) |   | GWh    |   |     | (12,712 | )      |   | (3,270 | ) |   | (73 | ) |
| Gas Basis Positions (c)   |   | Bcf    |   |     | 24.7    |   |   | 2.6    |   |   | (1.1 | ) |

| (a) |   | Represents the time period from July 1, 2010 to December 31, 2010. |
|-----|--------|-------------------------------------------------------------------------|
| (b) |   | Net volumes that deliver in 2013 are (216) GWh.                         |
| (c) |   | Net volumes that deliver in 2013 are (0.3) Bcf.                         |

| Commodity    |   | Units     |   | 2010 (a) |    | 2011   |   | 2012   |
|--------------|--------|-----------|--------|----------|---------|--------|--------|--------|
|         |   |      |   |     |    |   |   |   |   |   |   |   |
| Capacity (b) |   | MW-months |   |     | (10,539 | )      |   | (8,131 | ) |   | 2,542 |   |

| (a) |   | Represents the time period from July 1, 2010 to December 31, 2010. |
|-----|--------|-------------------------------------------------------------------------|
| (b) |   | Net volumes that deliver between 2012 and 2016 are (101) MW-months.     |

| · | Any wholesale and retail contracts to sell electricity and the related capacity that do not meet the definition of a derivative receive accrual accounting.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | Physical electricity-only transactions can receive cash flow hedge treatment if all of the qualifications are met.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | Physical capacity-only transactions to sell excess capacity from PPL's and PPL Energy Supply's generation qualify for NPNS.  The forward value of these transactions is not recorded in the financial statements and has no earnings impact until delivery.                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | Any physical energy sale or purchase not intended to hedge an economic exposure is considered speculative, with unrealized gains or losses recorded immediately through earnings.                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | Financial transactions that can be settled in cash do not qualify for NPNS because they do not require physical delivery.  These transactions can receive cash flow hedge treatment if they lock in the cash flows PPL and PPL Energy Supply will receive or pay for energy expected to be sold or purchased in the spot market.                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | PPL and PPL Energy Supply purchase FTRs for both proprietary trading activities and hedging purposes.  FTRs, although economically effective as electricity basis hedges, do not currently qualify for hedge accounting treatment.  Unrealized and realized gains and losses from FTRs that were entered into for trading purposes are recorded in "Net energy trading margins" on the Statements of Income.  Unrealized and realized gains and losses from FTRs that were entered into for hedging purposes are recorded in "Energy purchases" on the Statements of Income. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | Physical and financial transactions for gas and oil to meet fuel and retail requirements can receive cash flow hedge treatment if they lock in the price PPL and PPL Energy Supply will pay and meet the definition of a derivative.                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| · | Certain option contracts may receive hedge accounting treatment.  Those that are not eligible are marked to fair value through earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

| · | Transactions to lock in an interest rate prior to a debt issuance can be designated as cash flow hedges.  Any unrealized gains or losses on transactions receiving cash flow hedge treatment are recorded in OCI and are amortized as a component of interest expense when the hedged transactions occur.                                                                                                                                    |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| · | Transactions entered into to hedge fluctuations in the fair value of existing debt can be designated as fair value hedges.  To the extent that the change in the fair value of the derivative offsets the change in the fair value of the existing debt, there is no earnings impact, as both changes are reflected in interest expense.  Realized gains and losses over the life of the hedge are reflected in interest expense.  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| · | Transactions entered into to hedge the value of a net investment of foreign operations can be designated as net investment hedges.  To the extent that the derivatives are highly effective at hedging the value of the net investment, gains and losses are recorded in the foreign currency translation adjustment component of OCI and will not be recorded in earnings until the investment is substantially liquidated.                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| · | Derivative transactions that do not qualify for hedge accounting treatment are marked to fair value through earnings.  These transactions generally include hedges of earnings translation risk associated with subsidiaries that report their financial statements in a currency other than the U.S. dollar.  As such, these transactions eliminate earnings volatility due solely to changes in foreign currency exchange rates. |

|                                          |   | June 30, 2010                                 |   | December 31, 2009                                |
|-----------------------------------------------|--------|-----------------------------------------------|--------|-------------------------------------------------------|
|                                          |   | Derivatives designated as hedging instruments |   | Derivatives not designated as hedging instruments (a) |   | Derivatives designated as hedging instruments |   | Derivatives not designated as hedging instruments (a) |
|                                          |   |                                          | Assets |                                                  |   |   | Liabilities |   |   |   | Assets |   |   |   | Liabilities |   |   |   | Assets |   |   |   | Liabilities |   |   |   | Assets |   |   |   | Liabilities |   |
| Current:                                      |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Price Risk Management Assets/Liabilities (b): |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps                           |   | $                                             | 7      |                                                  |   | $ | 63 |   |   |   |   |   |   |   |   |   |   | $ | 10 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cross-currency swaps                          |   |                                          | 3      |                                                  |   |   | 12 |   |   |   |   |   |   |   |   |   |   |   | 1 |   |   | $ | 4 |   |   |   |   |   |   |   |   |   |
| Foreign currency exchange contracts           |   |                                          | 7      |                                                  |   |   |   |   |   | $ | 1 |   |   |   |   |   |   |   | 8 |   |   |   |   |   |   | $ | 2 |   |   |   |   |   |
| Commodity contracts                           |   |                                          | 722    |                                                  |   |   | 96 |   |   |   | 1,378 |   |   | $ | 1,357 |   |   |   | 741 |   |   |   | 219 |   |   |   | 1,395 |   |   | $ | 1,279 |   |
| Total current                                 |   |                                          | 739    |                                                  |   |   | 171 |   |   |   | 1,379 |   |   |   | 1,357 |   |   |   | 760 |   |   |   | 223 |   |   |   | 1,397 |   |   |   | 1,279 |   |
| Noncurrent:                                   |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Price Risk Management Assets/Liabilities (b): |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps                           |   |                                          | 36     |                                                  |   |   | 16 |   |   |   |   |   |   |   |   |   |   |   | 40 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cross-currency swaps                          |   |                                          | 61     |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 11 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency exchange contracts           |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commodity contracts                           |   |                                          | 642    |                                                  |   |   | 73 |   |   |   | 618 |   |   |   | 527 |   |   |   | 578 |   |   |   | 118 |   |   |   | 640 |   |   |   | 464 |   |
| Total noncurrent                              |   |                                          | 739    |                                                  |   |   | 89 |   |   |   | 618 |   |   |   | 527 |   |   |   | 634 |   |   |   | 118 |   |   |   | 640 |   |   |   | 464 |   |
| Total derivatives                             |   | $                                             | 1,478  |                                                  |   | $ | 260 |   |   | $ | 1,997 |   |   | $ | 1,884 |   |   | $ | 1,394 |   |   | $ | 341 |   |   | $ | 2,037 |   |   | $ | 1,743 |   |

| (a) |   | $342 million and $375 million of net gains associated with derivatives that were no longer designated as hedging instruments are recorded in AOCI at June 30, 2010 and December 31, 2009. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Represents the location on the balance sheet.                                                                                                                                                  |

|                                            |   |                                             |   |                                           |   |   | Gain (Loss) Recognized inIncome on Derivative |   |   |   | Gain (Loss) Recognized inIncome on Related Item |   |
|-------------------------------------------------|--------|--------------------------------------------------|--------|------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|--------|-------------------------------------------------|--------|
| Derivatives in Fair Value Hedging Relationships |   | Hedged Items in Fair Value Hedging Relationships |   | Location ofGains (Losses) Recognized in Income |   |   | Three Months Ended                            |   |   |   | Six Months Ended                                |   |   |   | Three Months Ended |   |   |   | Six Months Ended |   |
|                                            |   |                                             |   |                                           |   |   |                                          |   |   |   |                                            |   |   |   |   |   |   |   |   |   |
| Interest rate swaps                             |   | Fixed rate debt                                  |   | Interest expense                               |   | $      | 16                                            |   |   | $      | 34                                              |   |   | $ | (6 | ) |   | $ | (13 | ) |

|                       |               |                                                         |   |                                                 |   | Three Months Ended                                                 |   |   | Six Months Ended                                                                                                    |   |
|----------------------------|--------------------|--------------------------------------------------------------|--------|------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------|--------|
| Derivative Relationships   |               | Derivative Gain (Loss) Recognized in OCI (Effective Portion) |   | Location of Gains (Losses) Recognized in Income |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |
|                       | Three Months Ended |                                                         |   | Six Months Ended                                     |   |
| Cash Flow Hedges:          |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps        |               | $                                                            | (93    | )                                                    |   | $                                                                  | (101   | )      | Interest expense                                                                                                    |   |   |   |   |   |   |   | $ | (1 | ) |   |   |   |
| Cross-currency swaps       |               |                                                         | 24     |                                                 |   |                                                               | 46     |   | Interest expense                                                                                                    |   | $ | 1 |   |   |   |   |   |   | 1 |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Other income (expense) - net                                                                                        |   |   | 16 |   |   |   |   |   |   | 38 |   |   |   |   |
| Commodity contracts        |               |                                                         | (196   | )                                                    |   |                                                               | 429    |   | Wholesale energy marketing                                                                                          |   |   | 198 |   |   | $ | (52 | ) |   |   | 376 |   |   | $ | (165 | ) |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Fuel                                                                                                                |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Depreciation                                                                                                        |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Energy purchases                                                                                                    |   |   | (207 | ) |   |   | 1 |   |   |   | (311 | ) |   |   | (17 | ) |
| Total                      |               | $                                                            | (265   | )                                                    |   | $                                                                  | 374    |   |                                                                                                                |   | $ | 8 |   |   | $ | (51 | ) |   | $ | 105 |   |   | $ | (182 | ) |
| Net Investment Hedges:     |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign exchange contracts |               | $                                                            | 1      |                                                 |   | $                                                                  | 5      |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Derivatives Not Designated as Hedging Instruments: |   | Location of Gain (Loss) Recognized in Income on Derivatives |   |   | Three Months Ended |   |   |   | Six Months Ended |   |
|----------------------------------------------------|--------|-------------------------------------------------------------|--------|--------|--------------------|--------|--------|--------|------------------|--------|
|                                               |   |                                                        |   |   |               |   |   |   |             |   |
| Foreign exchange contracts                         |   | Other income (expense) - net                                |   |   |               |   |   | $      | 2                |   |
| Commodity contracts                                |   | Unregulated retail electric and gas                         |   | $      | 1                  |   |   |   | 12               |   |
|                                               |   | Wholesale energy marketing                                  |   |   | (435               | )      |   |   | 324              |   |
|                                               |   | Net energy trading margins (a)                              |   |   | (5                 | )      |   |   |             |   |
|                                               |   | Fuel                                                        |   |   | (13                | )      |   |   | (12              | )      |
|                                               |   | Energy purchases                                            |   |   | 205                |   |   |   | (546             | )      |
|                                               |   | Total                                                       |   | $      | (247               | )      |   | $      | (220             | )      |

| (a) |   | Differs from statement of income due to intra-month transactions that PPL defines as spot activity, which is not accounted for as a derivative. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   |                                             |   |                                           |   |   | Gain (Loss) Recognized inIncome on Derivative |   |   |   | Gain (Loss) Recognized inIncome on Related Item |   |
|-------------------------------------------------|--------|--------------------------------------------------|--------|------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|--------|-------------------------------------------------|--------|
| Derivatives in Fair Value Hedging Relationships |   | Hedged Items in Fair Value Hedging Relationships |   | Location ofGains (Losses) Recognized in Income |   |   | Three Months Ended                            |   |   |   | Six Months Ended                                |   |   |   | Three Months Ended |   |   |   | Six Months Ended |   |
|                                            |   |                                             |   |                                           |   |   |                                          |   |   |   |                                            |   |   |   |   |   |   |   |   |   |
| Interest rate swaps                             |   | Fixed rate debt                                  |   | Interest expense                               |   | $      | (7                                            | )      |   | $      | (5                                              | )      |   | $ | 17 |   |   | $ | 23 |   |

|                       |               |                                                         |   |                                                 |   | Three Months Ended                                                 |   |   | Six Months Ended                                                                                                    |   |
|----------------------------|--------------------|--------------------------------------------------------------|--------|------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------|--------|
| Derivative Relationships   |               | Derivative Gain (Loss) Recognized in OCI (Effective Portion) |   | Location of Gains (Losses) Recognized in Income |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |
|                       | Three Months Ended |                                                         |   | SixMonths Ended                                      |   |
| Cash Flow Hedges:          |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps        |               | $                                                            | 23     |                                                 |   | $                                                                  | 43     |   | Interest expense                                                                                                    |   | $ | (1 | ) |   |   |   |   | $ | (2 | ) |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Other income (expense) - net                                                                                        |   |   |   |   |   |   |   |   |   | 4 |   |   |   |   |
| Cross-currency swaps       |               |                                                         | (49    | )                                                    |   |                                                               | (39    | )      | Interest expense                                                                                                    |   |   |   |   |   |   |   |   |   | 1 |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Other income (expense) - net                                                                                        |   |   | (37 | ) |   |   |   |   |   | (15 | ) |   |   |   |
| Commodity contracts        |               |                                                         | 326    |                                                 |   |                                                               | 464    |   | Wholesale energy marketing                                                                                          |   |   | 96 |   |   | $ | (207 | ) |   |   | 144 |   |   | $ | (64 | ) |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Fuel                                                                                                                |   |   | (11 | ) |   |   |   |   |   |   | (10 | ) |   |   | 2 |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Depreciation                                                                                                        |   |   | 1 |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Energy purchases                                                                                                    |   |   | (127 | ) |   |   | 5 |   |   |   | (223 | ) |   |   | (5 | ) |
| Total                      |               | $                                                            | 300    |                                                 |   | $                                                                  | 468    |   |                                                                                                                |   | $ | (79 | ) |   | $ | (202 | ) |   | $ | (100 | ) |   | $ | (67 | ) |
| Net Investment Hedges:     |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign exchange contracts |               | $                                                            | (12    | )                                                    |   | $                                                                  | (11    | )      |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Derivatives Not Designated as Hedging Instruments: |   | Location of Gain (Loss) Recognized in Income on Derivatives |   |   | Three Months Ended |   |   |   | Six Months Ended |   |
|----------------------------------------------------|--------|-------------------------------------------------------------|--------|--------|--------------------|--------|--------|--------|------------------|--------|
|                                               |   |                                                        |   |   |               |   |   |   |             |   |
| Foreign exchange contracts                         |   | Other income (expense) - net                                |   | $      | (11                | )      |   | $      | (11              | )      |
| Commodity contracts                                |   | Unregulated retail electric and gas                         |   |   | 3                  |   |   |   | 6                |   |
|                                               |   | Wholesale energy marketing                                  |   |   | 216                |   |   |   | 500              |   |
|                                               |   | Net energy trading margins (a)                              |   |   | 9                  |   |   |   | (4               | )      |
|                                               |   | Fuel                                                        |   |   | 13                 |   |   |   | 5                |   |
|                                               |   | Energy purchases                                            |   |   | (258               | )      |   |   | (642             | )      |
|                                               |   | Total                                                       |   | $      | (28                | )      |   | $      | (146             | )      |

| (a) |   | Differs from statement of income due to intra-month transactions that PPL defines as spot activity, which is not accounted for as a derivative. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|                                          |   | June 30, 2010                                 |   | December 31, 2009                                |
|-----------------------------------------------|--------|-----------------------------------------------|--------|-------------------------------------------------------|
|                                          |   | Derivatives designated as hedging instruments |   | Derivatives not designated as hedging instruments (a) |   | Derivatives designated as hedging instruments |   | Derivatives not designated as hedging instruments (a) |
|                                          |   |                                          | Assets |                                                  |   |   | Liabilities |   |   |   | Assets |   |   |   | Liabilities |   |   |   | Assets |   |   |   | Liabilities |   |   |   | Assets |   |   |   | Liabilities |   |
| Current:                                      |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Price Risk Management Assets/Liabilities (b): |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cross-currency swaps                          |   | $                                             | 3      |                                                  |   | $ | 12 |   |   |   |   |   |   |   |   |   |   | $ | 1 |   |   | $ | 4 |   |   |   |   |   |   |   |   |   |
| Foreign currency exchange contracts           |   |                                          | 7      |                                                  |   |   |   |   |   | $ | 1 |   |   |   |   |   |   |   | 8 |   |   |   |   |   |   | $ | 2 |   |   |   |   |   |
| Commodity contracts                           |   |                                          | 722    |                                                  |   |   | 96 |   |   |   | 1,378 |   |   | $ | 1,357 |   |   |   | 741 |   |   |   | 219 |   |   |   | 1,395 |   |   | $ | 1,279 |   |
| Total current                                 |   |                                          | 732    |                                                  |   |   | 108 |   |   |   | 1,379 |   |   |   | 1,357 |   |   |   | 750 |   |   |   | 223 |   |   |   | 1,397 |   |   |   | 1,279 |   |
| Noncurrent:                                   |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Price Risk Management Assets/Liabilities (b): |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cross-currency swaps                          |   |                                          | 61     |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 11 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency exchange contracts           |   |                                          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commodity contracts                           |   |                                          | 642    |                                                  |   |   | 73 |   |   |   | 618 |   |   |   | 527 |   |   |   | 578 |   |   |   | 118 |   |   |   | 640 |   |   |   | 464 |   |
| Total noncurrent                              |   |                                          | 703    |                                                  |   |   | 73 |   |   |   | 618 |   |   |   | 527 |   |   |   | 594 |   |   |   | 118 |   |   |   | 640 |   |   |   | 464 |   |
| Total derivatives                             |   | $                                             | 1,435  |                                                  |   | $ | 181 |   |   | $ | 1,997 |   |   | $ | 1,884 |   |   | $ | 1,344 |   |   | $ | 341 |   |   | $ | 2,037 |   |   | $ | 1,743 |   |

| (a) |   | $342 million and $375 million of net gains associated with derivatives that were no longer designated as hedging instruments are recorded in AOCI at June 30, 2010 and December 31, 2009. |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Represents the location on the balance sheet.                                                                                                                                                       |

|                       |               |                                                         |   |                                                 |   | Three Months Ended                                                 |   |   | Six Months Ended                                                                                                    |   |
|----------------------------|--------------------|--------------------------------------------------------------|--------|------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------|--------|
| Derivative Relationships   |               | Derivative Gain (Loss) Recognized in OCI (Effective Portion) |   | Location of Gains (Losses) Recognized in Income |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |
|                       | Three Months Ended |                                                         |   | Six Months Ended                                |   |
| Cash Flow Hedges:          |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Cross-currency swaps       |               | $                                                            | 24     |                                                 |   | $                                                                  | 46     |   | Interest expense                                                                                                    |   | $ | 1 |   |   |   |   |   | $ | 1 |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Other income (expense) - net                                                                                        |   |   | 16 |   |   |   |   |   |   | 38 |   |   |   |   |
| Commodity contracts        |               |                                                         | (196   | )                                                    |   |                                                               | 429    |   | Wholesale energy marketing                                                                                          |   |   | 198 |   |   | $ | (52 | ) |   |   | 376 |   |   | $ | (165 | ) |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Fuel                                                                                                                |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Depreciation                                                                                                        |   |   |   |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Energy purchases                                                                                                    |   |   | (207 | ) |   |   | 1 |   |   |   | (311 | ) |   |   | (17 | ) |
| Total                      |               | $                                                            | (172   | )                                                    |   | $                                                                  | 475    |   |                                                                                                                |   | $ | 8 |   |   | $ | (51 | ) |   | $ | 106 |   |   | $ | (182 | ) |
| Net Investment Hedges:     |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign exchange contracts |               | $                                                            | 1      |                                                 |   | $                                                                  | 5      |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Derivatives Not Designated as Hedging Instruments: |   | Location of Gain (Loss) Recognized in Income on Derivatives |   |   | Three Months Ended |   |   |   | Six Months Ended |   |
|----------------------------------------------------|--------|-------------------------------------------------------------|--------|--------|--------------------|--------|--------|--------|------------------|--------|
|                                               |   |                                                        |   |   |               |   |   |   |             |   |
| Foreign exchange contracts                         |   | Other income (expense) - net                                |   |   |               |   |   | $      | 2                |   |
| Commodity contracts                                |   | Unregulated retail electric and gas                         |   | $      | 1                  |   |   |   | 12               |   |
|                                               |   | Wholesale energy marketing                                  |   |   | (435               | )      |   |   | 324              |   |
|                                               |   | Net energy trading margins (a)                              |   |   | (5                 | )      |   |   |             |   |
|                                               |   | Fuel                                                        |   |   | (13                | )      |   |   | (12              | )      |
|                                               |   | Energy purchases                                            |   |   | 205                |   |   |   | (546             | )      |
|                                               |   | Total                                                       |   | $      | (247               | )      |   | $      | (220             | )      |

| (a) |   | Differs from statement of income due to intra-month transactions that PPL Energy Supply defines as spot activity, which is not accounted for as a derivative. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |               |                                                         |   |                                                 |   | Three Months Ended                                                 |   |   | Six Months Ended                                                                                                    |   |
|----------------------------|--------------------|--------------------------------------------------------------|--------|------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------|--------|
| Derivative Relationships   |               | Derivative Gain (Loss) Recognized in OCI (Effective Portion) |   | Location of Gains (Losses) Recognized in Income |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |   | Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |   |   | Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |   |
|                       | Three Months Ended |                                                         |   | Six Months Ended                                |   |
| Cash Flow Hedges:          |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Cross-currency swaps       |               | $                                                            | (49    | )                                                    |   | $                                                                  | (39    | )      | Interest expense                                                                                                    |   |   |   |   |   |   |   | $ | 1 |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Other income (expense) - net                                                                                        |   | $ | (37 | ) |   |   |   |   |   | (15 | ) |   |   |   |
| Commodity contracts        |               |                                                         | 326    |                                                 |   |                                                               | 464    |   | Wholesale energy marketing                                                                                          |   |   | 96 |   |   | $ | (207 | ) |   |   | 144 |   |   | $ | (64 | ) |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Fuel                                                                                                                |   |   | (11 | ) |   |   |   |   |   |   | (10 | ) |   |   | 2 |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Depreciation                                                                                                        |   |   | 1 |   |   |   |   |   |   |   | 1 |   |   |   |   |   |
|                       |               |                                                         |   |                                                 |   |                                                               |   |   | Energy purchases                                                                                                    |   |   | (127 | ) |   |   | 5 |   |   |   | (223 | ) |   |   | (5 | ) |
| Total                      |               | $                                                            | 277    |                                                 |   | $                                                                  | 425    |   |                                                                                                                |   | $ | (78 | ) |   | $ | (202 | ) |   | $ | (102 | ) |   | $ | (67 | ) |
| Net Investment Hedges:     |               |                                                         |   |                                                 |   |                                                               |   |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign exchange contracts |               | $                                                            | (12    | )                                                    |   | $                                                                  | (11    | )      |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Derivatives Not Designated as Hedging Instruments: |   | Location of Gain (Loss) Recognized in Income on Derivatives |   |   | Three Months Ended |   |   |   | Six Months Ended |   |
|----------------------------------------------------|--------|-------------------------------------------------------------|--------|--------|--------------------|--------|--------|--------|------------------|--------|
|                                               |   |                                                        |   |   |               |   |   |   |             |   |
| Foreign exchange contracts                         |   | Other income (expense) - net                                |   | $      | (11                | )      |   | $      | (11              | )      |
| Commodity contracts                                |   | Unregulated retail electric and gas                         |   |   | 3                  |   |   |   | 6                |   |
|                                               |   | Wholesale energy marketing                                  |   |   | 216                |   |   |   | 500              |   |
|                                               |   | Net energy trading margins (a)                              |   |   | 9                  |   |   |   | (4               | )      |
|                                               |   | Fuel                                                        |   |   | 13                 |   |   |   | 5                |   |
|                                               |   | Energy purchases                                            |   |   | (258               | )      |   |   | (642             | )      |
|                                               |   | Total                                                       |   | $      | (28                | )      |   | $      | (146             | )      |

| (a) |   | Differs from statement of income due to intra-month transactions that PPL Energy Supply defines as spot activity, which is not accounted for as a derivative. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15.   | Goodwill |
|-----------------|----------|

|                                      |   | Supply |   |   |   | International Delivery |   |   |   | Total  |   |
|-------------------------------------------|--------|--------|--------|--------|--------|------------------------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |                   |   |   |   |   |   |
| Balance at December 31, 2009 (a)     | $      | 91     |   |   | $      | 715                    |   |   | $      | 806    |   |
| Effect of foreign currency exchange rates |   |   |   |   |   | (85                    | )      |   |   | (85    | )      |
| Balance at June 30, 2010 (a)    | $      | 91     |   |   | $      | 630                    |   |   | $      | 721    |   |

| (a) |   | There were no accumulated impairment losses recorded. |
|-----|--------|-------------------------------------------------------|

| 16.   | Asset Retirement Obligations |
|-----------------|------------------------------|

| Balance at December 31, 2009                 |   | $      | 426 |   |   |
|---------------------------------------------------|--------|--------|-----|--------|--------|
| Accretion expense                                 |   |   | 17  |   |   |
| Changes in estimated cash flow or settlement date |   |   | 5   |   |   |
| Obligations settled                               |   |   | (8  | )      |   |
| Balance at June 30, 2010                     |   | $      | 440 |   |   |

|                  |   | June 30, 2010 |   | December 31, 2009 |
|-----------------------|--------|--------------------|--------|------------------------|
|                  |   |               |   |                   |   |   |   |   |
| Current portion (a)   |   | $                  | 13     |                   |   | $ | 10 |   |
| Long-term portion (b) |   |               | 427    |                   |   |   | 416 |   |
| Total                 |   | $                  | 440    |                   |   | $ | 426 |   |

| (a) |   | Included in "Other current liabilities."    |
|-----|--------|---------------------------------------------|
| (b) |   | Included in "Asset retirement obligations." |

| 17.   | Available-for-Sale Securities |
|-----------------|-------------------------------|

|                                   |   | June 30, 2010 |           | December 31, 2009 |   |
|----------------------------------------|--------|--------------------|----------------|------------------------|--------|
|                                   |   |               | Amortized Cost |                   |   |   | Gross Unrealized Gains |   |   |   | Amortized Cost |   |   |   | Gross Unrealized Gains |   |   |
| PPL                                    |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NDT funds:                             |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents              |   | $                  | 7              |                   |   |   |   |   |   | $ | 7 |   |   |   |   |   |   |
| Equity securities:                     |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. large-cap                         |   |               | 176            |                   |   | $ | 68 |   |   |   | 170 |   |   | $ | 89 |   |   |
| U.S. mid/small-cap                     |   |               | 65             |                   |   |   | 29 |   |   |   | 65 |   |   |   | 36 |   |   |
| Debt securities:                       |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                          |   |               | 76             |                   |   |   | 5 |   |   |   | 72 |   |   |   | 2 |   |   |
| U.S. government agency                 |   |               | 6              |                   |   |   | 1 |   |   |   | 9 |   |   |   |   |   |   |
| Municipality                           |   |               | 65             |                   |   |   | 2 |   |   |   | 63 |   |   |   | 2 |   |   |
| Investment-grade corporate             |   |               | 30             |                   |   |   | 2 |   |   |   | 28 |   |   |   | 1 |   |   |
| Residential mortgage-backed securities |   |               | 1              |                   |   |   |   |   |   |   | 1 |   |   |   |   |   |   |
| Receivables/payables, net              |   |               | 2              |                   |   |   |   |   |   |   | 3 |   |   |   |   |   |   |
| Total NDT funds                        |   |               | 428            |                   |   |   | 107 |   |   |   | 418 |   |   |   | 130 |   |   |
| Auction rate securities                |   |               | 25             |                   |   |   |   |   |   |   | 25 |   |   |   |   |   |   |
| Total                                  |   | $                  | 453            |                   |   | $ | 107 |   |   | $ | 443 |   |   | $ | 130 |   |   |
|                                   |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PPL Energy Supply                      |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |
| NDT funds:                             |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents              |   | $                  | 7              |                   |   |   |   |   |   | $ | 7 |   |   |   |   |   |
| Equity securities:                     |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. large-cap                         |   |               | 176            |                   |   | $ | 68 |   |   |   | 170 |   |   | $ | 89 |   |
| U.S. mid/small-cap                     |   |               | 65             |                   |   |   | 29 |   |   |   | 65 |   |   |   | 36 |   |
| Debt securities:                       |   |               |           |                   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury                          |   |               | 76             |                   |   |   | 5 |   |   |   | 72 |   |   |   | 2 |   |
| U.S. government agency                 |   |               | 6              |                   |   |   | 1 |   |   |   | 9 |   |   |   |   |   |
| Municipality                           |   |               | 65             |                   |   |   | 2 |   |   |   | 63 |   |   |   | 2 |   |
| Investment-grade corporate             |   |               | 30             |                   |   |   | 2 |   |   |   | 28 |   |   |   | 1 |   |
| Residential mortgage-backed securities |   |               | 1              |                   |   |   |   |   |   |   | 1 |   |   |   |   |   |
| Receivables/payables, net              |   |               | 2              |                   |   |   |   |   |   |   | 3 |   |   |   |   |   |
| Total NDT funds                        |   |               | 428            |                   |   |   | 107 |   |   |   | 418 |   |   |   | 130 |   |
| Auction rate securities                |   |               | 20             |                   |   |   |   |   |   |   | 20 |   |   |   |   |   |
| Total                                  |   | $                  | 448            |                   |   | $ | 107 |   |   | $ | 438 |   |   | $ | 130 |   |

|              |   |   | MaturityLess Than1 Year |   |   |   | Maturity1-5 Years |   |   |   | Maturity5-10 Years |   |   |   | Maturityin Excessof 10 Years |   |   |   | Total  |   |
|-------------------|--------|--------|-------------------------|--------|--------|--------|-------------------|--------|--------|--------|--------------------|--------|--------|--------|------------------------------|--------|--------|--------|--------|--------|
| PPL               |   |   |                    |   |   |   |              |   |   |   |               |   |   |   |                         |   |   |   |   |   |
| Amortized cost    |   | $      | 12                      |   |   | $      | 65                |   |   | $      | 56                 |   |   | $      | 70                           |   |   | $      | 203    |   |
| Fair value        |   |   | 12                      |   |   |   | 68                |   |   |   | 60                 |   |   |   | 73                           |   |   |   | 213    |   |
|              |   |   |                    |   |   |   |              |   |   |   |               |   |   |   |                         |   |   |   |   |   |
| PPL Energy Supply |   |   |                    |   |   |   |              |   |   |   |               |   |   |   |                         |   |   |   |   |   |
| Amortized cost    |   | $      | 12                      |   |   | $      | 65                |   |   | $      | 56                 |   |   | $      | 65                           |   |   | $      | 198    |   |
| Fair value        |   |   | 12                      |   |   |   | 68                |   |   |   | 60                 |   |   |   | 68                           |   |   |   | 208    |   |

|                                      |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                      |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| PPL and PPL Energy Supply                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |
| Proceeds from sales of NDT securities (a) |   | $                                | 24     |                           |   | $ | 54 |   |   | $ | 68 |   |   | $ | 141 |   |
| Other proceeds from sales                 |   |                             |   |                           |   |   | 150 |   |   |   |   |   |   |   | 150 |   |
| Gross realized gains (b)                  |   |                             | 4      |                           |   |   | 6 |   |   |   | 9 |   |   |   | 13 |   |
| Gross realized losses (b)                 |   |                             | (2     | )                              |   |   | (3 | ) |   |   | (3 | ) |   |   | (13 | ) |

| (a) |   | These proceeds, along with deposits of amounts collected from customers, are used to pay income taxes and fees related to managing the trust.  Remaining proceeds are reinvested in the trust.  Collections from customers are no longer occurring in 2010. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Excludes the impact of other-than-temporary impairment charges recognized in the Statements of Income.                                                                                                                                                                          |

----

|                                  |   | Three Months EndedJune 30, |   | Six Months EndedJune 30, |
|---------------------------------------|--------|---------------------------------|--------|-------------------------------|
|                                  |   | 2010                            |   | 2009                          |   | 2010 |   | 2009 |
|                                  |   |                            |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to PPL |   | $                               | 85     |                          |   | $ | (7 | ) |   | $ | 335 |   |   | $ | 234 |   |
| EPS - basic                           |   | $                               | 0.22   |                          |   | $ | (0.02 | ) |   | $ | 0.88 |   |   | $ | 0.62 |   |
| EPS - diluted                         |   | $                               | 0.22   |                          |   | $ | (0.02 | ) |   | $ | 0.88 |   |   | $ | 0.62 |   |

|                                  |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|---------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                  |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Supply                                |   | $                                | 30     |                           |   | $ | (86 | ) |   | $ | 167 |   |   | $ | 19 |   |
| International Delivery                |   |                             | 58     |                           |   |   | 62 |   |   |   | 134 |   |   |   | 149 |   |
| Pennsylvania Delivery                 |   |                             | 16     |                           |   |   | 17 |   |   |   | 53 |   |   |   | 66 |   |
| Unallocated Costs (a)                 |   |                             | (19    | )                              |   |   |   |   |   |   | (19 | ) |   |   |   |   |
| Net income (loss) attributable to PPL |   | $                                | 85     |                           |   | $ | (7 | ) |   | $ | 335 |   |   | $ | 234 |   |

| (a) |   | Includes $6 million, after tax, of certain acquisition-related costs, including advisory, accounting, and legal fees associated with the pending acquisition of E.ON U.S. that are recorded in "Other Income (Expense) - net" on the Statement of Income.  Also includes $13 million, after tax, of amortization of deferred Bridge Facility financing costs that are recorded in "Interest Expense" on the Statement of Income.  See Notes 7 and 8 to the Financial Statements for additional information on the pending acquisition and related financing. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                   |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|----------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                   |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| Energy revenues                        |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| External (a)                           |   | $                                | 699    |                           |   | $ | 684 |   |   | $ | 2,623 |   |   | $ | 1,863 |   |
| Intersegment                           |   |                             | 64     |                           |   |   | 411 |   |   |   | 179 |   |   |   | 908 |   |
| Energy-related businesses              |   |                             | 104    |                           |   |   | 97 |   |   |   | 188 |   |   |   | 189 |   |
| Total operating revenues               |   |                             | 867    |                           |   |   | 1,192 |   |   |   | 2,990 |   |   |   | 2,960 |   |
| Fuel and energy purchases              |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| External (a)                           |   |                             | 349    |                           |   |   | 833 |   |   |   | 1,747 |   |   |   | 2,005 |   |
| Intersegment                           |   |                             |   |                           |   |   | 20 |   |   |   | 1 |   |   |   | 40 |   |
| Other operation and maintenance        |   |                             | 253    |                           |   |   | 225 |   |   |   | 534 |   |   |   | 457 |   |
| Depreciation                           |   |                             | 68     |                           |   |   | 57 |   |   |   | 133 |   |   |   | 107 |   |
| Taxes, other than income               |   |                             | 12     |                           |   |   | 8 |   |   |   | 23 |   |   |   | 15 |   |
| Energy-related businesses              |   |                             | 96     |                           |   |   | 94 |   |   |   | 180 |   |   |   | 182 |   |
| Total operating expenses               |   |                             | 778    |                           |   |   | 1,237 |   |   |   | 2,618 |   |   |   | 2,806 |   |
| Other Income (Expense) - net |   |                             | 6      |                           |   |   | 6 |   |   |   | 11 |   |   |   | 35 |   |
| Other-Than-Temporary Impairments       |   |                             | 3      |                           |   |   | 1 |   |   |   | 3 |   |   |   | 18 |   |
| Interest Expense                       |   |                             | 53     |                           |   |   | 50 |   |   |   | 110 |   |   |   | 97 |   |
| Income Taxes                           |   |                             | 9      |                           |   |   | (36 | ) |   |   | 103 |   |   |   | 26 |   |
| Loss from Discontinued Operations      |   |                             |   |                           |   |   | (32 | ) |   |   |   |   |   |   | (29 | ) |
| Net Income (Loss) Attributable to PPL  |   | $                                | 30     |                           |   | $ | (86 | ) |   | $ | 167 |   |   | $ | 19 |   |

| (a) |   | Includes impact from energy-related economic activity.  See "Commodity Price Risk (Non-trading) - Economic Activity" in Note 14 to the Financial Statements for additional information. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                  |   | June 30, 2010 vs. June 30, 2009 |
|-------------------------------------------------------|--------|-------------------------------------------|
|                                                  |   | Three Months Ended                        |   | Six Months Ended |
|                                                  |   |                                      |   |   |   |   |   |   |
| Eastern U.S. non-trading margins                      |   | $                                         | 132 |   |   | $ | 322 |   |
| Western U.S. non-trading margins                      |   |                                      | 6 |   |   |   | 6 |   |
| Net energy trading margins                            |   |                                      | (2 | ) |   |   | 11 |   |
| Other operation and maintenance                       |   |                                      | (10 | ) |   |   | (31 | ) |
| Depreciation                                          |   |                                      | (6 | ) |   |   | (15 | ) |
| Other income (expense) - net                          |   |                                      | 2 |   |   |   | (7 | ) |
| Discontinued operations, net of special item (Note 8) |   |                                      | 5 |   |   |   | 6 |   |
| Other                                                 |   |                                      | 3 |   |   |   | 1 |   |
| Special items                                         |   |                                      | (14 | ) |   |   | (145 | ) |
|                                                  |   | $                                         | 116 |   |   | $ | 148 |   |

| · | See "Domestic Gross Energy Margins" for an explanation of non-trading margins and net energy trading margins.                                                                                                                                       |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                |
| · | Other operation and maintenance increased for both periods primarily due to higher payroll costs.  The six-month period also increased due to higher outage costs at eastern generation plants and higher uncollectible accounts expense. |
|   |                                                                                                                                                                                                                                                |
| · | Depreciation increased for both periods primarily due to the completion of the Brunner Island environmental projects, which impacted depreciation expense primarily beginning in the second half of 2009.                                           |
|   |                                                                                                                                                                                                                                                |
| · | Other income (expense) - net decreased for the six month period primarily due to gains related to the extinguishment of notes in 2009, partially offset by higher earnings on securities in PPL Susquehanna's NDT funds in 2010.                    |

|                                                         |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|--------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                         |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                         |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted energy-related economic activity, net (a)           |   | $                                | (54    | )                              |   | $ | (88 | ) |   | $ | (119 | ) |   | $ | (38 | ) |
| Sales of assets:                                             |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Long Island generation business (Note 8)                     |   |                             |   |                           |   |   | (34 | ) |   |   |   |   |   |   | (34 | ) |
| Sundance indemnification                                     |   |                             | 1      |                           |   |   |   |   |   |   | 1 |   |   |   |   |   |
| Impairments:                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustments - NDT investments (b)                            |   |                             |   |                           |   |   | 2 |   |   |   |   |   |   |   | (1 | ) |
| Impacts from emission allowances (c)                         |   |                             | (5     | )                              |   |   |   |   |   |   | (7 | ) |   |   | (15 | ) |
| Other asset impairments                                      |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (2 | ) |
| Pending E.ON U.S. acquisition-related costs:                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Monetization of certain full-requirement sales contracts (a) |   |                             | (75    | )                              |   |   |   |   |   |   | (75 | ) |   |   |   |   |
| Workforce reduction (Note 9)                            |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (6 | ) |
| Other:                                                       |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Montana hydroelectric litigation (Note 10)                   |   |                             | (1     | )                              |   |   |   |   |   |   | (33 | ) |   |   |   |   |
| Health Care Reform - tax impact (Note 9)                     |   |                             |   |                           |   |   |   |   |   |   | (8 | ) |   |   |   |   |
| Total                                                        |   | $                                | (134   | )                              |   | $ | (120 | ) |   | $ | (241 | ) |   | $ | (96 | ) |

| (a) |   | See "Reconciliation of Economic Activity" below.                                                                                                                                                                                                                                                                          |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Represents other-than-temporary impairment charges on securities, including reversals of previous impairments when securities previously impaired were sold.                                                                                                                                                              |
| (c) |   | The six months ended June 30, 2009 includes a pre-tax gain of $4 million related to the settlement of a dispute regarding the sale of certain annual nitrogen oxide allowance put options.  Also, see Note 13 to the Financial Statements for information on impairments of sulfur dioxide emission allowances. |

|                                                                               |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                                               |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                                               |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Revenues                                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Unregulated retail electric and gas                                                |   | $                                | (2     | )                              |   | $ | 1 |   |   | $ | 8 |   |   | $ | 2 |   |
| Wholesale energy marketing                                                         |   |                             | (666   | )                              |   |   | (112 | ) |   |   | (242 | ) |   |   | 240 |   |
| Operating Expenses                                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel                                                                               |   |                             | (8     | )                              |   |   | 26 |   |   |   | (3 | ) |   |   | 28 |   |
| Energy purchases                                                                   |   |                             | 445    |                           |   |   | (65 | ) |   |   | (118 | ) |   |   | (334 | ) |
| Energy-related economic activity (a)                                               |   |                             | (231   | )                              |   |   | (150 | ) |   |   | (355 | ) |   |   | (64 | ) |
| Option premiums (b)                                                                |   |                             | 11     |                           |   |   |   |   |   |   | 25 |   |   |   |   |   |
| Adjusted energy-related economic activity                                          |   |                             | (220   | )                              |   |   | (150 | ) |   |   | (330 | ) |   |   | (64 | ) |
| Less:  Monetization of certain full-requirement sales contracts (c) |   |                             | (127   | )                              |   |   |   |   |   |   | (127 | ) |   |   |   |   |
| Adjusted energy-related economic activity, net - pre tax                           |   | $                                | (93    | )                              |   | $ | (150 | ) |   | $ | (203 | ) |   | $ | (64 | ) |
|                                                                               |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted energy-related economic activity, net - after tax                         |   | $                                | (54    | )                              |   | $ | (88 | ) |   | $ | (119 | ) |   | $ | (38 | ) |
| Monetization of certain full-requirement sales contracts - after tax (c)      |   | $                                | (75    | )                              |   |   |   |   |   | $ | (75 | ) |   |   |   |   |

| (a) |   | The components of this item are from the table within "Commodity Price Risk (Non-trading) - Economic Activity" in Note 14 to the Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Adjustment for the net deferral and amortization of option premiums over the delivery period of the item that was hedged or upon realization.  After-tax amounts for the three and six months ended June 30, 2010 were $6 million and $14 million.                                                                                                                                                                                                                                                                                                                                                                          |
| (c) |   | See "Commodity Price Risk - (Non-trading) - Monetization of Certain Full-Requirement Sales Contracts" in Note 14 to the Financial Statements for additional information.  This item includes the $60 million loss ($36 million after tax) referenced in Note 14 associated with full-requirement sales contracts that have been monetized.  Also included in this item is a net loss of $67 million ($39 million after tax) on economic activity related to these full-requirement sales contracts.  Such amount was previously recorded in "Adjusted energy-related economic activity, net." |

|                                   |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|----------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                   |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                   |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility revenues                       |   | $                                | 172    |                           |   | $ | 155 |   |   | $ | 375 |   |   | $ | 331 |   |
| Energy-related businesses              |   |                             | 6      |                           |   |   | 8 |   |   |   | 16 |   |   |   | 15 |   |
| Total operating revenues               |   |                             | 178    |                           |   |   | 163 |   |   |   | 391 |   |   |   | 346 |   |
| Other operation and maintenance        |   |                             | 39     |                           |   |   | 31 |   |   |   | 83 |   |   |   | 65 |   |
| Depreciation                           |   |                             | 29     |                           |   |   | 27 |   |   |   | 58 |   |   |   | 53 |   |
| Taxes, other than income               |   |                             | 13     |                           |   |   | 13 |   |   |   | 27 |   |   |   | 26 |   |
| Energy-related businesses              |   |                             | 4      |                           |   |   | 4 |   |   |   | 8 |   |   |   | 7 |   |
| Total operating expenses               |   |                             | 85     |                           |   |   | 75 |   |   |   | 176 |   |   |   | 151 |   |
| Other Income (Expense) - net |   |                             | 1      |                           |   |   | (13 | ) |   |   | 2 |   |   |   | (11 | ) |
| Interest Expense                       |   |                             | 33     |                           |   |   | 18 |   |   |   | 64 |   |   |   | 31 |   |
| Income Taxes                           |   |                             | 3      |                           |   |   | (5 | ) |   |   | 19 |   |   |   | 4 |   |
| Net Income Attributable to PPL         |   | $                                | 58     |                           |   | $ | 62 |   |   | $ | 134 |   |   | $ | 149 |   |

|                            | June 30, 2010 vs. June 30, 2009 |
|---------------------------------|-------------------------------------------|
|                            | Three Months Ended                        |   | Six Months Ended |
| U.K.                            |                                      |   |   |   |   |   |   |
| Utility revenues                | $                                         | 10 |   |   | $ | 16 |   |
| Other operation and maintenance |                                      | (6 | ) |   |   | (14 | ) |
| Interest expense                |                                      | (10 | ) |   |   | (22 | ) |
| Income taxes                    |                                      | (12 | ) |   |   | (25 | ) |
| Foreign currency exchange rates |                                      | 1 |   |   |   | 8 |   |
| Other                           |                                      |   |   |   |   | (1 | ) |
| U.S. Income taxes               |                                      | 6 |   |   |   | 11 |   |
| Other                           |                                      | 2 |   |   |   | 4 |   |
| Special items                   |                                      | 5 |   |   |   | 8 |   |
|                            | $                                         | (4 | ) |   | $ | (15 | ) |

| · | Higher U.K. utility revenues for both periods primarily due to price increases in April 2010 and 2009.  The six-month period was partially offset by revised estimates of electricity network line losses.                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                    |
| · | Higher U.K. other operation and maintenance for both periods primarily due to higher pension expenses resulting from an increase in amortization of actuarial losses and a decrease in the discount rate.                                                                                               |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Higher U.K. interest expense for both periods on the Index-linked Senior Unsecured Notes primarily due to higher inflation rates and higher interest expense related to the March 2010 debt issuance.                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Higher U.K. income taxes for both periods primarily due to favorable settlements of uncertain tax positions in 2009.                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Changes in U.K. foreign currency exchange rates positively affected WPD earnings for both periods.  The weighted-average exchange rate for the British pound sterling was $1.51 and $1.56 for the three and six months ended June 30, 2010, compared with $1.46 for the same periods in 2009. |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Lower U.S. income taxes for both periods due to favorable foreign source income tax benefits as a result of dividend planning and higher U.K. pension contributions.                                                                                                                                    |

|                                                              |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                              |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                              |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency-related economic hedges - unrealized impacts (a) |   | $                                | (1     | )                              |   | $ | (6 | ) |   | $ | (1 | ) |   | $ | (6 | ) |
| Asset impairments                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (1 | ) |
| Workforce reduction (Note 9)                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (2 | ) |
| Total                                                             |   | $                                | (1     | )                              |   | $ | (6 | ) |   | $ | (1 | ) |   | $ | (9 | ) |

| (a) |   | Represents unrealized gains (losses) on contracts that economically hedge anticipated earnings denominated in British pound sterling. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|                                                |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-----------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
| Operating revenues                                  |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| External                                            |   | $                                | 522    |                           |   | $ | 727 |   |   | $ | 1,334 |   |   | $ | 1,617 |   |
| Intersegment                                        |   |                             |   |                           |   |   | 20 |   |   |   | 1 |   |   |   | 40 |   |
| Total operating revenues                            |   |                             | 522    |                           |   |   | 747 |   |   |   | 1,335 |   |   |   | 1,657 |   |
| Energy purchases                                    |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| External                                            |   |                             | 209    |                           |   |   | 31 |   |   |   | 619 |   |   |   | 63 |   |
| Intersegment                                        |   |                             | 64     |                           |   |   | 411 |   |   |   | 179 |   |   |   | 908 |   |
| Other operation and maintenance                     |   |                             | 131    |                           |   |   | 98 |   |   |   | 251 |   |   |   | 204 |   |
| Amortization of recoverable transition costs        |   |                             |   |                           |   |   | 70 |   |   |   |   |   |   |   | 154 |   |
| Depreciation                                        |   |                             | 33     |                           |   |   | 30 |   |   |   | 67 |   |   |   | 63 |   |
| Taxes, other than income                            |   |                             | 29     |                           |   |   | 46 |   |   |   | 76 |   |   |   | 98 |   |
| Total operating expenses                            |   |                             | 466    |                           |   |   | 686 |   |   |   | 1,192 |   |   |   | 1,490 |   |
| Other Income (Expense) - net                        |   |                             | 2      |                           |   |   | 1 |   |   |   | 4 |   |   |   | 5 |   |
| Interest Expense                                    |   |                             | 24     |                           |   |   | 31 |   |   |   | 50 |   |   |   | 60 |   |
| Income Taxes                                        |   |                             | 11     |                           |   |   | 10 |   |   |   | 32 |   |   |   | 37 |   |
| Net Income                                          |   |                             | 23     |                           |   |   | 21 |   |   |   | 65 |   |   |   | 75 |   |
| Net Income Attributable to Noncontrolling Interests |   |                             | 7      |                           |   |   | 4 |   |   |   | 12 |   |   |   | 9 |   |
| Net Income Attributable to PPL                      |   | $                                | 16     |                           |   | $ | 17 |   |   | $ | 53 |   |   | $ | 66 |   |

|                              | June 30, 2010 vs. June 30, 2009 |
|-----------------------------------|-------------------------------------------|
|                              | Three Months Ended                        |   | Six Months Ended |
|                              |                                      |   |   |   |   |   |   |
| Domestic gross delivery margins   | $                                         | 8 |   |   | $ | (1 | ) |
| Other operation and maintenance   |                                      | (9 | ) |   |   | (16 | ) |
| Depreciation                      |                                      | (2 | ) |   |   | (2 | ) |
| Interest expense                  |                                      | 4 |   |   |   | 6 |   |
| Noncontrolling interests (Note 7) |                                      | (3 | ) |   |   | (3 | ) |
| Other                             |                                      | 1 |   |   |   | (3 | ) |
| Special items                     |                                      |   |   |   |   | 6 |   |
|                              | $                                         | (1 | ) |   | $ | (13 | ) |

| · | See "Domestic Gross Delivery Margins" for an explanation of margins generated by PPL's domestic regulated electric delivery operations.                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                               |
| · | Other operation and maintenance increased for both periods primarily due to higher payroll costs due to increased staffing and higher vegetation management costs. |
|   |                                                                                                                                                               |
| · | Interest expense decreased for both periods primarily due to long-term debt retirements in the third quarter of 2009.                                              |

|                              |   | Six Months Ended June 30, 2009 |
|-----------------------------------|--------|-------------------------------------|
|                              |   |                                |   |   |
| Asset impairments                 |   | $                                   | (1 | ) |
| Workforce reduction (Note 9) |   |                                | (5 | ) |
| Total                             |   | $                                   | (6 | ) |

| · | "Domestic Gross Energy Margins" is a single financial performance measure of PPL's domestic energy non-trading and trading activities.  In calculating this measure, the Supply segment's energy revenues are offset by the cost of fuel and energy purchases, and adjusted for other related items.  This performance measure excludes utility revenues and includes PLR revenues from energy sales to PPL Electric by PPL EnergyPlus.  In addition, PPL excludes from "Domestic Gross Energy Margins" energy-related economic activity, which includes the changes in fair value of positions used to economically hedge a portion of the economic value of PPL's generation assets, full-requirement and retail activities.  This economic value is subject to changes in fair value due to market price volatility of the input and output commodities (e.g., fuel and power) prior to the delivery period that was hedged.  Also included in this energy-related economic activity is the ineffective portion of qualifying cash flow hedges, losses on the monetization of certain full-requirement sales contracts and premium amortization associated with options.  This economic activity is deferred, with the exception of the losses on the full-requirement sales contracts that were monetized, and included in domestic gross energy margins over the delivery period that was hedged or upon realization.  PPL believes that "Domestic Gross Energy Margins" provides another criterion to make investment decisions.  This performance measure is used, in conjunction with other information, internally by senior management and the Board of Directors to manage its domestic energy non-trading and trading activities.  PPL's management also uses "Domestic Gross Energy Margins" in measuring certain corporate performance goals used in determining variable compensation. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| · | "Domestic Gross Delivery Margins" is a single financial performance measure of PPL's domestic regulated electric delivery operations, which includes transmission and distribution activities, including PLR supply.  In calculating this measure, domestic regulated utility revenues and expenses associated with approved recovery mechanisms, including energy provided as a PLR, are offset.  These mechanisms allow for full cost recovery of certain expenses; therefore, certain expenses and revenues offset with minimal impact on earnings.  As a result, this measure represents the net revenues from PPL's domestic regulated electric delivery operations.  This performance measure is used, in conjunction with other information, internally by senior management and the Board of Directors to manage its domestic regulated electric delivery operations.  PPL believes that "Domestic Gross Delivery Margins" provides another criterion to make investment decisions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|                                             |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|--------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                             |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                             |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income (a)                             |   | $                                | 238    |                           |   | $ | 104 |   |   | $ | 730 |   |   | $ | 516 |   |
| Adjustments:                                     |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility (a)                                      |   |                             | (692   | )                              |   |   | (881 | ) |   |   | (1,706 | ) |   |   | (1,946 | ) |
| Energy-related businesses, net (b)               |   |                             | (10    | )                              |   |   | (7 | ) |   |   | (16 | ) |   |   | (15 | ) |
| Other operation and maintenance (a)              |   |                             | 423    |                           |   |   | 354 |   |   |   | 868 |   |   |   | 726 |   |
| Amortization of recoverable transition costs (a) |   |                             |   |                           |   |   | 70 |   |   |   |   |   |   |   | 154 |   |
| Depreciation (a)                                 |   |                             | 130    |                           |   |   | 114 |   |   |   | 258 |   |   |   | 223 |   |
| Taxes, other than income (a)                |   |                             | 54     |                           |   |   | 67 |   |   |   | 126 |   |   |   | 139 |   |
| Revenue adjustments (c)                          |   |                             | 719    |                           |   |   | 530 |   |   |   | 392 |   |   |   | 682 |   |
| Expense adjustments (c)                          |   |                             | (241   | )                              |   |   | 38 |   |   |   | 712 |   |   |   | 305 |   |
| Domestic gross energy margins                    |   | $                                | 621    |                           |   | $ | 389 |   |   | $ | 1,364 |   |   | $ | 784 |   |

| (a) |   | As reported on the Statements of Income.                                                                              |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------|
| (b) |   | Amount represents the net of "Energy-related businesses" revenue and expense as reported on the Statements of Income. |
| (c) |   | The components of these adjustments are detailed in the tables below.                                                 |

|                                                                   |   | Three Months Ended June 30, |
|------------------------------------------------------------------------|--------|----------------------------------|
|                                                                   |   | 2010                             |   | 2009 |   | Change |
| Revenue                                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| Unregulated retail electric and gas (a)                           |   | $                                | 101 |   |   | $ | 32 |   |   | $ | 69 |   |
| Wholesale energy marketing (a)                                         |   |                             | 595 |   |   |   | 646 |   |   |   | (51 | ) |
| Net energy trading margins (a)                                         |   |                             | 5 |   |   |   | 7 |   |   |   | (2 | ) |
| Revenue adjustments (b)                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)                       |   |                             | 656 |   |   |   | 111 |   |   |   | 545 |   |
| PLR revenue from energy supplied to PPL Electric by PPL EnergyPlus (d) |   |                             | 64 |   |   |   | 411 |   |   |   | (347 | ) |
| Gains (losses) from sale of RECs (e)                              |   |                             | (1 | ) |   |   | 1 |   |   |   | (2 | ) |
| Revenues from Supply segment discontinued operations (f)               |   |                             |   |   |   |   | 7 |   |   |   | (7 | ) |
| Total revenue adjustments                                              |   |                             | 719 |   |   |   | 530 |   |   |   | 189 |   |
|                                                                   |   |                             | 1,420 |   |   |   | 1,215 |   |   |   | 205 |   |
| Expense                                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| Fuel (a)                                                               |   |                             | 263 |   |   |   | 186 |   |   |   | 77 |   |
| Energy purchases (a)                                                   |   |                             | 295 |   |   |   | 678 |   |   |   | (383 | ) |
| Expense adjustments (b)                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)                       |   |                             | 436 |   |   |   | (39 | ) |   |   | 475 |   |
| External PLR energy purchases (g)                                      |   |                             | (209 | ) |   |   | (11 | ) |   |   | (198 | ) |
| Other                                                                  |   |                             | 14 |   |   |   | 12 |   |   |   | 2 |   |
| Total expense adjustments                                              |   |                             | 241 |   |   |   | (38 | ) |   |   | 279 |   |
|                                                                   |   |                             | 799 |   |   |   | 826 |   |   |   | (27 | ) |
| Domestic gross energy margins                                          |   | $                                | 621 |   |   | $ | 389 |   |   | $ | 232 |   |

|                                                                   |   | Six Months Ended June 30, |
|------------------------------------------------------------------------|--------|--------------------------------|
|                                                                   |   | 2010                           |   | 2009 |   | Change |
| Revenue                                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| Unregulated retail electric and gas (a)                           |   | $                              | 205 |   |   | $ | 74 |   |   | $ | 131 |   |
| Wholesale energy marketing (a)                                         |   |                           | 2,405 |   |   |   | 1,796 |   |   |   | 609 |   |
| Net energy trading margins (a)                                         |   |                           | 16 |   |   |   | (5 | ) |   |   | 21 |   |
| Revenue adjustments (b)                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)                       |   |                           | 209 |   |   |   | (242 | ) |   |   | 451 |   |
| PLR revenue from energy supplied to PPL Electric by PPL EnergyPlus (d) |   |                           | 179 |   |   |   | 908 |   |   |   | (729 | ) |
| Gains from sale of RECs (e)                                            |   |                           |   |   |   |   | 1 |   |   |   | (1 | ) |
| Revenues from Supply segment discontinued operations (f)               |   |                           | 4 |   |   |   | 15 |   |   |   | (11 | ) |
| Total revenue adjustments                                              |   |                           | 392 |   |   |   | 682 |   |   |   | (290 | ) |
|                                                                   |   |                           | 3,018 |   |   |   | 2,547 |   |   |   | 471 |   |
| Expense                                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| Fuel (a)                                                               |   |                           | 496 |   |   |   | 444 |   |   |   | 52 |   |
| Energy purchases (a)                                                   |   |                           | 1,870 |   |   |   | 1,624 |   |   |   | 246 |   |
| Expense adjustments (b)                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)                       |   |                           | (121 | ) |   |   | (306 | ) |   |   | 185 |   |
| External PLR energy purchases (g)                                      |   |                           | (618 | ) |   |   | (23 | ) |   |   | (595 | ) |
| Other                                                                  |   |                           | 27 |   |   |   | 24 |   |   |   | 3 |   |
| Total expense adjustments                                              |   |                           | (712 | ) |   |   | (305 | ) |   |   | (407 | ) |
|                                                                   |   |                           | 1,654 |   |   |   | 1,763 |   |   |   | (109 | ) |
| Domestic gross energy margins                                          |   | $                              | 1,364 |   |   | $ | 784 |   |   | $ | 580 |   |

| (a) |   | As reported on the Statements of Income.                                                                                                                                                                                                                                                                                                                                                        |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | To include/exclude the impact of any revenues and expenses consistent with the way management reviews domestic gross energy margins.                                                                                                                                                                                                                                                            |
| (c) |   | See "Commodity Price Risk (Non-trading) - Economic Activity" in Note 14 to the Financial Statements for additional information.  In addition, the three and six months ended June 30, 2010 include a pre-tax gain of $11 million and $25 million related to the amortization of option premiums.                                                                                      |
| (d) |   | Included in "Utility" on the Statements of Income.                                                                                                                                                                                                                                                                                                                                              |
| (e) |   | Included in "Other operation and maintenance" on the Statements of Income.                                                                                                                                                                                                                                                                                                                      |
| (f) |   | The six months ended June 30, 2010 and the three and six months ended June 30, 2009 include revenues associated with the Long Island generation business.  The three and six months ended June 30, 2009 include revenues associated with the majority of PPL Maine's hydroelectric generation business.  See Note 8 to the Financial Statements for additional information. |
| (g) |   | Included in "Energy purchases" on the Statements of Income.                                                                                                                                                                                                                                                                                                                                     |

|                          |   | Three Months Ended June 30, |
|-------------------------------|--------|----------------------------------|
|                          |   | 2010                             |   | 2009 |   | Change |
| Non-trading:                  |   |                             |   |   |   |   |   |   |   |   |   |   |
| Eastern U.S.                  |   | $                                | 526 |   |   | $ | 301 |   |   | $ | 225 |   |
| Western U.S.                  |   |                             | 88 |   |   |   | 77 |   |   |   | 11 |   |
| Net energy trading            |   |                             | 7 |   |   |   | 11 |   |   |   | (4 | ) |
| Domestic gross energy margins |   | $                                | 621 |   |   | $ | 389 |   |   | $ | 232 |   |

|                          |   | Six Months Ended June 30, |
|-------------------------------|--------|--------------------------------|
|                          |   | 2010                           |   | 2009 |   | Change |
| Non-trading:                  |   |                           |   |   |   |   |   |   |   |   |   |   |
| Eastern U.S.                  |   | $                              | 1,175 |   |   | $ | 624 |   |   | $ | 551 |   |
| Western U.S.                  |   |                           | 171 |   |   |   | 161 |   |   |   | 10 |   |
| Net energy trading            |   |                           | 18 |   |   |   | (1 | ) |   |   | 19 |   |
| Domestic gross energy margins |   | $                              | 1,364 |   |   | $ | 784 |   |   | $ | 580 |   |

|                                    |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-----------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                    |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                    |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income (a)                    |   | $                                | 238    |                           |   | $ | 104 |   |   | $ | 730 |   |   | $ | 516 |   |
| Adjustments:                            |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Unregulated retail electric and gas (a) |   |                             | (101   | )                              |   |   | (32 | ) |   |   | (205 | ) |   |   | (74 | ) |
| Wholesale energy marketing (a)          |   |                             | (595   | )                              |   |   | (646 | ) |   |   | (2,405 | ) |   |   | (1,796 | ) |
| Net energy trading margins (a)          |   |                             | (5     | )                              |   |   | (7 | ) |   |   | (16 | ) |   |   | 5 |   |
| Energy-related businesses, net (b)      |   |                             | (10    | )                              |   |   | (7 | ) |   |   | (16 | ) |   |   | (15 | ) |
| Fuel (a)                                |   |                             | 263    |                           |   |   | 186 |   |   |   | 496 |   |   |   | 444 |   |
| Energy purchases (a)                    |   |                             | 295    |                           |   |   | 678 |   |   |   | 1,870 |   |   |   | 1,624 |   |
| Other operation and maintenance (a)     |   |                             | 423    |                           |   |   | 354 |   |   |   | 868 |   |   |   | 726 |   |
| Depreciation (a)                        |   |                             | 130    |                           |   |   | 114 |   |   |   | 258 |   |   |   | 223 |   |
| Taxes, other than income (a)       |   |                             | 54     |                           |   |   | 67 |   |   |   | 126 |   |   |   | 139 |   |
| Revenue adjustments (c)                 |   |                             | (236   | )                              |   |   | (566 | ) |   |   | (554 | ) |   |   | (1,239 | ) |
| Expense adjustments (c)                 |   |                             | (257   | )                              |   |   | (60 | ) |   |   | (732 | ) |   |   | (131 | ) |
| Domestic gross delivery margins         |   | $                                | 199    |                           |   | $ | 185 |   |   | $ | 420 |   |   | $ | 422 |   |

| (a) |   | As reported on the Statements of Income.                                                                              |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------|
| (b) |   | Amount represents the net of "Energy-related businesses" revenue and expense as reported on the Statements of Income. |
| (c) |   | The components of these adjustments are detailed in the tables below.                                                 |

|                                                                   |   | Three Months Ended June 30, |
|------------------------------------------------------------------------|--------|----------------------------------|
|                                                                   |   | 2010                             |   | 2009 |   | Change |
| Revenue                                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| Utility (a)                                                            |   | $                                | 692 |   |   | $ | 881 |   |   | $ | (189 | ) |
| Revenue adjustments (b)                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| WPD utility revenue (c)                                                |   |                             | (172 | ) |   |   | (155 | ) |   |   | (17 | ) |
| PLR revenue from energy supplied to PPL Electric by PPL EnergyPlus (c) |   |                             | (64 | ) |   |   | (411 | ) |   |   | 347 |   |
| Total revenue adjustments                                              |   |                             | (236 | ) |   |   | (566 | ) |   |   | 330 |   |
|                                                                   |   |                             | 456 |   |   |   | 315 |   |   |   | 141 |   |
| Expense                                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| Amortization of recoverable transition costs (a)                       |   |                             |   |   |   |   | 70 |   |   |   | (70 | ) |
| Expense adjustments (b)                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| External PLR energy purchases (d)                                 |   |                             | 209 |   |   |   | 11 |   |   |   | 198 |   |
| Gross receipts tax (e)                                                 |   |                             | 27 |   |   |   | 44 |   |   |   | (17 | ) |
| Act 129 (f)                                                            |   |                             | 19 |   |   |   |   |   |   |   | 19 |   |
| Other                                                                  |   |                             | 2 |   |   |   | 5 |   |   |   | (3 | ) |
| Total expense adjustments                                              |   |                             | 257 |   |   |   | 60 |   |   |   | 197 |   |
|                                                                   |   |                             | 257 |   |   |   | 130 |   |   |   | 127 |   |
| Domestic gross delivery margins                                        |   | $                                | 199 |   |   | $ | 185 |   |   | $ | 14 |   |

|                                                                   |   | Six Months Ended June 30, |
|------------------------------------------------------------------------|--------|--------------------------------|
|                                                                   |   | 2010                           |   | 2009 |   | Change |
| Revenue                                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| Utility (a)                                                            |   | $                              | 1,706 |   |   | $ | 1,946 |   |   | $ | (240 | ) |
| Revenue adjustments (b)                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| WPD utility revenue (c)                                                |   |                           | (375 | ) |   |   | (331 | ) |   |   | (44 | ) |
| PLR revenue from energy supplied to PPL Electric by PPL EnergyPlus (c) |   |                           | (179 | ) |   |   | (908 | ) |   |   | 729 |   |
| Total revenue adjustments                                              |   |                           | (554 | ) |   |   | (1,239 | ) |   |   | 685 |   |
|                                                                   |   |                           | 1,152 |   |   |   | 707 |   |   |   | 445 |   |
| Expense                                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| Amortization of recoverable transition costs (a)                       |   |                           |   |   |   |   | 154 |   |   |   | (154 | ) |
| Expense adjustments (b)                                                |   |                           |   |   |   |   |   |   |   |   |   |   |
| External PLR energy purchases (d)                                 |   |                           | 618 |   |   |   | 23 |   |   |   | 595 |   |
| Gross receipts tax (e)                                                 |   |                           | 72 |   |   |   | 95 |   |   |   | (23 | ) |
| Act 129 (f)                                                            |   |                           | 37 |   |   |   |   |   |   |   | 37 |   |
| Other                                                                  |   |                           | 5 |   |   |   | 13 |   |   |   | (8 | ) |
| Total expense adjustments                                              |   |                           | 732 |   |   |   | 131 |   |   |   | 601 |   |
|                                                                   |   |                           | 732 |   |   |   | 285 |   |   |   | 447 |   |
| Domestic gross delivery margins                                        |   | $                              | 420 |   |   | $ | 422 |   |   | $ | (2 | ) |

| (a) |   | As reported on the Statements of Income.                                                                                                                 |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | To include/exclude the impact of any revenues and expenses consistent with the way management reviews domestic gross delivery margins.                   |
| (c) |   | Included in "Utility" on the Statements of Income.                                                                                                       |
| (d) |   | Included in "Energy purchases" on the Statements of Income.  Excludes NUG purchases, the sales of which are not included in "Utility" revenue. |
| (e) |   | Included in "Taxes, other than income" on the Statements of Income.                                                                                      |
| (f) |   | Included in "Other operation and maintenance" on the Statement of Income.                                                                                |

|                            |   | Three Months Ended June 30, |
|---------------------------------|--------|----------------------------------|
|                            |   | 2010                             |   | 2009 |   | Change |
|                            |   |                             |   |   |   |   |   |   |   |   |   |   |
| Distribution                    |   | $                                | 157 |   |   | $ | 157 |   |   |   |   |   |
| Transmission                    |   |                             | 42 |   |   |   | 28 |   |   | $ | 14 |   |
| Domestic gross delivery margins |   | $                                | 199 |   |   | $ | 185 |   |   | $ | 14 |   |

|                            |   | Six Months Ended June 30, |
|---------------------------------|--------|--------------------------------|
|                            |   | 2010                           |   | 2009 |   | Change |
|                            |   |                           |   |   |   |   |   |   |   |   |   |   |
| Distribution                    |   | $                              | 336 |   |   | $ | 355 |   |   | $ | (19 | ) |
| Transmission                    |   |                           | 84 |   |   |   | 67 |   |   |   | 17 |   |
| Domestic gross delivery margins |   | $                              | 420 |   |   | $ | 422 |   |   | $ | (2 | ) |

|                            |   | June 30, 2010 vs. June 30, 2009 |
|---------------------------------|--------|-------------------------------------------|
|                            |   | Three Months Ended                        |   | Six Months Ended |
| Domestic:                       |   |                                      |   |   |   |   |   |   |
| Retail electric revenue (a)     |   | $                                         | (206 | ) |   | $ | (284 | ) |
| U.K.:                           |   |                                      |   |   |   |   |   |   |
| Electric delivery revenue (b)   |   |                                      | 14 |   |   |   | 23 |   |
| Foreign currency exchange rates |   |                                      | 3 |   |   |   | 21 |   |
|                            |   | $                                         | (189 | ) |   | $ | (240 | ) |

| (a) |   | See "Domestic Gross Delivery Margins" above.                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Higher U.K. electric delivery revenue for the three months ended June 30, 2010, compared with the same period in 2009, was mainly due to an increase in prices effective April 1, 2010 and 2009. Higher U.K. electric delivery revenue for the six months ended June 30, 2010, compared with the same period in 2009, was mainly due to an increase in prices effective April 1, 2010 and 2009, partially offset by a revised estimate of network electricity losses. |

|                                                   |   | June 30, 2010 vs. June 30, 2009 |
|--------------------------------------------------------|--------|-------------------------------------------|
|                                                   |   | Three Months Ended                        |   | Six Months Ended |
|                                                   |   |                                      |   |   |   |   |
| Montana hydroelectric litigation (Note 10)        |   | $                                         | 2 |   |   | $ | 51 |   |
| Amortization of Act 129 costs (a)                      |   |                                      | 19 |   |   |   | 37 |   |
| Costs at fossil/hydroelectric plants (b)               |   |                                      | 25 |   |   |   | 24 |   |
| Defined benefit costs                                  |   |                                      | 9 |   |   |   | 19 |   |
| Vegetation management costs                            |   |                                      | 8 |   |   |   | 10 |   |
| Other costs at Susquehanna nuclear plant               |   |                                      | 5 |   |   |   | 8 |   |
| Payroll-related costs - PPL Electric                   |   |                                      | 5 |   |   |   | 7 |   |
| Outage costs at Susquehanna nuclear plant (c)     |   |                                      | (25 | ) |   |   | 6 |   |
| Workforce reduction (Note 9)                           |   |                                      |   |   |   |   | (22 | ) |
| Impairment and other charges - emission allowances (d) |   |                                      | 8 |   |   |   | (14 | ) |
| Other - Domestic                                       |   |                                      | 11 |   |   |   | 10 |   |
| Other - U.K.                                           |   |                                      | 2 |   |   |   | 6 |   |
|                                                   |   | $                                         | 69 |   |   | $ | 142 |   |

| (a) |   | Relates to costs associated with a PUC-approved energy efficiency and conservation plan.  These costs are recovered in customer rates and substantially match the revenue recorded, therefore have minimal impact on earnings.  See "Regulatory Issues - Pennsylvania Activities" in Note 10 to the Financial Statements for additional information on this plan.  These costs are included in "Domestic Gross Delivery Margins" above.                                                   |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Relates primarily to increased outage costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (c) |   | Relates primarily to the timing of outage costs at the Susquehanna nuclear plant. In 2010, the refueling and inspection outage commenced in early March and in 2009 it commenced in April.                                                                                                                                                                                                                                                                                                                         |
| (d) |   | Relates to an $8 million higher impairment of sulfur dioxide emission allowances for the three-month period and a $19 million lower impairment of sulfur dioxide emission allowances for the six-month period.  See Note 13 to the Financial Statements for additional information.  Partially offsetting this decrease for the six-month period was a $5 million increase in the charge for the settlement of a dispute regarding the sale of certain annual nitrogen oxide allowance put options. |

|                                 |   | June 30, 2010 vs. June 30, 2009 |
|--------------------------------------|--------|-------------------------------------------|
|                                 |   | Three Months Ended                        |   | Six Months Ended |
|                                 |   |                                      |   |   |   |   |
| Additions to PP&E (a)            |   | $                                         | 16 |   |   | $ | 32 |   |
| U.K. foreign currency exchange rates |   |                                      |   |   |   |   | 3 |   |
|                                 |   | $                                         | 16 |   |   | $ | 35 |   |

| (a) |   | 2009 additions included the completion of the Brunner Island environmental projects, which impacted depreciation expense primarily beginning in the second half of 2009. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | June 30, 2010 vs. June 30, 2009 |
|-------------------------------------|--------|-------------------------------------------|
|                                |   | Three Months Ended                        |   | Six Months Ended |
|                                |   |                                      |   |   |   |   |
| Pennsylvania gross receipts tax (a) |   | $                                         | (13 | ) |   | $ | (16 | ) |
| Other                               |   |                                      |   |   |   |   | 3 |   |
|                                |   | $                                         | (13 | ) |   | $ | (13 | ) |

| (a) |   | Primarily due to a decrease in electricity revenues as customers choose alternative suppliers in 2010 due to the expiration of generation rate caps.  This tax is passed through to customers, therefore it has minimal impact on earnings.  This tax is included in "Domestic Gross Energy Margins" and "Domestic Gross Delivery Margins" above. |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                              |   | June 30, 2010 vs. June 30, 2009 |
|-------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|
|                                                                                                              |   | Three Months Ended                        |   | Six Months Ended |
|                                                                                                              |   |                                      |   |   |   |   |
| Amortization of deferred Bridge Facility financing costs related to the pending acquisition of E.ON U.S. (Note 7) |   | $                                         | 22 |   |   | $ | 22 |   |
| Inflation adjustment on U.K. Index-linked Senior Unsecured Notes                                                  |   |                                      | 7 |   |   |   | 21 |   |
| Capitalized interest (a)                                                                                          |   |                                      | 3 |   |   |   | 14 |   |
| Montana hydroelectric litigation (Note 10)                                                                        |   |                                      | 1 |   |   |   | 8 |   |
| Short-term debt interest expense                                                                                  |   |                                      | 5 |   |   |   | 4 |   |
| U.K. foreign currency exchange rates                                                                              |   |                                      | 1 |   |   |   | 3 |   |
| Long-term debt interest expense                                                                                   |   |                                      | (5 | ) |   |   | (18 | ) |
| Other                                                                                                             |   |                                      | (1 | ) |   |   | 4 |   |
|                                                                                                              |   | $                                         | 33 |   |   | $ | 58 |   |

| (a) |   | During the six months ended June 30, 2009, $8 million was capitalized related to the Brunner Island environmental projects.  These projects were completed in 2009. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                           |   | June 30, 2010 vs. June 30, 2009 |
|----------------------------------------------------------------|--------|-------------------------------------------|
|                                                           |   | Three Months Ended                        |   | Six Months Ended |
|                                                           |   |                                      |   |   |   |   |
| Higher pre-tax book income                                     |   | $                                         | 43 |   |   | $ | 72 |   |
| Foreign tax reserve adjustments (a)                            |   |                                      | 37 |   |   |   | 51 |   |
| Health Care Reform (b)                                         |   |                                      |   |   |   |   | 8 |   |
| U.K. capital loss benefit (a)                                  |   |                                      | (25 | ) |   |   | (25 | ) |
| Federal and state tax reserve adjustments (c)             |   |                                      | 2 |   |   |   | (14 | ) |
| Valuation allowance adjustments                                |   |                                      |   |   |   |   | (8 | ) |
| Domestic manufacturing deduction (d)                           |   |                                      | (6 | ) |   |   | (5 | ) |
| U.S. income tax on foreign earnings, net of foreign tax credit |   |                                      | (7 | ) |   |   | (4 | ) |
| Other                                                          |   |                                      | (1 | ) |   |   | 1 |   |
|                                                           |   | $                                         | 43 |   |   | $ | 76 |   |

| (a) |   | During the three months ended June 30, 2010, PPL recorded a $25 million foreign tax benefit and a related $22 million foreign tax reserve related to losses generated by restructuring.  During the three months ended June 30, 2009, PPL recorded $15 million of tax benefits related to the settlement of a U.K. tax dispute. During the six months ended June 30, 2010, PPL recorded a $25 million foreign tax benefit and a related $22 million foreign tax reserve related to losses generated by restructuring.  During the six months ended June 30, 2009, PPL recorded $29 million of tax benefits related to settlements of U.K. tax disputes. |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Beginning in 2013, provisions within Health Care Reform eliminated the tax deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D Coverage.  As a result, during the six months ended June 30, 2010, PPL recorded deferred income tax expense.                                                                                                                                                                                                                                                                                          |
| (c) |   | During the six months ended June 30, 2010, PPL recorded $7 million of tax benefits related to claims associated with foreign earnings and the settlement of a state tax dispute.  During the six months ended June 30, 2009, PPL recorded $7 million in tax expense related to a change in tax reserves related to the settlement of federal tax disputes.                                                                                                                                                                                                                                                                                                             |
| (d) |   | During the three and six months ended June 30, 2010, PPL recorded an increase in tax benefits related to domestic manufacturing deductions due to an increase in domestic taxable income resulting from the expiration of generation rate caps in 2010.                                                                                                                                                                                                                                                                                                                                                                                                                          |

|                      |   | June 30, 2010 |   | December 31, 2009 |
|---------------------------|--------|--------------------|--------|-------------------|
|                      |   |               |   |              |   |   |   |   |
| Cash and cash equivalents |   | $                  | 4,505  |              |   | $ | 801 |   |
| Short-term debt           |   |               | 466    |              |   |   | 639 |   |

| · | net proceeds of $2.4 billion from the issuance of common stock;                                                   |
|--------|-------------------------------------------------------------------------------------------------------------------|
| · | proceeds of $1.7 billion from the issuance of long-term debt and Equity Units;                                    |
| · | $572 million of cash provided by operating activities;                                                            |
| · | proceeds of $124 million from the sale of the Long Island generation business;                                    |
| · | $624 million of capital expenditures;                                                                             |
| · | the payment of $263 million of common stock dividends; and                                                        |
| · | a net decrease in short-term debt of $158 million (excluding the impact of U.K. foreign currency exchange rates). |

|                                             |   | Committed Capacity |   | Borrowed |   | Letters of Credit Issued  |   | Unused Capacity |
|--------------------------------------------------|--------|--------------------|--------|----------|--------|--------------------------------|--------|-----------------|
|                                             |   |               |   |     |   |                           |   |            |   |   |   |   |
| PPL Energy Supply Domestic Credit Facilities (a) |   | $                  | 4,125  |     |   | $                              | 285    |            |   | $ | 529 |   |   | $ | 3,311 |   |
| PPL Electric Credit Facilities (b)               |   |               | 340    |     |   |                           |   |            |   |   | 13 |   |   |   | 327 |   |
| Total Domestic Credit Facilities (c)             |   | $                  | 4,465  |     |   | $                              | 285    |            |   | $ | 542 |   |   | $ | 3,638 |   |
|                                             |   |               |   |     |   |                           |   |            |   |   |   |   |   |   |   |   |
| WPDH Limited Credit Facility                     |   | ₤            | 150    |     |   | ₤                        | 123    |            |   |   | n/a |   |   | ₤ | 27 |   |
| WPD (South West) Credit Facility                 |   |               | 210    |     |   |                           |   |            |   |   | n/a |   |   |   | 210 |   |
| Total WPD Credit Facilities (d)                  |   | ₤            | 360    |     |   | ₤                        | 123    |            |   |   | n/a |   |   | ₤ | 237 |   |

| (a) |   | In March 2010, PPL Energy Supply's 364-day $200 million bilateral credit facility was amended.  The amendment included extending the expiration date to March 2013, thereby making it a three-year facility, and setting related fees based on the company's public debt rating. In June 2010, PPL Energy Supply closed into escrow a new $4 billion syndicated credit facility, expiring December 31, 2014, that is intended to replace its existing 364-day $400 million and 5-year $3.2 billion syndicated credit facilities upon effectiveness.  Subject to certain conditions, the new credit facility will become effective on the earliest of (i) December 31, 2010, (ii) the date on which the acquisition of E.ON U.S. is completed by PPL, or (iii) the date on which the purchase and sale agreement relating to the acquisition of E.ON U.S. has been terminated or expired or such acquisition has otherwise been abandoned by PPL. The borrowing outstanding at June 30, 2010 was repaid by PPL Energy Supply in July 2010.                                          |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Committed capacity includes a $150 million credit facility related to an asset-backed commercial paper program.  At June 30, 2010, based on accounts receivable and unbilled revenue pledged, $150 million was available for borrowing under the asset-backed credit facility.  In July 2010, PPL Electric and a subsidiary extended the expiration date of the credit agreement related to the asset-backed commercial paper program to July 2011. In June 2010, PPL Electric closed into escrow a new $200 million syndicated credit facility, expiring December 31, 2014, that is intended to replace its existing 5-year syndicated credit facility upon effectiveness.  Subject to certain conditions, the new credit facility will become effective on the earliest of (i) December 31, 2010, (ii) the date on which the acquisition of E.ON U.S. is completed by PPL, or (iii) the date on which the purchase and sale agreement relating to the acquisition of E.ON U.S. has been terminated or expired or such acquisition has otherwise been abandoned by PPL. |
| (c) |   | The commitments under PPL's existing domestic credit facilities are provided by a diverse bank group, with no one bank and its affiliates providing an aggregate commitment of more than 15% of the total committed capacity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (d) |   | The commitments under WPD's credit facilities are provided by eight banks, with no one bank providing more than 25% of the total committed capacity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

| · | Revised the outlook for PPL, PPL Capital Funding and PPL Electric;                                             |
|--------|----------------------------------------------------------------------------------------------------------------|
| · | Lowered the issuer rating of PPL and the senior unsecured debt rating of PPL Capital Funding;                  |
| · | Lowered the rating of PPL Capital Funding's junior subordinated notes and PPL Electric's preferred securities; |
| · | Lowered the issuer rating of PPL Electric;                                                                     |
| · | Affirmed the senior secured rating and commercial paper rating of PPL Electric; and                            |
| · | Affirmed the senior unsecured notes rating and the outlook of PPL Energy Supply.                               |

| · | Revised the outlook of PPL,  PPL Energy Supply and PPL Capital Funding;                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Revised the outlook of WPDH Limited, WPD (South Wales) and WPD (South West); and                                                                 |
| · | Affirmed its credit ratings for PPL, PPL Capital Funding, PPL Energy Supply, PPL Electric, WPDH Limited, WPD (South Wales) and WPD (South West). |

|                                     |   | Projected |   |
|------------------------------------------|--------|-----------|--------|
|                                     |   | 2010      |   | 2011 |   | 2012 |   |
| Construction expenditures (a) (b)        |   |      |   |   |   |   |   |   |   |   |
| Generating facilities                    |   | $         | 671    |   | $ | 673 |   | $ | 507 |   |
| Transmission and distribution facilities |   |      | 675    |   |   | 853 |   |   | 913 |   |
| Environmental                            |   |      | 63     |   |   | 19 |   |   | 99 |   |
| Other                                    |   |      | 115    |   |   | 108 |   |   | 106 |   |
| Total Construction Expenditures          |   |      | 1,524  |   |   | 1,653 |   |   | 1,625 |   |
| Nuclear fuel                             |   |      | 151    |   |   | 173 |   |   | 171 |   |
| Total Capital Expenditures               |   | $         | 1,675  |   | $ | 1,826 |   | $ | 1,796 |   |

| (a) |   | Construction expenditures include capitalized interest and AFUDC, which are expected to be approximately $190 million for the years 2010 through 2012. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Includes expenditures for certain intangible assets.                                                                                                   |

|                                                                      |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|---------------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                                      |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                                      |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of contracts outstanding at the beginning of the period        |   | $                                | 1,726  |                           |   | $ | 728 |   |   | $ | 1,280 |   |   | $ | 402 |   |
| Contracts realized or otherwise settled during the period                 |   |                             | (68    | )                              |   |   | 102 |   |   |   | (182 | ) |   |   | 201 |   |
| Fair value of new contracts entered into during the period                |   |                             | (11    | )                              |   |   | 133 |   |   |   | 7 |   |   |   | 55 |   |
| Changes in fair value attributable to changes in valuation techniques (a) |   |                             | (23    | )                              |   |   |   |   |   |   | (23 | ) |   |   |   |   |
| Other changes in fair value                                               |   |                             | (321   | )                              |   |   | 102 |   |   |   | 221 |   |   |   | 407 |   |
| Fair value of contracts outstanding at the end of the period              |   | $                                | 1,303  |                           |   | $ | 1,065 |   |   | $ | 1,303 |   |   | $ | 1,065 |   |

| (a) |   | In June 2010, PPL received market bids for certain full-requirement sales contracts that were monetized in early July.  See Note 14 to the Financial Statements for additional information.  At June 30, 2010, these contracts were valued based on the bids received (the market approach).  In prior periods, the fair value of these contracts was measured using the income approach. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   | Net Asset (Liability)          |
|--------------------------------------------------------------|--------|--------------------------------|
|                                                         |   | Maturity Less Than 1 Year |   | Maturity 1-3 Years |   | Maturity 4-5 Years |   | Maturity in Excess of 5 Years |   | Total Fair Value |
| Source of Fair Value                                         |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices based on significant other observable inputs          |   | $                              | 442 |   |   | $ | 764 |   |   | $ | 46 |   |   |   |   |   |   | $ | 1,252 |   |
| Prices based on significant unobservable inputs              |   |                           | 3 |   |   |   | (4 | ) |   |   | 2 |   |   | $ | 50 |   |   |   | 51 |   |
| Fair value of contracts outstanding at the end of the period |   | $                              | 445 |   |   | $ | 760 |   |   | $ | 48 |   |   | $ | 50 |   |   | $ | 1,303 |   |

|                                                               |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|--------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                               |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                               |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of contracts outstanding at the beginning of the period |   | $                                | 2      |                           |   | $ | (37 | ) |   | $ | (6 | ) |   | $ | (75 | ) |
| Contracts realized or otherwise settled during the period          |   |                             | 11     |                           |   |   |   |   |   |   | 10 |   |   |   | 33 |   |
| Fair value of new contracts entered into during the period         |   |                             | 2      |                           |   |   | 9 |   |   |   | 2 |   |   |   | 35 |   |
| Other changes in fair value                                        |   |                             | (11    | )                              |   |   | 15 |   |   |   | (2 | ) |   |   | (6 | ) |
| Fair value of contracts outstanding at the end of the period       |   | $                                | 4      |                           |   | $ | (13 | ) |   | $ | 4 |   |   | $ | (13 | ) |

|                                                         |   | Net Asset (Liability)          |
|--------------------------------------------------------------|--------|--------------------------------|
|                                                         |   | Maturity Less Than 1 Year |   | Maturity 1-3 Years |   | Maturity 4-5 Years |   | Maturity in Excess of 5 Years |   | Total Fair Value |
| Source of Fair Value                                         |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices quoted in active markets for identical instruments    |   | $                              | 2 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 2 |   |
| Prices based on significant other observable inputs          |   |                           | (2 | ) |   | $ | 1 |   |   | $ | 5 |   |   | $ | 1 |   |   |   | 5 |   |
| Prices based on significant unobservable inputs              |   |                           | (3 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3 | ) |
| Fair value of contracts outstanding at the end of the period |   | $                              | (3 | ) |   | $ | 1 |   |   | $ | 5 |   |   | $ | 1 |   |   | $ | 4 |   |

|                                          |   | Trading VaR   |   | Non-Trading VaR |
|-----------------------------------------------|--------|---------------|--------|-----------------|
|                                          |   | June 30, |   | Dec. 31,        |   | June 30, |   | Dec. 31, |
|                                          |   | 2010          |   | 2009            |   | 2010 |   | 2009 |
|                                          |   |          |   |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 95% Confidence Level, Five-Day Holding Period |   |          |   |            |   |   |   |   |   |   |   |   |   |   |   |   |
| Period End                                    |   | $             | 4      |            |   | $ | 3 |   |   | $ | 9 |   |   | $ | 8 |   |
| Average for the Period                        |   |          | 4      |            |   |   | 4 |   |   |   | 10 |   |   |   | 9 |   |
| High                                          |   |          | 5      |            |   |   | 8 |   |   |   | 11 |   |   |   | 11 |   |
| Low                                           |   |          | 3      |            |   |   | 1 |   |   |   | 9 |   |   |   | 8 |   |

|        |   | 2010   |   | 2011   |   |
|-------------|--------|--------|--------|--------|--------|
|        |   |   |   |   |   |   |   |   |   |
| Non-trading |   | $      | (1     | )      |   | $ | (2 | ) |   |

|                     |   | Exposure Hedged |   | Fair Value, Net - Asset (Liability) (a) |   | Effect of a 10% Adverse Movement in Rates (b) |
|--------------------------|--------|-----------------|--------|-----------------------------------------|--------|-----------------------------------------------|
|                     |   |            |   |                                    |   |                                          |   |   |   |   |   |   |
| Cash flow hedges         |   |            |   |                                    |   |                                          |   |   |   |   |   |   |
| Interest rate swaps (c)  |   | $               | 1,600  |                                    |   | $                                             | (79 | ) |   | $ | (53 | ) |
| Cross-currency swaps (d) |   |            | 302    |                                    |   |                                          | 52 |   |   |   | (39 | ) |
| Fair value hedges        |   |            |   |                                    |   |                                          |   |   |   |   |   |   |
| Interest rate swaps (e)  |   |            | 749    |                                    |   |                                          | 49 |   |   |   | (5 | ) |

| (a) |   | Includes accrued interest, if applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Effects of adverse movements decrease assets or increase liabilities, as applicable, which could result in an asset becoming a liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (c) |   | PPL utilizes various risk management instruments to reduce its exposure to the expected future cash flow variability of its debt instruments.  These risks include exposure to adverse interest rate movements for outstanding variable rate debt and for future anticipated financing.  While PPL is exposed to changes in the fair value of these instruments, any changes in the fair value of these instruments are recorded in equity and then reclassified into earnings in the same period during which the item being hedged affects earnings.  Sensitivities represent a 10% adverse movement in interest rates. |
| (d) |   | WPDH Limited uses cross-currency swaps to hedge the interest payments and principal of its U.S. dollar-denominated senior notes with maturity dates ranging from December 2017 to December 2028.  While PPL is exposed to changes in the fair value of these instruments, any change in the fair value of these instruments is recorded in equity and reclassified into earnings in the same period during which the item being hedged affects earnings.  Sensitivities represent a 10% adverse movement in both interest rates and foreign currency exchange rates.                                                                |
| (e) |   | PPL utilizes various risk management instruments to adjust the mix of fixed and floating interest rates in its debt portfolio.  The change in fair value of these instruments, as well as the offsetting change in the value of the hedged exposure of the debt, is reflected in earnings.  Sensitivities represent a 10% adverse movement in interest rates.                                                                                                                                                                                                                                                                       |

|                      |   | Exposure Hedged |   | Fair Value, Net - Asset |   | Effect of a 10% Adverse Movement in Foreign Currency Exchange Rates (a) |
|---------------------------|--------|-----------------|--------|-------------------------|--------|-------------------------------------------------------------------------|
|                      |   |            |   |                    |   |                                                                    |   |   |   |   |   |   |
| Net investment hedges (b) |   | £          | 15     |                    |   | $                                                                       | 7 |   |   | $ | (2 | ) |
| Economic hedges (c)       |   |            | 56     |                    |   |                                                                    | 1 |   |   |   | (2 | ) |

| (a) |   | Effects of adverse movements decrease assets or increase liabilities, as applicable, which could result in an asset becoming a liability.                                                                                                                                                                                                        |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | To protect the value of a portion of its net investment in WPD, PPL executed forward contracts to sell British pounds sterling.  The settlement dates of these contracts range from March 2011 through June 2011.                                                                                                                      |
| (c) |   | To economically hedge the translation of 2010 expected income denominated in British pounds sterling to U.S. dollars, PPL entered into a combination of average rate forwards and average rate options to sell British pounds sterling.  The forwards and options have termination dates ranging from July 2010 through December 2010. |

----

|   |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|--------|--------|----------------------------------|--------|--------------------------------|
|   |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|   |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   | $                                | 86     |                           |   | $ | (31 | ) |   | $ | 286 |   |   | $ | 160 |   |

|                   |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|------------------------|--------|----------------------------------|--------|--------------------------------|
|                   |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                   |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Supply                 |   | $                                | 28     |                           |   | $ | (93 | ) |   | $ | 152 |   |   | $ | 11 |   |
| International Delivery |   |                             | 58     |                           |   |   | 62 |   |   |   | 134 |   |   |   | 149 |   |
| Total                  |   | $                                | 86     |                           |   | $ | (31 | ) |   | $ | 286 |   |   | $ | 160 |   |

|                                                |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-----------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Energy revenues (a)                                 |   | $                                | 765    |                           |   | $ | 1,096 |   |   | $ | 2,805 |   |   | $ | 2,773 |   |
| Energy-related businesses                           |   |                             | 100    |                           |   |   | 95 |   |   |   | 181 |   |   |   | 184 |   |
| Total operating revenues                            |   |                             | 865    |                           |   |   | 1,191 |   |   |   | 2,986 |   |   |   | 2,957 |   |
| Fuel and energy purchases (a)                  |   |                             | 351    |                           |   |   | 852 |   |   |   | 1,751 |   |   |   | 2,044 |   |
| Other operation and maintenance                     |   |                             | 261    |                           |   |   | 239 |   |   |   | 559 |   |   |   | 485 |   |
| Depreciation                                        |   |                             | 63     |                           |   |   | 53 |   |   |   | 125 |   |   |   | 100 |   |
| Taxes, other than income                            |   |                             | 11     |                           |   |   | 8 |   |   |   | 22 |   |   |   | 15 |   |
| Energy-related businesses                           |   |                             | 93     |                           |   |   | 93 |   |   |   | 174 |   |   |   | 179 |   |
| Total operating expenses                            |   |                             | 779    |                           |   |   | 1,245 |   |   |   | 2,631 |   |   |   | 2,823 |   |
| Other Income (Expense) - net (b)          |   |                             | 8      |                           |   |   | 8 |   |   |   | 14 |   |   |   | 36 |   |
| Other-Than-Temporary Impairments                    |   |                             | 3      |                           |   |   | 1 |   |   |   | 3 |   |   |   | 18 |   |
| Interest Expense                                    |   |                             | 51     |                           |   |   | 50 |   |   |   | 106 |   |   |   | 92 |   |
| Income Taxes                                        |   |                             | 12     |                           |   |   | (36 | ) |   |   | 108 |   |   |   | 20 |   |
| Loss from Discontinued Operations                   |   |                             |   |                           |   |   | (32 | ) |   |   |   |   |   |   | (29 | ) |
| Net Income (Loss) Attributable to PPL Energy Supply |   | $                                | 28     |                           |   | $ | (93 | ) |   | $ | 152 |   |   | $ | 11 |   |

| (a) |   | Includes impact from energy-related economic activity.  See "Commodity Price Risk (Non-trading) - Economic Activity" in Note 14 to the Financial Statements for additional information. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Includes interest income from affiliates.                                                                                                                                                         |

|                                                  |   | June 30, 2010 vs. June 30, 2009 |
|-------------------------------------------------------|--------|-------------------------------------------|
|                                                  |   | Three Months Ended                        |   | Six Months Ended |
|                                                  |   |                                      |   |   |   |   |   |   |
| Eastern U.S. non-trading margins                      |   | $                                         | 132 |   |   | $ | 322 |   |
| Western U.S. non-trading margins                      |   |                                      | 6 |   |   |   | 6 |   |
| Net energy trading margins                            |   |                                      | (2 | ) |   |   | 11 |   |
| Other operation and maintenance                       |   |                                      | (6 | ) |   |   | (29 | ) |
| Depreciation                                          |   |                                      | (6 | ) |   |   | (15 | ) |
| Other income (expense) - net                          |   |                                      | 2 |   |   |   | (6 | ) |
| Interest expense                                      |   |                                      |   |   |   |   | (4 | ) |
| Discontinued operations, net of special item (Note 8) |   |                                      | 5 |   |   |   | 6 |   |
| Other                                                 |   |                                      | 4 |   |   |   | (8 | ) |
| Special items                                         |   |                                      | (14 | ) |   |   | (142 | ) |
|                                                  |   | $                                         | 121 |   |   | $ | 141 |   |

| · | See "Domestic Gross Energy Margins" for an explanation of non-trading margins and net energy trading margins.                                                                                                                                       |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                |
| · | Other operation and maintenance increased for both periods primarily due to higher payroll costs.  The six-month period also increased due to higher outage costs at eastern generation plants and higher uncollectible accounts expense. |
|   |                                                                                                                                                                                                                                                |
| · | Depreciation increased for both periods primarily due to the completion of the Brunner Island environmental projects, which impacted depreciation expense primarily beginning in the second half of 2009.                                           |
|   |                                                                                                                                                                                                                                                |
| · | Other income (expense) - net decreased for the six month period primarily due to gains related to the extinguishment of notes in 2009, partially offset by higher earnings on securities in PPL Susquehanna's NDT funds in 2010.                    |

|                                                         |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|--------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                         |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                         |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted energy-related economic activity, net (a)      |   | $                                | (54    | )                              |   | $ | (88 | ) |   | $ | (119 | ) |   | $ | (38 | ) |
| Sales of assets:                                             |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Long Island generation business (Note 8)                     |   |                             |   |                           |   |   | (34 | ) |   |   |   |   |   |   | (34 | ) |
| Sundance indemnification                                     |   |                             | 1      |                           |   |   |   |   |   |   | 1 |   |   |   |   |   |
| Impairments:                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustments - NDT investments (b)                            |   |                             |   |                           |   |   | 2 |   |   |   |   |   |   |   | (1 | ) |
| Impacts from emission allowances (c)                         |   |                             | (5     | )                              |   |   |   |   |   |   | (7 | ) |   |   | (15 | ) |
| Other asset impairments                                      |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (2 | ) |
| Pending E.ON U.S. acquisition-related costs:                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Monetization of certain full-requirement sales contracts (a) |   |                             | (75    | )                              |   |   |   |   |   |   | (75 | ) |   |   |   |   |
| Workforce reduction (Note 9)                            |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (6 | ) |
| Other:                                                       |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Montana hydroelectric litigation (Note 10)                   |   |                             | (1     | )                              |   |   |   |   |   |   | (33 | ) |   |   |   |   |
| Health Care Reform – tax impact (Note 9)               |   |                             |   |                           |   |   |   |   |   |   | (5 | ) |   |   |   |   |
| Total                                                        |   | $                                | (134   | )                              |   | $ | (120 | ) |   | $ | (238 | ) |   | $ | (96 | ) |

| (a) |   | See "Reconciliation of Economic Activity" below.                                                                                                                                                                                                                                                                          |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Represents other-than-temporary impairment charges on securities, including reversals of previous impairments when securities previously impaired were sold.                                                                                                                                                              |
| (c) |   | The six months ended June 30, 2009 includes a pre-tax gain of $4 million related to the settlement of a dispute regarding the sale of certain annual nitrogen oxide allowance put options.  Also, see Note 13 to the Financial Statements for information on impairments of sulfur dioxide emission allowances. |

|                                                                               |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                                               |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                                               |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Revenues                                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Unregulated retail electric and gas                                                |   | $                                | (2     | )                              |   | $ | 1 |   |   | $ | 8 |   |   | $ | 2 |   |
| Wholesale energy marketing                                                         |   |                             | (666   | )                              |   |   | (112 | ) |   |   | (242 | ) |   |   | 240 |   |
| Operating Expenses                                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel                                                                               |   |                             | (8     | )                              |   |   | 26 |   |   |   | (3 | ) |   |   | 28 |   |
| Energy purchases                                                                   |   |                             | 445    |                           |   |   | (65 | ) |   |   | (118 | ) |   |   | (334 | ) |
| Energy-related economic activity (a)                                               |   |                             | (231   | )                              |   |   | (150 | ) |   |   | (355 | ) |   |   | (64 | ) |
| Option premiums (b)                                                                |   |                             | 11     |                           |   |   |   |   |   |   | 25 |   |   |   |   |   |
| Adjusted energy-related economic activity                                          |   |                             | (220   | )                              |   |   | (150 | ) |   |   | (330 | ) |   |   | (64 | ) |
| Less:  Monetization of certain full-requirement sales contracts (c) |   |                             | (127   | )                              |   |   |   |   |   |   | (127 | ) |   |   |   |   |
| Adjusted energy-related economic activity, net - pre tax                           |   | $                                | (93    | )                              |   | $ | (150 | ) |   | $ | (203 | ) |   | $ | (64 | ) |
|                                                                               |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted energy-related economic activity, net - after tax                         |   | $                                | (54    | )                              |   | $ | (88 | ) |   | $ | (119 | ) |   | $ | (38 | ) |
| Monetization of certain full-requirement sales contracts - after tax (c)      |   | $                                | (75    | )                              |   |   |   |   |   | $ | (75 | ) |   |   |   |   |

| (a) |   | The components of this item are from the table within "Commodity Price Risk (Non-trading) - Economic Activity" in Note 14 to the Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Adjustment for the net deferral and amortization of option premiums over the delivery period of the item that was hedged or upon realization.  After-tax amounts for the three and six months ended June 30, 2010 were $6 million and $14 million.                                                                                                                                                                                                                                                                                                                                                                          |
| (c) |   | See "Commodity Price Risk - (Non-trading) - Monetization of Certain Full-Requirement Sales Contracts" in Note 14 to the Financial Statements for additional information.  This item includes the $60 million loss ($36 million after tax) referenced in Note 14 associated with full-requirement sales contracts that have been monetized.  Also included in this item is a net loss of $67 million ($39 million after tax) on economic activity related to these full-requirement sales contracts.  Such amount was previously recorded in "Adjusted energy-related economic activity, net." |

|                                         |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|----------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                         |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                         |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility revenues                             |   | $                                | 172    |                           |   | $ | 155 |   |   | $ | 375 |   |   | $ | 331 |   |
| Energy-related businesses                    |   |                             | 6      |                           |   |   | 8 |   |   |   | 16 |   |   |   | 15 |   |
| Total operating revenues                     |   |                             | 178    |                           |   |   | 163 |   |   |   | 391 |   |   |   | 346 |   |
| Other operation and maintenance              |   |                             | 39     |                           |   |   | 31 |   |   |   | 83 |   |   |   | 65 |   |
| Depreciation                                 |   |                             | 29     |                           |   |   | 27 |   |   |   | 58 |   |   |   | 53 |   |
| Taxes, other than income                     |   |                             | 13     |                           |   |   | 13 |   |   |   | 27 |   |   |   | 26 |   |
| Energy-related businesses                    |   |                             | 4      |                           |   |   | 4 |   |   |   | 8 |   |   |   | 7 |   |
| Total operating expenses                     |   |                             | 85     |                           |   |   | 75 |   |   |   | 176 |   |   |   | 151 |   |
| Other Income (Expense) - net       |   |                             | 1      |                           |   |   | (13 | ) |   |   | 2 |   |   |   | (11 | ) |
| Interest Expense                             |   |                             | 33     |                           |   |   | 18 |   |   |   | 64 |   |   |   | 31 |   |
| Income Taxes                                 |   |                             | 3      |                           |   |   | (5 | ) |   |   | 19 |   |   |   | 4 |   |
| Net Income Attributable to PPL Energy Supply |   | $                                | 58     |                           |   | $ | 62 |   |   | $ | 134 |   |   | $ | 149 |   |

|                            | June 30, 2010 vs. June 30, 2009 |
|---------------------------------|-------------------------------------------|
|                            | Three Months Ended                        |   | Six Months Ended |
| U.K.                            |                                      |   |   |   |   |   |   |
| Utility revenues                | $                                         | 10 |   |   | $ | 16 |   |
| Other operation and maintenance |                                      | (6 | ) |   |   | (14 | ) |
| Interest expense                |                                      | (10 | ) |   |   | (22 | ) |
| Income taxes                    |                                      | (12 | ) |   |   | (25 | ) |
| Foreign currency exchange rates |                                      | 1 |   |   |   | 8 |   |
| Other                           |                                      |   |   |   |   | (1 | ) |
| U.S. Income taxes               |                                      | 6 |   |   |   | 11 |   |
| Other                           |                                      | 2 |   |   |   | 4 |   |
| Special items                   |                                      | 5 |   |   |   | 8 |   |
|                            | $                                         | (4 | ) |   | $ | (15 | ) |

| · | Higher U.K. utility revenues for both periods primarily due to price increases in April 2010 and 2009.  The six-month period was partially offset by revised estimates of electricity network line losses.                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                    |
| · | Higher U.K. other operation and maintenance for both periods primarily due to higher pension expenses resulting from an increase in amortization of actuarial losses and a decrease in the discount rate.                                                                                               |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Higher U.K. interest expense for both periods on the Index-linked Senior Unsecured Notes primarily due to higher inflation rates and higher interest expense related to the March 2010 debt issuance.                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Higher U.K. income taxes for both periods primarily due to favorable settlements of uncertain tax positions in 2009.                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Changes in U.K. foreign currency exchange rates positively affected WPD earnings for both periods.  The weighted-average exchange rate for the British pound sterling was $1.51 and $1.56 for the three and six months ended June 30, 2010, compared with $1.46 for the same periods in 2009. |
|   |                                                                                                                                                                                                                                                                                                    |
| · | Lower U.S. income taxes for both periods due to favorable foreign source income tax benefits as a result of dividend planning and higher U.K. pension contributions.                                                                                                                                    |

|                                                              |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                              |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                              |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency-related economic hedges - unrealized impacts (a) |   | $                                | (1     | )                              |   | $ | (6 | ) |   | $ | (1 | ) |   | $ | (6 | ) |
| Asset impairments                                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (1 | ) |
| Workforce reduction (Note 9)                                 |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   | (2 | ) |
| Total                                                             |   | $                                | (1     | )                              |   | $ | (6 | ) |   | $ | (1 | ) |   | $ | (9 | ) |

| (a) |   | Represents unrealized gains (losses) on contracts that economically hedge anticipated earnings denominated in British pound sterling. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income (a)                |   | $                                | 179    |                           |   | $ | 34 |   |   | $ | 570 |   |   | $ | 329 |   |
| Adjustments:                        |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility (a)                         |   |                             | (172   | )                              |   |   | (155 | ) |   |   | (375 | ) |   |   | (331 | ) |
| Energy-related businesses, net (b)  |   |                             | (9     | )                              |   |   | (6 | ) |   |   | (15 | ) |   |   | (13 | ) |
| Other operation and maintenance (a) |   |                             | 300    |                           |   |   | 270 |   |   |   | 642 |   |   |   | 550 |   |
| Depreciation (a)                    |   |                             | 92     |                           |   |   | 80 |   |   |   | 183 |   |   |   | 153 |   |
| Taxes, other than income (a)   |   |                             | 24     |                           |   |   | 21 |   |   |   | 49 |   |   |   | 41 |   |
| Revenue adjustments (c)             |   |                             | 655    |                           |   |   | 119 |   |   |   | 213 |   |   |   | (226 | ) |
| Expense adjustments (c)             |   |                             | (448   | )                              |   |   | 26 |   |   |   | 97 |   |   |   | 281 |   |
| Domestic gross energy margins       |   | $                                | 621    |                           |   | $ | 389 |   |   | $ | 1,364 |   |   | $ | 784 |   |

| (a) |   | As reported on the Statements of Income.                                                                              |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------|
| (b) |   | Amount represents the net of "Energy-related businesses" revenue and expense as reported on the Statements of Income. |
| (c) |   | The components of these adjustments are detailed in the tables below.                                                 |

|                                                     |   | Three Months Ended June 30, |
|----------------------------------------------------------|--------|----------------------------------|
|                                                     |   | 2010                             |   | 2009 |   | Change |
| Revenue                                                  |   |                             |   |   |   |   |   |   |   |   |   |   |
| Wholesale energy marketing (a)                           |   | $                                | 595 |   |   | $ | 646 |   |   | $ | (51 | ) |
| Wholesale energy marketing to affiliate (a)              |   |                             | 64 |   |   |   | 411 |   |   |   | (347 | ) |
| Unregulated retail electric and gas (a)                  |   |                             | 101 |   |   |   | 32 |   |   |   | 69 |   |
| Net energy trading margins (a)                           |   |                             | 5 |   |   |   | 7 |   |   |   | (2 | ) |
| Revenue adjustments (b)                                  |   |                             |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)         |   |                             | 656 |   |   |   | 111 |   |   |   | 545 |   |
| Gains (losses) from sale of RECs (d)                |   |                             | (1 | ) |   |   | 1 |   |   |   | (2 | ) |
| Revenues from Supply segment discontinued operations (e) |   |                             |   |   |   |   | 7 |   |   |   | (7 | ) |
| Total revenue adjustments                                |   |                             | 655 |   |   |   | 119 |   |   |   | 536 |   |
|                                                     |   |                             | 1,420 |   |   |   | 1,215 |   |   |   | 205 |   |
| Expense                                                  |   |                             |   |   |   |   |   |   |   |   |   |   |
| Fuel (a)                                                 |   |                             | 263 |   |   |   | 186 |   |   |   | 77 |   |
| Energy purchases (a)                                     |   |                             | 88 |   |   |   | 646 |   |   |   | (558 | ) |
| Energy purchases from affiliate (a)                      |   |                             |   |   |   |   | 20 |   |   |   | (20 | ) |
| Expense adjustments (b)                                  |   |                             |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)         |   |                             | 436 |   |   |   | (39 | ) |   |   | 475 |   |
| Other                                                    |   |                             | 12 |   |   |   | 13 |   |   |   | (1 | ) |
| Total expense adjustments                                |   |                             | 448 |   |   |   | (26 | ) |   |   | 474 |   |
|                                                     |   |                             | 799 |   |   |   | 826 |   |   |   | (27 | ) |
| Domestic gross energy margins                            |   | $                                | 621 |   |   | $ | 389 |   |   | $ | 232 |   |

|                                                     |   | Six Months Ended June 30, |
|----------------------------------------------------------|--------|--------------------------------|
|                                                     |   | 2010                           |   | 2009 |   | Change |
| Revenue                                                  |   |                           |   |   |   |   |   |   |   |   |   |   |
| Wholesale energy marketing (a)                           |   | $                              | 2,405 |   |   | $ | 1,796 |   |   | $ | 609 |   |
| Wholesale energy marketing to affiliate (a)              |   |                           | 179 |   |   |   | 908 |   |   |   | (729 | ) |
| Unregulated retail electric and gas (a)                  |   |                           | 205 |   |   |   | 74 |   |   |   | 131 |   |
| Net energy trading margins (a)                           |   |                           | 16 |   |   |   | (5 | ) |   |   | 21 |   |
| Revenue adjustments (b)                                  |   |                           |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)         |   |                           | 209 |   |   |   | (242 | ) |   |   | 451 |   |
| Gains from sale of RECs (d)                              |   |                           |   |   |   |   | 1 |   |   |   | (1 | ) |
| Revenues from Supply segment discontinued operations (e) |   |                           | 4 |   |   |   | 15 |   |   |   | (11 | ) |
| Total revenue adjustments                                |   |                           | 213 |   |   |   | (226 | ) |   |   | 439 |   |
|                                                     |   |                           | 3,018 |   |   |   | 2,547 |   |   |   | 471 |   |
| Expense                                                  |   |                           |   |   |   |   |   |   |   |   |   |   |
| Fuel (a)                                                 |   |                           | 496 |   |   |   | 444 |   |   |   | 52 |   |
| Energy purchases (a)                                     |   |                           | 1,254 |   |   |   | 1,560 |   |   |   | (306 | ) |
| Energy purchases from affiliate (a)                      |   |                           | 1 |   |   |   | 40 |   |   |   | (39 | ) |
| Expense adjustments (b)                                  |   |                           |   |   |   |   |   |   |   |   |   |   |
| Impact from energy-related economic activity (c)         |   |                           | (121 | ) |   |   | (306 | ) |   |   | 185 |   |
| Other                                                    |   |                           | 24 |   |   |   | 25 |   |   |   | (1 | ) |
| Total expense adjustments                                |   |                           | (97 | ) |   |   | (281 | ) |   |   | 184 |   |
|                                                     |   |                           | 1,654 |   |   |   | 1,763 |   |   |   | (109 | ) |
| Domestic gross energy margins                            |   | $                              | 1,364 |   |   | $ | 784 |   |   | $ | 580 |   |

| (a) |   | As reported on the Statements of Income.                                                                                                                                                                                                                                                                                                                                                        |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | To include/exclude the impact of any revenues and expenses consistent with the way management reviews domestic gross energy margins.                                                                                                                                                                                                                                                            |
| (c) |   | See "Commodity Price Risk (Non-trading) - Economic Activity" in Note 14 to the Financial Statements for additional information.  In addition, the three and six months ended June 30, 2010 include a pre-tax gain of $11 million and $25 million related to the amortization of option premiums.                                                                                      |
| (d) |   | Included in "Other operation and maintenance" on the Statements of Income.                                                                                                                                                                                                                                                                                                                      |
| (e) |   | The six months ended June 30, 2010 and the three and six months ended June 30, 2009 include revenues associated with the Long Island generation business.  The three and six months ended June 30, 2009 include revenues associated with the majority of PPL Maine's hydroelectric generation business.  See Note 8 to the Financial Statements for additional information. |

|                          |   | Three Months Ended June 30, |
|-------------------------------|--------|----------------------------------|
|                          |   | 2010                             |   | 2009 |   | Change |
| Non-trading:                  |   |                             |   |   |   |   |   |   |   |   |   |   |
| Eastern U.S.                  |   | $                                | 526 |   |   | $ | 301 |   |   | $ | 225 |   |
| Western U.S.                  |   |                             | 88 |   |   |   | 77 |   |   |   | 11 |   |
| Net energy trading            |   |                             | 7 |   |   |   | 11 |   |   |   | (4 | ) |
| Domestic gross energy margins |   | $                                | 621 |   |   | $ | 389 |   |   | $ | 232 |   |

|                          |   | Six Months Ended June 30, |
|-------------------------------|--------|--------------------------------|
|                          |   | 2010                           |   | 2009 |   | Change |
| Non-trading:                  |   |                           |   |   |   |   |   |   |   |   |   |   |
| Eastern U.S.                  |   | $                              | 1,175 |   |   | $ | 624 |   |   | $ | 551 |   |
| Western U.S.                  |   |                           | 171 |   |   |   | 161 |   |   |   | 10 |   |
| Net energy trading            |   |                           | 18 |   |   |   | (1 | ) |   |   | 19 |   |
| Domestic gross energy margins |   | $                              | 1,364 |   |   | $ | 784 |   |   | $ | 580 |   |

|                                 |   | June 30, 2010 vs. June 30, 2009 |
|--------------------------------------|--------|-------------------------------------------|
|                                 |   | Three Months Ended                        |   | Six Months Ended |
|                                 |   |                                      |   |   |   |   |   |   |
| U.K. electric delivery revenue       |   | $                                         | 14 |   |   | $ | 23 |   |
| U.K. foreign currency exchange rates |   |                                      | 3 |   |   |   | 21 |   |
|                                 |   | $                                         | 17 |   |   | $ | 44 |   |

|                                                   |   | June 30, 2010 vs. June 30, 2009 |
|--------------------------------------------------------|--------|-------------------------------------------|
|                                                   |   | Three Months Ended                        |   | Six Months Ended |
|                                                   |   |                                      |   |   |   |   |
| Montana hydroelectric litigation (Note 10)        |   | $                                         | 2 |   |   | $ | 51 |   |
| Costs at fossil/hydroelectric plants (a)               |   |                                      | 25 |   |   |   | 24 |   |
| Defined benefit costs                                  |   |                                      | 8 |   |   |   | 18 |   |
| Other costs at Susquehanna nuclear plant               |   |                                      | 5 |   |   |   | 8 |   |
| Outage costs at Susquehanna nuclear plant (b)     |   |                                      | (25 | ) |   |   | 6 |   |
| Uncollectible accounts                                 |   |                                      |   |   |   |   | 5 |   |
| Impairment and other charges - emission allowances (c) |   |                                      | 8 |   |   |   | (14 | ) |
| Workforce reduction (Note 9)                           |   |                                      |   |   |   |   | (13 | ) |
| Other - Domestic                                       |   |                                      | 5 |   |   |   | 1 |   |
| Other - U.K.                                           |   |                                      | 2 |   |   |   | 6 |   |
|                                                   |   | $                                         | 30 |   |   | $ | 92 |   |

| (a) |   | Relates primarily to increased outage costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Relates primarily to the timing of outage costs at the Susquehanna nuclear plant. In 2010, the refueling and inspection outage commenced in early March and in 2009 it commenced in April.                                                                                                                                                                                                                                                                                                                         |
| (c) |   | Relates to an $8 million higher impairment of sulfur dioxide emission allowances for the three-month period and a $19 million lower impairment of sulfur dioxide emission allowances for the six-month period.  See Note 13 to the Financial Statements for additional information.  Partially offsetting this decrease for the six-month period was a $5 million increase in the charge for the settlement of a dispute regarding the sale of certain annual nitrogen oxide allowance put options. |

|                                 |   | June 30, 2010 vs. June 30, 2009 |
|--------------------------------------|--------|-------------------------------------------|
|                                 |   | Three Months Ended                        |   | Six Months Ended |
|                                 |   |                                      |   |   |   |   |
| Additions to PP&E (a)            |   | $                                         | 12 |   |   | $ | 27 |   |
| U.K. foreign currency exchange rates |   |                                      |   |   |   |   | 3 |   |
|                                 |   | $                                         | 12 |   |   | $ | 30 |   |

| (a) |   | 2009 additions included the completion of the Brunner Island environmental projects, which impacted depreciation expense primarily beginning in the second half of 2009. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | June 30, 2010 vs. June 30, 2009 |
|-------------------------------------|--------|-------------------------------------------|
|                                |   | Three Months Ended                        |   | Six Months Ended |
|                                |   |                                      |   |   |   |   |
| Pennsylvania gross receipts tax (a) |   | $                                         | 4 |   |   | $ | 7 |   |
| Other                               |   |                                      | (1 | ) |   |   | 1 |   |
|                                |   | $                                         | 3 |   |   | $ | 8 |   |

| (a) |   | Primarily due to an increase in electricity revenues as customers choose alternative suppliers in 2010 due to the expiration of generation rate caps.  This tax is passed through to customers, therefore it has minimal impact on earnings.  This tax is included in "Domestic Gross Energy Margins" above. |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                             |   | June 30, 2010 vs. June 30, 2009 |
|------------------------------------------------------------------|--------|-------------------------------------------|
|                                                             |   | Three Months Ended                        |   | Six Months Ended |
|                                                             |   |                                      |   |   |   |   |
| Inflation adjustment on U.K. Index-linked Senior Unsecured Notes |   | $                                         | 7 |   |   | $ | 21 |   |
| Capitalized interest (a)                                         |   |                                      | 3 |   |   |   | 13 |   |
| Montana hydroelectric litigation (Note 10)                       |   |                                      | 1 |   |   |   | 8 |   |
| Short-term debt interest expense                                 |   |                                      | 5 |   |   |   | 4 |   |
| U.K. foreign currency exchange rates                             |   |                                      | 1 |   |   |   | 3 |   |
| Long-term debt interest expense                                  |   |                                      | 1 |   |   |   | (7 | ) |
| Other                                                            |   |                                      | (2 | ) |   |   | 5 |   |
|                                                             |   | $                                         | 16 |   |   | $ | 47 |   |

| (a) |   | During the six months ended June 30, 2009, $8 million was capitalized related to the Brunner Island environmental projects.  These projects were completed in 2009. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                           |   | June 30, 2010 vs. June 30, 2009 |
|----------------------------------------------------------------|--------|-------------------------------------------|
|                                                           |   | Three Months Ended                        |   | Six Months Ended |
|                                                           |   |                                      |   |   |   |   |
| Higher pre-tax book income                                     |   | $                                         | 55 |   |   | $ | 86 |   |
| Foreign tax reserve adjustments (a)                            |   |                                      | 37 |   |   |   | 51 |   |
| Health Care Reform (b)                                         |   |                                      |   |   |   |   | 5 |   |
| U.K. capital loss benefit (a)                                  |   |                                      | (25 | ) |   |   | (25 | ) |
| Federal and state tax reserve adjustments (c)                  |   |                                      | 4 |   |   |   | (6 | ) |
| Domestic manufacturing deduction (d)                           |   |                                      | (6 | ) |   |   | (5 | ) |
| U.S. income tax on foreign earnings, net of foreign tax credit |   |                                      | (7 | ) |   |   | (4 | ) |
| Other                                                          |   |                                      | (2 | ) |   |   | 1 |   |
|                                                           |   | $                                         | 56 |   |   | $ | 103 |   |

| (a) |   | During the three months ended June 30, 2010, PPL Energy Supply recorded a $25 million foreign tax benefit and a related $22 million foreign tax reserve related to losses generated by restructuring.  During the three months ended June 30, 2009, PPL Energy Supply recorded $15 million of tax benefits related to the settlement of a U.K. tax dispute. During the six months ended June 30, 2010, PPL Energy Supply recorded a $25 million foreign tax benefit and a related $22 million foreign tax reserve related to losses generated by restructuring.  During the six months ended June 30, 2009, PPL Energy Supply recorded $29 million of tax benefits related to settlements of U.K. tax disputes. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Beginning in 2013, provisions within Health Care Reform eliminated the tax deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D Coverage.  As a result, during the six months ended June 30, 2010, PPL Energy Supply recorded deferred income tax expense.                                                                                                                                                                                                                                                                                                                                    |
| (c) |   | During the six months ended June 30, 2010, PPL Energy Supply recorded $7 million of tax benefits related to claims associated with foreign earnings and the settlement of a state tax dispute.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (d) |   | During three and six months ended June 30, 2010, PPL Energy Supply recorded an increase in tax benefits related to domestic manufacturing deductions due to an increase in domestic taxable income resulting from the expiration of generation rate caps in 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

|                      |   | June 30, 2010 |   | December 31, 2009 |
|---------------------------|--------|--------------------|--------|-------------------|
|                      |   |               |   |              |   |   |   |   |
| Cash and cash equivalents |   | $                  | 4,134  |              |   | $ | 245 |   |
| Short-term debt           |   | $                  | 466    |              |   | $ | 639 |   |

| · | contributions from Member of $3.5 billion;                                                                        |
|--------|-------------------------------------------------------------------------------------------------------------------|
| · | $602 million of cash provided by operating activities;                                                            |
| · | proceeds of $597 million from the issuance of long-term debt;                                                     |
| · | proceeds of $124 million from the sale of the Long Island generation business;                                    |
| · | $464 million of capital expenditures;                                                                             |
| · | distributions to Member of $364 million; and                                                                      |
| · | a net decrease of $158 million in short-term debt (excluding the impact of U.K. foreign currency exchange rates). |

|                                             |   | Committed Capacity |   | Borrowed |   | Letters of Credit Issued  |   | Unused Capacity |
|--------------------------------------------------|--------|--------------------|--------|----------|--------|--------------------------------|--------|-----------------|
|                                             |   |               |   |     |   |                           |   |            |   |   |   |   |
| PPL Energy Supply Domestic Credit Facilities (a) |   | $                  | 4,125  |     |   | $                              | 285    |            |   | $ | 529 |   |   | $ | 3,311 |   |
|                                             |   |               |   |     |   |                           |   |            |   |   |   |   |   |   |   |   |
| WPDH Limited Credit Facility                     |   | ₤            | 150    |     |   | ₤                        | 123    |            |   |   | n/a |   |   | ₤ | 27 |   |
| WPD (South West) Credit Facility                 |   |               | 210    |     |   |                           |   |            |   |   | n/a |   |   |   | 210 |   |
| Total WPD Credit Facilities (b)                  |   | ₤            | 360    |     |   | ₤                        | 123    |            |   |   | n/a |   |   | ₤ | 237 |   |

| (a) |   | In March 2010, PPL Energy Supply's 364-day $200 million bilateral credit facility was amended.  The amendment included extending the expiration date to March 2013, thereby making it a three-year facility, and setting related fees based on the company's public debt rating. In June 2010, PPL Energy Supply closed into escrow a new $4 billion syndicated credit facility, expiring December 31, 2014, that is intended to replace its existing 364-day $400 million and 5-year $3.2 billion syndicated credit facilities upon effectiveness.  Subject to certain conditions, the new credit facility will become effective on the earliest of (i) December 31, 2010, (ii) the date on which the acquisition of E.ON U.S. is completed by PPL, or (iii) the date on which the purchase and sale agreement relating to the acquisition of E.ON U.S. has been terminated or expired or such acquisition has otherwise been abandoned by PPL. The borrowing outstanding at June 30, 2010 was repaid by PPL Energy Supply in July 2010. The commitments under PPL Energy Supply's existing domestic credit facilities are provided by a diverse bank group, with no one bank and its affiliates providing an aggregate commitment of more than 16% of the total committed capacity. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | The commitments under WPD's credit facilities are provided by eight banks, with no one bank providing more than 25% of the total committed capacity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

| · | Revised the outlook of PPL Energy Supply;                                                                |
|--------|----------------------------------------------------------------------------------------------------------|
| · | Revised the outlook of WPDH Limited, WPD (South Wales) and WPD (South West); and                         |
| · | Affirmed its credit ratings for PPL Energy Supply, WPDH Limited, WPD (South Wales) and WPD (South West). |

|                                                                      |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|---------------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                                      |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                                      |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of contracts outstanding at the beginning of the period        |   | $                                | 1,726  |                           |   | $ | 728 |   |   | $ | 1,280 |   |   | $ | 402 |   |
| Contracts realized or otherwise settled during the period                 |   |                             | (68    | )                              |   |   | 102 |   |   |   | (182 | ) |   |   | 201 |   |
| Fair value of new contracts entered into during the period                |   |                             | (11    | )                              |   |   | 133 |   |   |   | 7 |   |   |   | 55 |   |
| Changes in fair value attributable to changes in valuation techniques (a) |   |                             | (23    | )                              |   |   |   |   |   |   | (23 | ) |   |   |   |   |
| Other changes in fair value                                               |   |                             | (321   | )                              |   |   | 102 |   |   |   | 221 |   |   |   | 407 |   |
| Fair value of contracts outstanding at the end of the period              |   | $                                | 1,303  |                           |   | $ | 1,065 |   |   | $ | 1,303 |   |   | $ | 1,065 |   |

| (a) |   | In June 2010, PPL Energy Supply received market bids for certain full-requirement sales contracts that were monetized in early July.  See Note 14 to the Financial Statements for additional information.  At June 30, 2010, these contracts were valued based on the bids received (the market approach).  In prior periods, the fair value of these contracts was measured using the income approach. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   | Net Asset (Liability)     |
|--------------------------------------------------------------|--------|---------------------------|
|                                                         |   | Maturity Less Than 1 Year |   | Maturity 1-3 Years |   | Maturity 4-5 Years |   | Maturity in Excess of 5 Years |   | Total Fair Value |
| Source of Fair Value                                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices based on significant other observable inputs          |   | $                         | 442 |   |   | $ | 764 |   |   | $ | 46 |   |   |   |   |   |   | $ | 1,252 |   |
| Prices based on significant unobservable inputs              |   |                      | 3 |   |   |   | (4 | ) |   |   | 2 |   |   | $ | 50 |   |   |   | 51 |   |
| Fair value of contracts outstanding at the end of the period |   | $                         | 445 |   |   | $ | 760 |   |   | $ | 48 |   |   | $ | 50 |   |   | $ | 1,303 |   |

|                                                               |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|--------------------------------------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                                               |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                                               |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of contracts outstanding at the beginning of the period |   | $                                | 2      |                           |   | $ | (37 | ) |   | $ | (6 | ) |   | $ | (75 | ) |
| Contracts realized or otherwise settled during the period          |   |                             | 11     |                           |   |   |   |   |   |   | 10 |   |   |   | 33 |   |
| Fair value of new contracts entered into during the period         |   |                             | 2      |                           |   |   | 9 |   |   |   | 2 |   |   |   | 35 |   |
| Other changes in fair value                                        |   |                             | (11    | )                              |   |   | 15 |   |   |   | (2 | ) |   |   | (6 | ) |
| Fair value of contracts outstanding at the end of the period       |   | $                                | 4      |                           |   | $ | (13 | ) |   | $ | 4 |   |   | $ | (13 | ) |

|                                                         |   | Net Asset (Liability)     |
|--------------------------------------------------------------|--------|---------------------------|
|                                                         |   | Maturity Less Than 1 Year |   | Maturity 1-3 Years |   | Maturity 4-5 Years |   | Maturity in Excess of 5 Years |   | Total Fair Value |
| Source of Fair Value                                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices quoted in active markets for identical instruments    |   | $                         | 2 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 2 |   |
| Prices based on significant other observable inputs          |   |                      | (2 | ) |   | $ | 1 |   |   | $ | 5 |   |   | $ | 1 |   |   |   | 5 |   |
| Prices based on significant unobservable inputs              |   |                      | (3 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3 | ) |
| Fair value of contracts outstanding at the end of the period |   | $                         | (3 | ) |   | $ | 1 |   |   | $ | 5 |   |   | $ | 1 |   |   | $ | 4 |   |

|                                          |   | Trading VaR   |   | Non-Trading VaR |
|-----------------------------------------------|--------|---------------|--------|-----------------|
|                                          |   | June 30, |   | Dec. 31,        |   | June 30, |   | Dec. 31, |
|                                          |   | 2010          |   | 2009            |   | 2010 |   | 2009 |
|                                          |   |          |   |            |   |   |   |   |   |   |   |   |   |   |   |   |
| 95% Confidence Level, Five-Day Holding Period |   |          |   |            |   |   |   |   |   |   |   |   |   |   |   |   |
| Period End                                    |   | $             | 4      |            |   | $ | 3 |   |   | $ | 9 |   |   | $ | 8 |   |
| Average for the Period                        |   |          | 4      |            |   |   | 4 |   |   |   | 10 |   |   |   | 9 |   |
| High                                          |   |          | 5      |            |   |   | 8 |   |   |   | 11 |   |   |   | 11 |   |
| Low                                           |   |          | 3      |            |   |   | 1 |   |   |   | 9 |   |   |   | 8 |   |

|        |   | 2010   |   | 2011   |
|-------------|--------|--------|--------|--------|
|        |   |   |   |   |   |   |   |   |
| Non-trading |   | $      | (1     | )      |   | $ | (2 | ) |

|                     |   | Exposure Hedged |   | Fair Value, Net - Asset (a) |   | Effect of a 10% Adverse Movementin Rates (b) |
|--------------------------|--------|-----------------|--------|-----------------------------|--------|----------------------------------------------|
| Cash flow hedges         |   |            |   |                        |   |                                         |   |   |   |   |   |   |
| Interest rate swaps (c)  |   |            |   |                        |   |                                         |   |   |   |   |   |   |
| Cross-currency swaps (d) |   | $               | 302    |                        |   | $                                            | 52 |   |   | $ | (39 | ) |
| Fair value hedges        |   |            |   |                        |   |                                         |   |   |   |   |   |   |
| Interest rate swaps (e)  |   |            |   |                        |   |                                         |   |   |   |   |   |   |

| (a) |   | Includes accrued interest, if applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Effects of adverse movements decrease assets or increase liabilities, as applicable, which could result in an asset becoming a liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (c) |   | PPL and PPL Energy Supply utilize various risk management instruments to reduce PPL Energy Supply's exposure to the expected future cash flow variability of PPL Energy Supply's debt instruments.  These risks include exposure to adverse interest rate movements for outstanding variable rate debt and for future anticipated financing.  While PPL Energy Supply is exposed to changes in the fair value of these instruments, any changes in the fair value of these instruments are recorded in equity and then reclassified into earnings in the same period during which the item being hedged affects earnings.  Sensitivities represent a 10% adverse movement in interest rates. |
| (d) |   | WPDH Limited uses cross-currency swaps to hedge the interest payments and principal of its U.S. dollar-denominated senior notes with maturity dates ranging from December 2017 to December 2028.  While PPL Energy Supply is exposed to changes in the fair value of these instruments, any change in the fair value of these instruments is recorded in equity and reclassified into earnings in the same period during which the item being hedged affects earnings.  Sensitivities represent a 10% adverse movement in both interest rates and foreign currency exchange rates.                                                                                                                     |
| (e) |   | PPL and PPL Energy Supply utilize various risk management instruments to adjust the mix of fixed and floating interest rates in PPL Energy Supply's debt portfolio.  The change in fair value of these instruments, as well as the offsetting change in the value of the hedged exposure of the debt, is reflected in earnings.  Sensitivities represent a 10% adverse movement in interest rates.                                                                                                                                                                                                                                                                                                     |

|                      |   | Exposure Hedged |   | Fair Value, Net - Asset |   | Effect of a 10% Adverse Movement in Foreign Currency Exchange Rates (a) |
|---------------------------|--------|-----------------|--------|-------------------------|--------|-------------------------------------------------------------------------|
|                      |   |            |   |                    |   |                                                                    |   |   |   |   |   |   |
| Net investment hedges (b) |   | £          | 15     |                    |   | $                                                                       | 7 |   |   | $ | (2 | ) |
| Economic hedges (c)       |   |            | 56     |                    |   |                                                                    | 1 |   |   |   | (2 | ) |

| (a) |   | Effects of adverse movements decrease assets or increase liabilities, as applicable, which could result in an asset becoming a liability.                                                                                                                                                                                                        |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | To protect the value of a portion of PPL Energy Supply's net investment in WPD, PPL executed forward contracts to sell British pounds sterling.  The settlement dates of these contracts range from March 2011 through June 2011.                                                                                                      |
| (c) |   | To economically hedge the translation of 2010 expected income denominated in British pounds sterling to U.S. dollars, PPL entered into a combination of average rate forwards and average rate options to sell British pounds sterling.  The forwards and options have termination dates ranging from July 2010 through December 2010. |

----

|   |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|--------|--------|----------------------------------|--------|--------------------------------|
|   |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|   |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   | $                                | 16     |                           |   | $ | 17 |   |   | $ | 53 |   |   | $ | 66 |   |

|                                           |   | June 30, 2010 vs. June 30, 2009 |
|------------------------------------------------|--------|-------------------------------------------|
|                                           |   | Three Months Ended                        |   | Six Months Ended |
|                                           |   |                                      |   |   |   |   |   |   |
| Domestic gross delivery margins                |   | $                                         | 8 |   |   | $ | (1 | ) |
| Other operation and maintenance                |   |                                      | (9 | ) |   |   | (16 | ) |
| Depreciation                                   |   |                                      | (2 | ) |   |   | (2 | ) |
| Interest expense                               |   |                                      | 4 |   |   |   | 6 |   |
| Distributions on preferred securities (Note 7) |   |                                      | (3 | ) |   |   | (3 | ) |
| Other                                          |   |                                      | 1 |   |   |   | (3 | ) |
| Special items                                  |   |                                      |   |   |   |   | 6 |   |
|                                           |   | $                                         | (1 | ) |   | $ | (13 | ) |

| · | See "Domestic Gross Delivery Margins" for an explanation of margins generated by PPL Electric's domestic regulated electric delivery operations.                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                               |
| · | Other operation and maintenance increased for both periods primarily due to higher payroll costs due to increased staffing and higher vegetation management costs. |
|   |                                                                                                                                                               |
| · | Interest expense decreased for both periods primarily due to long-term debt retirements in the third quarter of 2009.                                              |

|                              |   | Six Months EndedJune 30, 2009 |
|-----------------------------------|--------|-------------------------------|
|                              |   |                          |   |   |
| Asset impairments                 |   | $                             | (1 | ) |
| Workforce reduction (Note 9) |   |                          | (5 | ) |
| Total                             |   | $                             | (6 | ) |

|                                |   | Three Months Ended June 30, |   | Six Months Ended June 30, |
|-------------------------------------|--------|----------------------------------|--------|--------------------------------|
|                                |   | 2010                             |   | 2009                           |   | 2010 |   | 2009 |
|                                |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Income (a)                |   | $                                | 56     |                           |   | $ | 61 |   |   | $ | 143 |   |   | $ | 167 |   |
| Adjustments:                        |   |                             |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Other operation and maintenance (a) |   |                             | 131    |                           |   |   | 98 |   |   |   | 251 |   |   |   | 204 |   |
| Depreciation (a)                    |   |                             | 33     |                           |   |   | 30 |   |   |   | 67 |   |   |   | 63 |   |
| Taxes, other than income (a)   |   |                             | 29     |                           |   |   | 46 |   |   |   | 76 |   |   |   | 98 |   |
| Expense adjustments (b)             |   |                             | (50    | )                              |   |   | (50 | ) |   |   | (117 | ) |   |   | (110 | ) |
| Domestic gross delivery margins     |   | $                                | 199    |                           |   | $ | 185 |   |   | $ | 420 |   |   | $ | 422 |   |

| (a) |   | As reported on the Statements of Income.                              |
|-----|--------|-----------------------------------------------------------------------|
| (b) |   | The components of these adjustments are detailed in the tables below. |

|                                             |   | Three Months Ended June 30, |
|--------------------------------------------------|--------|----------------------------------|
|                                             |   | 2010                             |   | 2009 |   | Change |
| Revenue                                          |   |                             |   |   |   |   |   |   |   |   |   |   |
| Retail electric (a)                              |   | $                                | 522 |   |   | $ | 727 |   |   | $ | (205 | ) |
| Wholesale electric to affiliate (a)              |   |                             |   |   |   |   | 20 |   |   |   | (20 | ) |
|                                             |   |                             | 522 |   |   |   | 747 |   |   |   | (225 | ) |
| Expense                                          |   |                             |   |   |   |   |   |   |   |   |   |   |
| Energy purchases (a)                             |   |                             | 209 |   |   |   | 31 |   |   |   | 178 |   |
| Energy purchases from affiliate (a)              |   |                             | 64 |   |   |   | 411 |   |   |   | (347 | ) |
| Amortization of recoverable transition costs (a) |   |                             |   |   |   |   | 70 |   |   |   | (70 | ) |
| Expense adjustments (b)                          |   |                             |   |   |   |   |   |   |   |   |   |   |
| Gross receipts tax (c)                           |   |                             | 27 |   |   |   | 44 |   |   |   | (17 | ) |
| Act 129 (d)                                      |   |                             | 19 |   |   |   |   |   |   |   | 19 |   |
| Other                                            |   |                             | 4 |   |   |   | 6 |   |   |   | (2 | ) |
| Total expense adjustments                        |   |                             | 50 |   |   |   | 50 |   |   |   |   |   |
|                                             |   |                             | 323 |   |   |   | 562 |   |   |   | (239 | ) |
| Domestic gross delivery margins                  |   | $                                | 199 |   |   | $ | 185 |   |   | $ | 14 |   |

|                                             |   | Six Months Ended June 30, |
|--------------------------------------------------|--------|--------------------------------|
|                                             |   | 2010                           |   | 2009 |   | Change |
| Revenue                                          |   |                           |   |   |   |   |   |   |   |   |   |   |
| Retail electric (a)                              |   | $                              | 1,334 |   |   | $ | 1,617 |   |   | $ | (283 | ) |
| Wholesale electric to affiliate (a)              |   |                           | 1 |   |   |   | 40 |   |   |   | (39 | ) |
|                                             |   |                           | 1,335 |   |   |   | 1,657 |   |   |   | (322 | ) |
| Expense                                          |   |                           |   |   |   |   |   |   |   |   |   |   |
| Energy purchases (a)                             |   |                           | 619 |   |   |   | 63 |   |   |   | 556 |   |
| Energy purchases from affiliate (a)              |   |                           | 179 |   |   |   | 908 |   |   |   | (729 | ) |
| Amortization of recoverable transition costs (a) |   |                           |   |   |   |   | 154 |   |   |   | (154 | ) |
| Expense adjustments (b)                          |   |                           |   |   |   |   |   |   |   |   |   |   |
| Gross receipts tax (c)                           |   |                           | 72 |   |   |   | 95 |   |   |   | (23 | ) |
| Act 129 (d)                                      |   |                           | 37 |   |   |   |   |   |   |   | 37 |   |
| Other                                            |   |                           | 8 |   |   |   | 15 |   |   |   | (7 | ) |
| Total expense adjustments                        |   |                           | 117 |   |   |   | 110 |   |   |   | 7 |   |
|                                             |   |                           | 915 |   |   |   | 1,235 |   |   |   | (320 | ) |
| Domestic gross delivery margins                  |   | $                              | 420 |   |   | $ | 422 |   |   | $ | (2 | ) |

| (a) |   | As reported on the Statements of Income.                                                                                               |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | To include/exclude the impact of any revenues and expenses consistent with the way management reviews domestic gross delivery margins. |
| (c) |   | Included in "Taxes, other than income" on the Statements of Income.                                                                    |
| (d) |   | Included in "Other operation and maintenance" on the Statement of Income.                                                              |

|                            |   | Three Months Ended June 30, |
|---------------------------------|--------|----------------------------------|
|                            |   | 2010                             |   | 2009 |   | Change |
|                            |   |                             |   |   |   |   |   |   |   |   |   |   |
| Distribution                    |   | $                                | 157 |   |   | $ | 157 |   |   |   |   |   |
| Transmission                    |   |                             | 42 |   |   |   | 28 |   |   | $ | 14 |   |
| Domestic gross delivery margins |   | $                                | 199 |   |   | $ | 185 |   |   | $ | 14 |   |

|                            |   | Six Months Ended June 30, |
|---------------------------------|--------|--------------------------------|
|                            |   | 2010                           |   | 2009 |   | Change |
|                            |   |                           |   |   |   |   |   |   |   |   |   |   |
| Distribution                    |   | $                              | 336 |   |   | $ | 355 |   |   | $ | (19 | ) |
| Transmission                    |   |                           | 84 |   |   |   | 67 |   |   |   | 17 |   |
| Domestic gross delivery margins |   | $                              | 420 |   |   | $ | 422 |   |   | $ | (2 | ) |

|                              |   | June 30, 2010 vs. June 30, 2009 |
|-----------------------------------|--------|-------------------------------------------|
|                              |   | Three Months Ended                        |   | Six Months Ended |
|                              |   |                                      |   |   |   |   |   |   |
| Amortization of Act 129 costs (a) |   | $                                         | 19 |   |   | $ | 37 |   |
| Vegetation management costs       |   |                                      | 8 |   |   |   | 10 |   |
| Payroll-related costs             |   |                                      | 5 |   |   |   | 7 |   |
| Workforce reduction (Note 9)      |   |                                      |   |   |   |   | (9 | ) |
| Other                             |   |                                      | 1 |   |   |   | 2 |   |
|                              |   | $                                         | 33 |   |   | $ | 47 |   |

| (a) |   | Relates to costs associated with a PUC-approved energy efficiency and conservation plan.  These costs are recovered in customer rates and substantially match the revenue recorded, therefore have minimal impact on earnings.  See "Regulatory Issues - Pennsylvania Activities" in Note 10 to the Financial Statements for additional information on this plan.  These costs are included in "Domestic Gross Delivery Margins" above. |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   | June 30, 2010 vs. June 30, 2009 |
|------------------------------------|--------|-------------------------------------------|
|                               |   | Three Months Ended                        |   | Six Months Ended |
|                               |   |                                      |   |   |   |   |
| Higher (lower) pre-tax book income |   | $                                         | 2 |   |   | $ | (4 | ) |
| Other                              |   |                                      | (1 | ) |   |   | (1 | ) |
|                               |   | $                                         | 1 |   |   | $ | (5 | ) |

|                      |   | June 30, 2010 |   | December 31, 2009 |
|---------------------------|--------|--------------------|--------|-------------------|
|                      |   |               |   |              |   |   |   |   |
| Cash and cash equivalents |   | $                  | 262    |              |   | $ | 485 |   |

| · | $145 million of capital expenditures;                                             |
|--------|-----------------------------------------------------------------------------------|
| · | $54 million for the redemption of preferred stock;                                |
| · | the payment of $49 million of dividends on common stock and preferred securities; |
| · | $27 million used in operating activities; and                                     |
| · | $55 million of contributions from PPL.                                            |

|                                  |   | Committed Capacity |   | Borrowed |   | Letters of Credit Issued |   | Unused Capacity |
|---------------------------------------|--------|--------------------|--------|----------|--------|--------------------------|--------|-----------------|
|                                  |   |               |   |     |   |                     |   |            |   |   |   |   |   |   |   |   |
| 5-year Syndicated Credit Facility (a) |   | $                  | 190    |     |   |                     |   |            |   | $ | 13 |   |   | $ | 177 |   |
| Asset-backed Credit Facility (b)      |   |               | 150    |     |   |                     |   |            |   |   | n/a |   |   |   | 150 |   |
| Total PPL Electric Credit Facilities  |   | $                  | 340    |     |   |                     |   |            |   | $ | 13 |   |   | $ | 327 |   |

| (a) |   | In June 2010, PPL Electric closed into escrow a new $200 million syndicated credit facility, expiring December 31, 2014, that is intended to replace its existing 5-year Syndicated Credit Facility upon effectiveness.  Subject to certain conditions, the new credit facility will become effective on the earliest of (i) December 31, 2010, (ii) the date on which the acquisition of E.ON U.S. is completed by PPL, or (iii) the date on which the purchase and sale agreement relating to the acquisition of E.ON U.S. has been terminated or expired or such acquisition has otherwise been abandoned by PPL. The commitments under the existing credit facility are provided by a diverse bank group, with no one bank and its affiliates providing an aggregate commitment of more than 18% of the total committed capacity. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | At June 30, 2010, based on accounts receivable and unbilled revenue pledged, $150 million was available for borrowing.  In July 2010, PPL Electric and a subsidiary extended the expiration date of the credit agreement related to the asset-backed commercial paper program to July 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

| · | Revised the outlook for PPL Electric;                                           |
|--------|---------------------------------------------------------------------------------|
| · | Lowered the rating of PPL Electric's preferred securities;                      |
| · | Lowered the issuer rating of PPL Electric; and                                  |
| · | Affirmed the senior secured rating and commercial paper rating of PPL Electric. |

|                                     |   | Projected |   |
|------------------------------------------|--------|-----------|--------|
|                                     |   | 2010      |   | 2011 |   | 2012 |   |
| Construction expenditures (a) (b)        |   |      |   |   |   |   |   |   |   |   |
| Transmission and distribution facilities |   | $         | 355    |   | $ | 495 |   | $ | 528 |   |
| Other                                    |   |      | 48     |   |   | 38 |   |   | 39 |   |
| Total Capital Expenditures               |   | $         | 403    |   | $ | 533 |   | $ | 567 |   |

| (a) |   | Construction expenditures include AFUDC, which is expected to be approximately $34 million for the years 2010 through 2012. |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Includes expenditures for intangible assets.                                                                                |

----

| PPL Corporation |
|-----------------|
|            |   |   |
| (a)             |   | Evaluation of disclosure controls and procedures. |
|            |   |   |
|            |   | The registrant's principal executive officer and principal financial officer, based on their evaluation of the registrant's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) have concluded that, as of June 30, 2010, the registrant's disclosure controls and procedures are effective to ensure that material information relating to the registrant and its consolidated subsidiaries is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, particularly during the period for which this quarterly report has been prepared.  The aforementioned principal officers have concluded that the disclosure controls and procedures are also effective to ensure that information required to be disclosed in reports filed under the Exchange Act is accumulated and communicated to management, including the principal executive and principal financial officer, to allow for timely decisions regarding required disclosure. |
|            |   |   |
| (b)             |   | Change in internal controls over financial reporting. |
|            |   |   |
|            |   | The registrant's principal executive officer and principal financial officer have concluded that there were no changes in the registrant's internal control over financial reporting during the registrant's second fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |

| PPL Energy Supply, LLC and PPL Electric Utilities Corporation |
|---------------------------------------------------------------|
|                                                          |   |   |
| (a)                                                           |   | Evaluation of disclosure controls and procedures. |
|                                                          |   |   |
|                                                          |   | The registrants' principal executive officers and principal financial officers, based on their evaluation of the registrants' disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) have concluded that, as of June 30, 2010, the registrants' disclosure controls and procedures are effective to ensure that material information relating to the registrants and their consolidated subsidiaries is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, particularly during the period for which this quarterly report has been prepared.  The aforementioned principal officers have concluded that the disclosure controls and procedures are also effective to ensure that information required to be disclosed in reports filed under the Exchange Act is accumulated and communicated to management, including the principal executive and principal financial officers, to allow for timely decisions regarding required disclosure. |
|                                                          |   |   |
| (b)                                                           |   | Change in internal controls over financial reporting. |
|                                                          |   |   |
|                                                          |   | The registrants' principal executive officers and principal financial officers have concluded that there were no changes in the registrants' internal control over financial reporting during the registrants' second fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrants' internal control over financial reporting. |

| Item 1.  Legal Proceedings                                                                                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                       |
| For additional information regarding various pending administrative and judicial proceedings involving regulatory, environmental and other matters, which information is incorporated by reference into this Part II, see: |
|                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                     |   | "Item 3. Legal Proceedings" in PPL's, PPL Energy Supply's and PPL Electric's 2009 Form 10-K; and |
|                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                     |   | Note 10 of the Registrants' "Combined Notes to Condensed Consolidated Financial Statements" in Part I of this report. |

| Item 1A.  Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| PPL Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| The risk factors discussed below are related to PPL's pending acquisition of E.ON U.S., as described in Note 8 to the Financial Statements.  They should be read in conjunction with and update and supplement the risk factors disclosed in PPL's "Item 1A. Risk Factors" of the 2009 Form 10-K. We may be unable to obtain the approvals required to complete the Acquisition or may be subject to material restrictions or conditions.The governmental agencies that must approve the Acquisition may impose conditions on the completion, or require changes to the terms of the Acquisition, including restrictions on the business, operations or financial performance of the companies to be acquired.  These conditions or changes could also delay or impose additional costs on the Acquisition or limit the revenues of the acquired companies. If completed, the Acquisition may not achieve its intended results.PPL has entered into the Acquisition agreement with the expectation that the Acquisition will result in various benefits.  Achieving the anticipated benefits is subject to a number of uncertainties, including whether the business can be operated in the manner PPL intends and whether PPL's costs to finance the Acquisition will be consistent with our expectations.  Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues generated by the combined company and diversion of management's time and energy. We will be subject to business uncertainties while the Acquisition is pending.The preparation required to complete the Acquisition may place a significant burden on management and internal resources.  The additional demands on management and any difficulties encountered in completing the transaction and with the transition and integration process could affect our internal resources and financial results. The Acquisition will expose us to additional risks and uncertainties with respect to the acquired businesses and their operations. We expect that the Acquisition will rebalance our business mix to a greater percentage of regulated operations.  While we believe this should mitigate our exposure to downturns in the wholesale power markets, it will increase our coal-based generation portfolio and our dependence on rate-of-return regulation.  Although we are already exposed to risks relating to use of coal and rate-of-return regulation, the Acquisition will increase these risks.  The acquired businesses will generally be subject to similar risks that we are subject to in our existing businesses, particularly our supply and distribution segments (as the acquired businesses are integrated and both generate and deliver power).  In addition, they will be subject to the following additional risks: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Their profitability will depend largely on their ability to recover costs from customers and changes in circumstances or in the regulatory environment that may impair their ability to recover costs from customers or achieve a certain rate of return. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Rising energy prices could negatively impact these businesses.  Higher fuel costs could significantly impact results of operations, particularly if there is a reduction in customer demand or an increase in bad debt expense, which could also have a material impact on their results of operations. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Their natural gas distribution activities involve numerous risks that may result in accidents and other operating costs.  There are inherent in natural gas distribution activities a variety of hazards and operating risks, such as leaks, fires and mechanical problems, which could cause financial losses and exposure, significant damage to property, environmental pollution and impairment of operations. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Environmental costs and liabilities associated with aspects of the acquired businesses may differ from those of our existing business, including with respect to natural gas distribution and certain former operations, as well as with governmental and other third-party proceedings. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| We will be subject to business uncertainties while the Acquisition is pending.The preparation required to complete the Acquisition may place a significant burden on management and internal resources.  The additional demands on management and any difficulties encountered in completing the transaction and with the transition and integration process could affect our financial results. Failure to complete the acquisition could negatively affect PPL's stock price as well as our future business and financial results.If the Acquisition is not completed, PPL will be subject to a number of risks, including, but not limited to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | We may be required to pay E.ON US Investments, under specified circumstances set forth in the Purchase and Sale Agreement, a termination fee of $450 million. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | We must pay costs related to the Acquisition including, among others, legal, accounting, advisory, financing fees, filing and printing costs, whether the Acquisition is completed or not. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | We could be subject to litigation related to the failure to complete the acquisition or other factors, which may adversely affect our business, financial results and stock price. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| We will incur significant transaction and acquisition-related costs in connection with the financing of the Acquisition, and may be unable to complete alternative financing before closing.We expect to incur, until the closing of the Acquisition, significant non-recurring costs associated with the financing of the Acquisition, including obtaining and maintaining the committed bridge financing that assures our ability to pay the Acquisition purchase price.  In addition, we will be subject to numerous market risks in connection with our plan to raise alternative financing to fund the purchase price of the Acquisition prior to closing, including risks related to general economic conditions, changes in the marketplace of the costs of capital and of the demand for securities of the types we will seek to offer to raise the alternative financing.  In the event less than the entire Acquisition purchase price is available to us at the time of closing, we will be required to draw under the Bridge Facility in order to complete the Acquisition, and the costs to do so are likely to be significant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| PPL Energy Supply, LLC and PPL Electric Utilities Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| There have been no material changes to PPL Energy Supply's and PPL Electric's risk factors from those disclosed in "Item 1A. Risk Factors" of the 2009 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

| Item 6.  Exhibits                                                                                                                                                                   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                          |   |   |
| 3(ii)(a)                                                                                                                                                                                      | -      | Amended and Restated Bylaws of PPL Corporation effective as of May 19, 2010 (Exhibit 99.1 to PPL Corporation Form 8-K Report (File No. 1-11459) dated May 19, 2010) |
| 4(a)                                                                                                                                                                                          | -      | Supplemental Indenture No. 2 among PPL Capital Funding, Inc., PPL Corporation and The Bank of New York Mellon (as successor to The Bank of New York), as Trustee, dated as of June 28, 2010 (Exhibit 4.3 to PPL Corporation Form 8-K Report (File No. 1-11459) dated June 28, 2010) |
| 10(a)                                                                                                                                                                                         | -      | Amendment No. 5 to Directors Deferred Compensation Plan, dated May 28, 2010 |
| 10(b)                                                                                                                                                                                         | -      | $500 million Facility Agreement, dated as of May 14, 2010, among PPL Energy Supply, LLC, as Borrower, and Morgan Stanley Bank, as Issuer |
| 10(c)                                                                                                                                                                                         | -      | Purchase and Sale Agreement, dated as of April 28, 2010, by and between E.ON US Investments Corp., PPL Corporation and E.ON AG (Exhibit No. 99.1 to PPL Corporation Form 8-K Report (File No. 1-11459) dated April 28, 2010) |
| 10(d)                                                                                                                                                                                         | -      | Debt Commitment Letter, dated April 28, 2010, by and between PPL Corporation, Banc of America, N.A., Banc of America Securities LLC, Credit Suisse AG and Credit Suisse Securities (USA) LLC (Exhibit No. 99.2 to PPL Corporation Form 8-K Report (File No. 1-11459) dated April 28, 2010) |
| 10(e)                                                                                                                                                                                         | -      | $6,500,000,000 Senior Bridge Term Loan Credit Agreement, dated as of June 9, 2010, among PPL Capital Funding, Inc., Borrower, PPL, Guarantor, the lenders from time to time party thereto and Bank of America, N.A., Administrative Agent, Credit Suisse, A.G., Syndication Agent, Wells Fargo Bank, National Association, Documentation Agent, Banc of America Securities LLC, Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC, Joint Lead Arrangers (Exhibit 10.1 to PPL Corporation Form 8-K (File No. 1-11459) dated June 9, 2010) |
| 10(f)                                                                                                                                                                                         | -      | Notice of Commitment Reduction, issued on June 28, 2010, by PPL Capital Funding, Inc., pursuant to Section 2.07(c) of the $6,500,000,000 Senior Bridge Term Loan Credit Agreement, dated as of June 9, 2010 |
| 10(g)                                                                                                                                                                                         | -      | Amendment No. 2 to Credit and Security Agreement, dated as of July 27, 2010, by and among PPL Receivables Corporation, as Borrower, PPL Electric Utilities Corporation, as Servicer, Victory Receivables Corporation, as a Lender and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Liquidity Bank and as Agent |
| 12(a)                                                                                                                                                                                         | -      | PPL Corporation and Subsidiaries Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends |
| 12(b)                                                                                                                                                                                         | -      | PPL Energy Supply, LLC and Subsidiaries Computation of Ratio of Earnings to Fixed Charges |
| 12(c)                                                                                                                                                                                         | -      | PPL Electric Utilities Corporation and Subsidiaries Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends |
|                                                                                                                                                                                          |   |   |
| Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, for the quarterly period ended June 30, 2010, filed by the following officers for the following companies:     |   |
|                                                                                                                                                                                          |   |   |
| 31(a)                                                                                                                                                                                         | -      | James H. Miller for PPL Corporation |
| 31(b)                                                                                                                                                                                         | -      | Paul A. Farr for PPL Corporation |
| 31(c)                                                                                                                                                                                         | -      | James H. Miller for PPL Energy Supply, LLC |
| 31(d)                                                                                                                                                                                         | -      | Paul A. Farr for PPL Energy Supply, LLC |
| 31(e)                                                                                                                                                                                         | -      | David G. DeCampli for PPL Electric Utilities Corporation |
| 31(f)                                                                                                                                                                                         | -      | Vincent Sorgi for PPL Electric Utilities Corporation |
|                                                                                                                                                                                          |   |
| Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for the quarterly period ended June 30, 2010, furnished by the following officers for the following companies: |   |
|                                                                                                                                                                                          |   |   |
| 32(a)                                                                                                                                                                                         | -      | James H. Miller for PPL Corporation |
| 32(b)                                                                                                                                                                                         | -      | Paul A. Farr for PPL Corporation |
| 32(c)                                                                                                                                                                                         | -      | James H. Miller for PPL Energy Supply, LLC |
| 32(d)                                                                                                                                                                                         | -      | Paul A. Farr for PPL Energy Supply, LLC |
| 32(e)                                                                                                                                                                                         | -      | David G. DeCampli for PPL Electric Utilities Corporation |
| 32(f)                                                                                                                                                                                         | -      | Vincent Sorgi for PPL Electric Utilities Corporation |

----

|                            | PPL Corporation                    |
|---------------------------------|------------------------------------|
|                            | (Registrant)                       |   |
|                            |                               |   |
|                            | PPL Energy Supply, LLC             |
|                            | (Registrant)                       |   |
|                            |                               |   |
|                            | PPL Electric Utilities Corporation |
|                            | (Registrant)                       |   |
|                            |                               |   |
|                            |                               |   |
|                            |                               |   |
| Date:  August 5, 2010 | /s/  Vincent Sorgi       |   |
|                            | Vincent Sorgi                      |   |
|                            | Vice President and Controller      |   |
|                            | (Chief Accounting Officer)         |   |