**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        D.C. 20549**

**Form        10-Q**

| [X]                        | QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 for the quarterly period ended June                  30, 2005             |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       | 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                                                       |
|   |                                   |                                                                                                                                                                                                                                                        |                                                             |
|   | 333-74794                              | **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                   X               | No                          |
|--------|-----------------------------------------------------|-----------------------------------------------------------|----------------------------------------------------------------|
|   | PPL                  Energy Supply, LLC             | Yes                         | No                   X                     |
|   | PPL                  Electric Utilities Corporation | Yes                         | No                   X                     |

|   | PPL                  Corporation                    | Common                  stock, $.01 par value, 190,044,618 shares outstanding at July 29,                  2005, excluding 31,056,521 shares held as treasury                  stock                                                           |
|--------|-----------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                |                                                                                                                                                                                                                                                |
|   | 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, 78,029,863 shares outstanding and all held                  by PPL                  Corporation at July 29, 2005, excluding 79,270,519 shares held                  as treasury                  stock |
|   |                                                |                                                                                                                                                                                                                                                |

**This        document is available free of charge at the Investor Center on PPL's Web        site at        www.pplweb.com. However, information on this Web site does not constitute        a part        of this Form 10-Q.**

----

**PPL        CORPORATION**

**PPL        ENERGY SUPPLY, LLC**

**PPL        ELECTRIC UTILITIES CORPORATION**

|                                                                                                                                                                                     | 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                  Statement                  of Income | 2 |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed Consolidated                  Statement of Cash Flows | 3 |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed                  Consolidated Balance                  Sheet | 4 |
|                                                                                                                                                                                     |                                                                                                                                             | **PPL                  Energy Supply, LLC and Subsidiaries** |   |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed Consolidated                  Statement of Income | 6 |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed                  Consolidated                  Statement of Cash Flows | 7 |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed                  Consolidated                  Balance Sheet | 8 |
|                                                                                                                                                                                     |                                                                                                                                             | **PPL                  Electric Utilities Corporation and Subsidiaries** |   |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed                  Consolidated                  Statement of Income | 10 |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed                  Consolidated                  Statement                  of Cash Flows | 11 |
|                                                                                                                                                                                     |                                                                                                                                             |   | Condensed Consolidated                  Balance Sheet | 12 |
|                                                                                                                                                                                     |                                                                                                                                             | Combined                  Notes to                  Condensed                  Consolidated                  Financial Statements | 14 |
|                                                                                                                                                                                     |                                                                                                                                             |   |   |   |
|                                                                                                                                                                                     | Item                  2. Management's Discussion and Analysis of Financial Condition                  and Results                  of Operations |   |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Corporation                  and                  Subsidiaries | 41 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Energy Supply,                  LLC                  and Subsidiaries | 55 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Electric Utilities                  Corporation                  and                  Subsidiaries | 67 |
|                                                                                                                                                                                     |                                                                                                                                             |   |   |   |
|                                                                                                                                                                                     | Item                  3. Quantitative                  and Qualitative Disclosures                  About Market Risk             | 71 |
|                                                                                                                                                                                     |                                                                                                                                             |   |   |   |
|                                                                                                                                                                                     | Item                  4. Controls                  and                  Procedures                                                               | 71 |
|                                                                                                                                                                                     |                                                                                                                                             |
| PART                  II. OTHER INFORMATION                                                                                                                                              |                                                                                                                                             |
|                                                                                                                                                                                     | Item                  1. Legal                  Proceedings                                                                                      | 71 |
|                                                                                                                                                                                     | Item                  4. Submission of Matters                  to                  a                  Vote of Security Holders             | 71 |
|                                                                                                                                                                                     | Item                  6.                  Exhibits                                                                                               | 72 |
|                                                                                                                                                                                     |                                                                                                                                             |   |   |   |
| SIGNATURES                                                                                                                                                                               | 73                                                                                                                                               |
|                                                                                                                                                                                     |                                                                                                                                             |   |   |
| COMPUTATION                  OF RATIO OF EARNINGS TO FIXED CHARGES                                                                                                                       |                                                                                                                                             |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Corporation                  and                  Subsidiaries | 74 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Energy Supply, LLC and Subsidiaries | 75 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Electric                  Utilities Corporation and Subsidiaries | 76 |
|                                                                                                                                                                                     |                                                                                                                                             |
| CERTIFICATES                  OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER                  PURSUANT TO                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 |                                                                                                                                             |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Corporation | 77 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Energy Supply,                  LLC | 79 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Electric                  Utilities                  Corporation | 81 |
|                                                                                                                                                                                     |                                                                                                                                             |
| CERTIFICATES                  OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER                  PURSUANT TO                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 |                                                                                                                                             |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Corporation | 83 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Energy Supply,                  LLC | 85 |
|                                                                                                                                                                                     |                                                                                                                                             |   | PPL                  Electric                  Utilities                  Corporation | 87 |

----

**GLOSSARY        OF TERMS AND ABBREVIATIONS**

**£**        -        British pounds sterling.

***2001        Senior Secured Bond Indenture***

***2004        Form 10-K***

***AFUDC***

***ANEEL***

***APA***

***ARO***

***Bcf***

***CEMAR***

***CGE***
** **
** **

***Clean        Air Act***

***CTC***

***Customer        Choice Act***
*** ***

***DEP***

***Derivative***

| a.   | It                  has (1) one or more underlyings and (2) one or more notional amounts                  or                  payment provisions or both. Those terms determine the amount of                  the                  settlement or settlements, and, in some cases, whether or not a                  settlement                  is required. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | It                  requires no initial net investment or an initial net investment                  that is                  smaller than would be required for other types of contracts that                  would be                  expected to have a similar response to changes in market                  factors. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Its                  terms require or permit net settlement, it can readily be settled                  net by a                  means outside the contract, or it provides for delivery of an asset                  that                  puts the recipient in a position not substantially different from                  net                  settlement. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***DIG***
*** ***

***EITF***

***EMF***

***EPA***

***EPS***

***FASB***
** **

***FERC***

***FIN***

***Fitch***

***FSP***

***GAAP***

***GWh***

***Hyder***

***IRS***
*** ***

***ISO***

***ITC***

***LIBOR***
** **
** **

***Montana        Power***

***Moody's***

***MW***

***MWh***

***NorthWestern***

***NPDES***

***NRC***

***NUGs***
* *

***Ofgem***

***PCB***

***PEPS        Units***

***PEPS        Units, Series B***
** **

***PJM***
*** ***

***PLR***

***PP&E***
*** ***

***PPL***
*** ***

***PPL        Capital Funding***

***PPL        Capital Funding Trust I***

***PPL        Development Company***

***PPL        Electric***
*** ***

***PPL        Energy Funding***

***PPL        EnergyPlus***

***PPL        Energy Supply***

***PPL        Gas Utilities***

***PPL        Generation***

***PPL        Global***

***PPL        Maine***

***PPL        Martins Creek***

***PPL        Montana***

***PPL        Montour***

***PPL        Services***

***PPL        Susquehanna***

***PPL        Telcom***

***PPL        Transition Bond Company***

***Preferred        Securities***

***PUC***
*** ***

***PURPA***
*** ***

***PURTA***

***Regulation        S-X***

***RTO***

***SCR***

***SEC***

***SFAS***

***SIUK        Capital Trust I***

***S&P***

***Superfund***

***Synfuel        projects***

***Tolling        agreement***
*** ***

***WPD***

***WPD        LLP***

***WPD***
***(South        Wales)***

***WPD***
***(South        West)***

***WPDH        Limited***

***WPDL***

----

**FORWARD-LOOKING        INFORMATION**

| ·   | market                  demand and prices for energy, capacity and                  fuel; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | market                  prices for crude oil and the potential impact on synthetic fuel                  tax                  credits; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | weather                  conditions affecting customer energy usage and operating costs; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | competition                  in retail and wholesale power markets; |
|--------------------|---------------------------------------------------------------------|

| ·   | the                  effect of any business or industry restructuring; |
|--------------------|------------------------------------------------------------------------|

| ·   | the                  profitability and liquidity of PPL and its subsidiaries; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | new                  accounting requirements or new interpretations or applications                  of existing                  requirements; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | operation                  and availability of existing generation facilities and operating                  costs; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | transmission                  and distribution system conditions and operating costs; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | current                  and future environmental conditions and requirements and the related                  costs                  of compliance, including environmental capital expenditures and                  emission                  allowance and other expenses; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | development                  of new projects, markets and technologies; |
|--------------------|-------------------------------------------------------------------------|

| ·   | performance                  of new ventures; |
|--------------------|-----------------------------------------------|

| ·   | asset                  acquisitions and dispositions; |
|--------------------|-------------------------------------------------------|

| ·   | political,                  regulatory or economic conditions in states, regions or countries                  where                  PPL or its subsidiaries conduct business, including potential effects                  of                  threatened or actual terrorism or war or other hostilities; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | impact                  of state, federal or foreign investigations applicable to PPL and                  its                  subsidiaries and the energy                  industry; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | capital                  market conditions, including changes in interest rates, and decisions                  regarding capital structure; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | stock                  price performance; |
|--------------------|-------------------------------------------|

| ·   | the                  market prices of equity securities and the impact on pension income                  and                  resultant cash funding requirements for defined benefit pension                  plans; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | securities                  and credit ratings; |
|--------------------|-------------------------------------------------|

| ·   | foreign                  exchange rates; |
|--------------------|------------------------------------------|

| ·   | the                  outcome of litigation against PPL and its subsidiaries;                  and |
|--------------------|---------------------------------------------------------------------------------------------------|

| ·   | the                  commitments and liabilities of PPL and its                  subsidiaries. |
|--------------------|------------------------------------------------------------------------------------------------|

----

| **Part                  I. FINANCIAL INFORMATION**                                                                                                                                            |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Item                  1. Financial Statements**                                                                                                                                             |
|                                                                                                                                                                                          |
| **CONDENSED                  CONSOLIDATED STATEMENT OF INCOME**                                                                                                                               |
| **PPL                  Corporation and Subsidiaries**                                                                                                                                         |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars, except per share data)*                                                                                                                               |
|                                                                                                                                                                                          |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | **2005** |   |   | **2004** |   |   | **2005** |   |   | **2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Revenues**                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Utility |   | **$** | **1,010** |   |   | $ | 908 |   |   | **$** | **2,161** |   |   | $ | 1,993 |   |
|                                                                                                                                                                                          | Unregulated                  retail electric |   |   | **23** |   |   |   | 29 |   |   |   | **48** |   |   |   | 60 |   |
|                                                                                                                                                                                          | Wholesale                  energy marketing |   |   | **276** |   |   |   | 290 |   |   |   | **544** |   |   |   | 567 |   |
|                                                                                                                                                                                          | Net                  energy trading margins |   |   | **(1** | **)** |   |   | 6 |   |   |   | **15** |   |   |   | 12 |   |
|                                                                                                                                                                                          | Energy                  related businesses |   |   | **168** |   |   |   | 128 |   |   |   | **308** |   |   |   | 248 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Total |   |   | **1,476** |   |   |   | 1,361 |   |   |   | **3,076** |   |   |   | 2,880 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Expenses**                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Operation |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Fuel |   |   | **169** |   |   |   | 181 |   |   |   | **413** |   |   |   | 386 |   |
|                                                                                                                                                                                          |   | Energy                  purchases |   |   | **242** |   |   |   | 208 |   |   |   | **509** |   |   |   | 475 |   |
|                                                                                                                                                                                          |   | Other                  operation and maintenance |   |   | **331** |   |   |   | 318 |   |   |   | **695** |   |   |   | 632 |   |
|                                                                                                                                                                                          |   | Amortization                  of recoverable transition costs |   |   | **59** |   |   |   | 57 |   |   |   | **128** |   |   |   | 128 |   |
|                                                                                                                                                                                          | Depreciation |   |   | **105** |   |   |   | 100 |   |   |   | **208** |   |   |   | 197 |   |
|                                                                                                                                                                                          | Taxes,                  other than income |   |   | **69** |   |   |   | 63 |   |   |   | **141** |   |   |   | 119 |   |
|                                                                                                                                                                                          | Energy                  related businesses |   |   | **170** |   |   |   | 132 |   |   |   | **316** |   |   |   | 269 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Total |   |   | **1,145** |   |   |   | 1,059 |   |   |   | **2,410** |   |   |   | 2,206 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Income**                                                                                                                                                         |   |   | **331** |   |   |   | 302 |   |   |   | **666** |   |   |   | 674 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  Income - net                                                                                                                                                           |   |   | **11** |   |   |   | 18 |   |   |   | **18** |   |   |   | 27 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                                                                                                                                                             |   |   | **125** |   |   |   | 133 |   |   |   | **260** |   |   |   | 254 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  from Continuing Operations Before Income Taxes,****   Minority                  Interest and Dividends on Preferred Stock**                          |   |   | **217** |   |   |   | 187 |   |   |   | **424** |   |   |   | 447 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                                                                                                                                                                 |   |   | **38** |   |   |   | 30 |   |   |   | **72** |   |   |   | 105 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Minority                  Interest                                                                                                                                                            |   |   | **2** |   |   |   | 2 |   |   |   | **4** |   |   |   | 4 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                  on Preferred Stock                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   | **1** |   |   |   | 1 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  from Continuing Operations**                                                                                                                                        |   |   | **177** |   |   |   | 155 |   |   |   | **347** |   |   |   | 337 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations (net of income taxes)                                                                                                                      |   |   | **49** |   |   |   | 7 |   |   |   | **51** |   |   |   | 12 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  Income**                                                                                                                                                               |   | **$** | **128** |   |   | $ | 148 |   |   | **$** | **296** |   |   | $ | 325 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Earnings                  Per Share of Common Stock:**                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Income                  from Continuing Operations: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Basic |   | **$** | **0.93** |   |   | $ | 0.85 |   |   | **$** | **1.83** |   |   | $ | 1.87 |   |
|                                                                                                                                                                                          |   | Diluted |   |   | **0.92** |   |   |   | 0.85 |   |   |   | **1.81** |   |   |   | 1.86 |   |
|                                                                                                                                                                                          | Net                  income: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Basic |   | **$** | **0.67** |   |   | $ | 0.81 |   |   | **$** | **1.56** |   |   | $ | 1.80 |   |
|                                                                                                                                                                                          |   | Diluted |   |   | **0.67** |   |   |   | 0.81 |   |   |   | **1.55** |   |   |   | 1.80 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Dividends                  Declared per Share of Common Stock**                                                                                                                             |   | **$** | **0.46** |   |   | $ | 0.41 |   |   | **$** | **0.92** |   |   | $ | 0.82 |   |
|                                                                                                                                                                                          |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED STATEMENT OF CASH FLOWS**                                                                                                                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Corporation and Subsidiaries**                                                                                                                                         |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **Six                  Months Ended****June                  30,** |   |
|                                                                                                                                                                                          |   |   |   |
|                                                                                                                                                                                          |   | **2005** |   |   | **2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Net                  Cash Provided by Operating Activities**                                                                                                                                |   | **$** | **614** |   |   | $ | 629 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Investing Activities**                                                                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Expenditures                  for property, plant and equipment |   |   | **(359** | **)** |   |   | (345 | ) |
|                                                                                                                                                                                          | Investment                  in generating assets and electric energy projects |   |   |   |   |   |   | (30 | ) |
|                                                                                                                                                                                          | Proceeds                  from the sale of the Sundance plant |   |   | **190** |   |   |   |   |   |
|                                                                                                                                                                                          | Proceeds                  from the sale of minority interest in CGE |   |   |   |   |   |   | 123 |   |
|                                                                                                                                                                                          | Purchases                  of auction rate securities |   |   |   |   |   |   | (59 | ) |
|                                                                                                                                                                                          | Proceeds                  from the sale of auction rate securities |   |   | **66** |   |   |   | 69 |   |
|                                                                                                                                                                                          | Net                  increase in restricted cash |   |   | **(49** | **)** |   |   | (12 | ) |
|                                                                                                                                                                                          | Other                  investing activities |   |   | **(11** | **)** |   |   | (4 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Net                  cash used in investing activities |   |   | **(163** | **)** |   |   | (258 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Cash                  Flows from Financing Activities**                                                                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Issuance                  of common stock |   |   | **33** |   |   |   | 589 |   |
|                                                                                                                                                                                          | Issuance                  of long-term debt |   |   | **224** |   |   |   | 15 |   |
|                                                                                                                                                                                          | Retirement                  of long-term debt |   |   | **(907** | **)** |   |   | (938 | ) |
|                                                                                                                                                                                          | Payment                  of common dividends |   |   | **(165** | **)** |   |   | (141 | ) |
|                                                                                                                                                                                          | Payment                  of preferred dividends |   |   | **(1** | **)** |   |   | (1 | ) |
|                                                                                                                                                                                          | Net                  increase in short-term debt |   |   | **128** |   |   |   | 4 |   |
|                                                                                                                                                                                          | Other                  financing activities |   |   | **(16** | **)** |   |   | (7 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Net                  cash used in financing activities |   |   | **(704** | **)** |   |   | (479 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Effect                  of Exchange Rates on Cash and Cash Equivalents**                                                                                                                    |   |   | **3** |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Net                  Decrease in Cash and Cash Equivalents**                                                                                                                                |   |   | **(250** | **)** |   |   | (108 | ) |
| Cash                  and Cash Equivalents at Beginning of Period                                                                                                                             |   |   | **616** |   |   |   | 466 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| Cash                  and Cash Equivalents at End of Period                                                                                                                                   |   | **$** | **366** |   |   | $ | 358 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED BALANCE SHEET**                                                                                                                                     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Corporation and Subsidiaries**                                                                                                                                         |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Assets**                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Current                  Assets**                                                                                                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Cash                  and cash equivalents |   | **$** | **366** |   |   | $ | 616 |   |
|                                                                                                                                                                                          | Restricted                  cash |   |   | **115** |   |   |   | 50 |   |
|                                                                                                                                                                                          | Accounts                  receivable (less reserve: 2005, $89; 2004, $88) |   |   | **540** |   |   |   | 459 |   |
|                                                                                                                                                                                          | Unbilled                  revenues |   |   | **377** |   |   |   | 407 |   |
|                                                                                                                                                                                          | Fuel,                  materials and supplies |   |   | **296** |   |   |   | 309 |   |
|                                                                                                                                                                                          | Prepayments |   |   | **114** |   |   |   | 56 |   |
|                                                                                                                                                                                          | Deferred                  income taxes |   |   | **251** |   |   |   | 162 |   |
|                                                                                                                                                                                          | Price                  risk management assets |   |   | **251** |   |   |   | 115 |   |
|                                                                                                                                                                                          | Other |   |   | **72** |   |   |   | 130 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **2,382** |   |   |   | 2,304 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Investments**                                                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Investment                  in unconsolidated affiliates - at equity |   |   | **55** |   |   |   | 51 |   |
|                                                                                                                                                                                          | Nuclear                  plant decommissioning trust fund |   |   | **419** |   |   |   | 409 |   |
|                                                                                                                                                                                          | Other |   |   | **11** |   |   |   | 12 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **485** |   |   |   | 472 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Property,                  Plant and Equipment - net**                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Electric                  plant in service |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Transmission                  and distribution |   |   | **5,865** |   |   |   | 5,927 |   |
|                                                                                                                                                                                          |   | Generation |   |   | **3,763** |   |   |   | 4,007 |   |
|                                                                                                                                                                                          |   | General |   |   | **446** |   |   |   | 480 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   | **10,074** |   |   |   | 10,414 |   |
|                                                                                                                                                                                          | Construction                  work in progress |   |   | **203** |   |   |   | 148 |   |
|                                                                                                                                                                                          | Nuclear                  fuel |   |   | **145** |   |   |   | 153 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Electric                  plant |   |   | **10,422** |   |   |   | 10,715 |   |
|                                                                                                                                                                                          | Gas                  and oil plant |   |   | **215** |   |   |   | 213 |   |
|                                                                                                                                                                                          | Other                  property |   |   | **211** |   |   |   | 221 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **10,848** |   |   |   | 11,149 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Regulatory                  and Other Noncurrent Assets**                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Recoverable                  transition costs |   |   | **1,305** |   |   |   | 1,431 |   |
|                                                                                                                                                                                          | Goodwill |   |   | **1,089** |   |   |   | 1,127 |   |
|                                                                                                                                                                                          | Other                  acquired intangibles |   |   | **362** |   |   |   | 336 |   |
|                                                                                                                                                                                          | Other |   |   | **956** |   |   |   | 942 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **3,712** |   |   |   | 3,836 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   | **$** | **17,427** |   |   | $ | 17,761 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED BALANCE SHEET**                                                                                                                                     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Corporation and Subsidiaries**                                                                                                                                         |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Liabilities                  and Equity**                                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Current                  Liabilities**                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Short-term                  debt |   | **$** | **162** |   |   | $ | 42 |   |
|                                                                                                                                                                                          | Long-term                  debt |   |   | **901** |   |   |   | 866 |   |
|                                                                                                                                                                                          | Accounts                  payable |   |   | **434** |   |   |   | 407 |   |
|                                                                                                                                                                                          | Above                  market NUG contracts |   |   | **71** |   |   |   | 73 |   |
|                                                                                                                                                                                          | Taxes |   |   | **182** |   |   |   | 164 |   |
|                                                                                                                                                                                          | Interest |   |   | **112** |   |   |   | 129 |   |
|                                                                                                                                                                                          | Dividends |   |   | **89** |   |   |   | 79 |   |
|                                                                                                                                                                                          | Price                  risk management liabilities |   |   | **250** |   |   |   | 167 |   |
|                                                                                                                                                                                          | Other |   |   | **448** |   |   |   | 368 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **2,649** |   |   |   | 2,295 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Long-term                  Debt**                                                                                                                                                           |   |   | **6,062** |   |   |   | 6,792 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Long-term                  Debt with Affiliate Trust**                                                                                                                                      |   |   | **89** |   |   |   | 89 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Deferred                  Credits and Other Noncurrent Liabilities**                                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Deferred                  income taxes and investment tax credits |   |   | **2,396** |   |   |   | 2,426 |   |
|                                                                                                                                                                                          | Accrued                  pension obligations |   |   | **441** |   |   |   | 476 |   |
|                                                                                                                                                                                          | Asset                  retirement obligations |   |   | **270** |   |   |   | 257 |   |
|                                                                                                                                                                                          | Above                  market NUG contracts |   |   | **171** |   |   |   | 206 |   |
|                                                                                                                                                                                          | Other |   |   | **937** |   |   |   | 874 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **4,215** |   |   |   | 4,239 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| **Commitments                  and Contingent Liabilities**                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Minority                  Interest**                                                                                                                                                        |   |   | **54** |   |   |   | 56 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Preferred                  Stock without Sinking Fund Requirements**                                                                                                                        |   |   | **51** |   |   |   | 51 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Shareowners'                  Common Equity**                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Common                  stock |   |   | **2** |   |   |   | 2 |   |
|                                                                                                                                                                                          | Capital                  in excess of par value |   |   | **3,619** |   |   |   | 3,577 |   |
|                                                                                                                                                                                          | Treasury                  stock |   |   | **(838** | **)** |   |   | (838 | ) |
|                                                                                                                                                                                          | Earnings                  reinvested |   |   | **1,991** |   |   |   | 1,870 |   |
|                                                                                                                                                                                          | Accumulated                  other comprehensive loss |   |   | **(442** | **)** |   |   | (323 | ) |
|                                                                                                                                                                                          | Capital                  stock expense and other |   |   | **(25** | **)** |   |   | (49 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **4,307** |   |   |   | 4,239 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   | **$** | **17,427** |   |   | $ | 17,761 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED STATEMENT OF INCOME**                                                                                                                               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Energy Supply, LLC and Subsidiaries**                                                                                                                                  |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | **2005** |   |   | **2004** |   |   | **2005** |   |   | **2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Revenues**                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Wholesale                  energy marketing |   | **$** | **276** |   |   | $ | 290 |   |   | **$** | **544** |   |   | $ | 567 |   |
|                                                                                                                                                                                          | Wholesale                  energy marketing to affiliate |   |   | **364** |   |   |   | 346 |   |   |   | **779** |   |   |   | 756 |   |
|                                                                                                                                                                                          | Utility |   |   | **284** |   |   |   | 255 |   |   |   | **577** |   |   |   | 534 |   |
|                                                                                                                                                                                          | Unregulated                  retail electric |   |   | **23** |   |   |   | 29 |   |   |   | **48** |   |   |   | 60 |   |
|                                                                                                                                                                                          | Net                  energy trading margins |   |   | **(1** | **)** |   |   | 6 |   |   |   | **15** |   |   |   | 12 |   |
|                                                                                                                                                                                          | Energy                  related businesses |   |   | **161** |   |   |   | 123 |   |   |   | **295** |   |   |   | 238 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Total |   |   | **1,107** |   |   |   | 1,049 |   |   |   | **2,258** |   |   |   | 2,167 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Expenses**                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Operation |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Fuel |   |   | **146** |   |   |   | 163 |   |   |   | **338** |   |   |   | 322 |   |
|                                                                                                                                                                                          |   | Energy                  purchases |   |   | **195** |   |   |   | 154 |   |   |   | **371** |   |   |   | 366 |   |
|                                                                                                                                                                                          |   | Energy                  purchases from affiliate |   |   | **32** |   |   |   | 39 |   |   |   | **70** |   |   |   | 76 |   |
|                                                                                                                                                                                          |   | Other                  operation and maintenance |   |   | **243** |   |   |   | 230 |   |   |   | **504** |   |   |   | 464 |   |
|                                                                                                                                                                                          | Depreciation |   |   | **73** |   |   |   | 70 |   |   |   | **144** |   |   |   | 138 |   |
|                                                                                                                                                                                          | Taxes,                  other than income |   |   | **26** |   |   |   | 23 |   |   |   | **50** |   |   |   | 48 |   |
|                                                                                                                                                                                          | Energy                  related businesses |   |   | **163** |   |   |   | 124 |   |   |   | **301** |   |   |   | 255 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Total |   |   | **878** |   |   |   | 803 |   |   |   | **1,778** |   |   |   | 1,669 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Income**                                                                                                                                                         |   |   | **229** |   |   |   | 246 |   |   |   | **480** |   |   |   | 498 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  Income - net                                                                                                                                                           |   |   | **11** |   |   |   | 28 |   |   |   | **19** |   |   |   | 37 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                                                                                                                                                             |   |   | **65** |   |   |   | 67 |   |   |   | **130** |   |   |   | 117 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense with Affiliates                                                                                                                                             |   |   | **6** |   |   |   | 4 |   |   |   | **13** |   |   |   | 7 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  from Continuing Operations Before****Income****Taxes and   Minority Interest**                                                                            |   |   | **169** |   |   |   | 203 |   |   |   | **356** |   |   |   | 411 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                                                                                                                                                                 |   |   | **14** |   |   |   | 37 |   |   |   | **42** |   |   |   | 92 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Minority                  Interest                                                                                                                                                            |   |   | **2** |   |   |   | 2 |   |   |   | **4** |   |   |   | 4 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  from Continuing Operations**                                                                                                                                        |   |   | **153** |   |   |   | 164 |   |   |   | **310** |   |   |   | 315 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations (net of income taxes)                                                                                                                      |   |   | **49** |   |   |   | 7 |   |   |   | **51** |   |   |   | 12 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  Income**                                                                                                                                                               |   | **$** | **104** |   |   | $ | 157 |   |   | **$** | **259** |   |   | $ | 303 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED STATEMENT OF CASH FLOWS**                                                                                                                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Energy Supply, LLC and Subsidiaries**                                                                                                                                  |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **Six                  Months Ended****June                  30,** |   |
|                                                                                                                                                                                          |   |   |   |
|                                                                                                                                                                                          |   | **2005** |   |   | **2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Net                  Cash Provided by Operating Activities**                                                                                                                                |   | **$** | **374** |   |   | $ | 438 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Cash                  Flows from Investing Activities**                                                                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Expenditures                  for property, plant and equipment |   |   | **(258** | **)** |   |   | (234 | ) |
|                                                                                                                                                                                          | Investment                  in generating assets and electric energy projects |   |   |   |   |   |   | (30 | ) |
|                                                                                                                                                                                          | Proceeds                  from the sale of the Sundance plant |   |   | **190** |   |   |   |   |   |
|                                                                                                                                                                                          | Proceeds                  from the sale of minority interest in CGE |   |   |   |   |   |   | 123 |   |
|                                                                                                                                                                                          | Purchases                  of auction rate securities |   |   |   |   |   |   | (9 | ) |
|                                                                                                                                                                                          | Proceeds                  from the sale of auction rate securities |   |   | **51** |   |   |   | 14 |   |
|                                                                                                                                                                                          | Net                  (increase) decrease in restricted cash |   |   | **12** |   |   |   | (18 | ) |
|                                                                                                                                                                                          | Other                  investing activities |   |   | **(15** | **)** |   |   | (5 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Net                  cash used in investing activities |   |   | **(20** | **)** |   |   | (159 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Cash                  Flows from Financing Activities**                                                                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Issuance                  of long-term debt |   |   |   |   |   |   | 15 |   |
|                                                                                                                                                                                          | Retirement                  of long-term debt |   |   | **(208** | **)** |   |   | (663 | ) |
|                                                                                                                                                                                          | Distributions                  to Member |   |   | **(119** | **)** |   |   | (124 | ) |
|                                                                                                                                                                                          | Contributions                  from Member |   |   |   |   |   |   | 58 |   |
|                                                                                                                                                                                          | Net                  increase (decrease) in short-term debt |   |   | **83** |   |   |   | (61 | ) |
|                                                                                                                                                                                          | Net                  increase (decrease) in note payable to affiliate |   |   | **(300** | **)** |   |   | 495 |   |
|                                                                                                                                                                                          | Other                  financing activities |   |   | **(3** | **)** |   |   | 1 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Net                  cash used in financing activities |   |   | **(547** | **)** |   |   | (279 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Effect                  of Exchange Rates on Cash and Cash Equivalents**                                                                                                                    |   |   | **3** |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Net                  Decrease in Cash and Cash Equivalents**                                                                                                                                |   |   | **(190** | **)** |   |   |   |   |
| Cash                  and Cash Equivalents at Beginning of Period                                                                                                                             |   |   | **357** |   |   |   | 222 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| Cash                  and Cash Equivalents at End of Period                                                                                                                                   |   | **$** | **167** |   |   | $ | 222 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED****CONSOLIDATED                  BALANCE SHEET**                                                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Energy Supply, LLC and Subsidiaries**                                                                                                                                  |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Assets**                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Current                  Assets**                                                                                                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Cash                  and cash equivalents |   | **$** | **167** |   |   | $ | 357 |   |
|                                                                                                                                                                                          | Restricted                  cash |   |   | **5** |   |   |   | 3 |   |
|                                                                                                                                                                                          | Accounts                  receivable (less reserve: 2005, $65; 2004, $68) |   |   | **313** |   |   |   | 259 |   |
|                                                                                                                                                                                          | Unbilled                  revenues |   |   | **234** |   |   |   | 250 |   |
|                                                                                                                                                                                          | Accounts                  receivable from affiliates |   |   | **141** |   |   |   | 152 |   |
|                                                                                                                                                                                          | Collateral                  on PLR energy supply to affiliate |   |   | **300** |   |   |   | 300 |   |
|                                                                                                                                                                                          | Fuel,                  materials and supplies |   |   | **253** |   |   |   | 256 |   |
|                                                                                                                                                                                          | Prepayments |   |   | **33** |   |   |   | 42 |   |
|                                                                                                                                                                                          | Deferred                  income taxes |   |   | **191** |   |   |   | 128 |   |
|                                                                                                                                                                                          | Price                  risk management assets |   |   | **250** |   |   |   | 113 |   |
|                                                                                                                                                                                          | Other |   |   | **57** |   |   |   | 97 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **1,944** |   |   |   | 1,957 |   |
| **Investments**                                                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Investment                  in unconsolidated affiliates - at equity |   |   | **55** |   |   |   | 51 |   |
|                                                                                                                                                                                          | Nuclear                  plant decommissioning trust fund |   |   | **419** |   |   |   | 409 |   |
|                                                                                                                                                                                          | Other |   |   | **5** |   |   |   | 5 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   | **479** |   |   |   | 465 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Property,                  Plant and Equipment - net**                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Electric                  plant in service |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Transmission                  and distribution |   |   | **3,436** |   |   |   | 3,523 |   |
|                                                                                                                                                                                          |   | Generation |   |   | **3,763** |   |   |   | 4,007 |   |
|                                                                                                                                                                                          |   | General |   |   | **225** |   |   |   | 254 |   |
|                                                                                                                                                                                          |   |   |   |   | **7,424** |   |   |   | 7,784 |   |
|                                                                                                                                                                                          | Construction                  work in progress |   |   | **156** |   |   |   | 115 |   |
|                                                                                                                                                                                          | Nuclear                  fuel |   |   | **145** |   |   |   | 153 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Electric                  plant |   |   | **7,725** |   |   |   | 8,052 |   |
|                                                                                                                                                                                          | Gas                  and oil plant |   |   | **20** |   |   |   | 21 |   |
|                                                                                                                                                                                          | Other                  property |   |   | **146** |   |   |   | 156 |   |
|                                                                                                                                                                                          |   |   |   | **7,891** |   |   |   | 8,229 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Other                  Noncurrent Assets**                                                                                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Goodwill |   |   | **1,033** |   |   |   | 1,072 |   |
|                                                                                                                                                                                          | Other                  acquired intangibles |   |   | **232** |   |   |   | 202 |   |
|                                                                                                                                                                                          | Other |   |   | **570** |   |   |   | 559 |   |
|                                                                                                                                                                                          |   |   |   | **1,835** |   |   |   | 1,833 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   | **$** | **12,149** |   |   | $ | 12,484 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED****CONSOLIDATED                  BALANCE SHEET**                                                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Energy Supply, LLC and Subsidiaries**                                                                                                                                  |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Liabilities                  and Equity**                                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Current                  Liabilities**                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Short-term                  debt |   | **$** | **75** |   |   |   |   |   |
|                                                                                                                                                                                          | Long-term                  debt |   |   | **5** |   |   | $ | 181 |   |
|                                                                                                                                                                                          | Accounts                  payable |   |   | **362** |   |   |   | 338 |   |
|                                                                                                                                                                                          | Accounts                  payable to affiliates |   |   | **32** |   |   |   | 52 |   |
|                                                                                                                                                                                          | Above                  market NUG contracts |   |   | **71** |   |   |   | 73 |   |
|                                                                                                                                                                                          | Taxes |   |   | **70** |   |   |   | 101 |   |
|                                                                                                                                                                                          | Interest |   |   | **77** |   |   |   | 87 |   |
|                                                                                                                                                                                          | Deferred                  revenue on PLR energy supply to affiliate |   |   | **12** |   |   |   | 12 |   |
|                                                                                                                                                                                          | Price                  risk management liabilities |   |   | **246** |   |   |   | 163 |   |
|                                                                                                                                                                                          | Other |   |   | **294** |   |   |   | 262 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **1,244** |   |   |   | 1,269 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| **Long-term                  Debt**                                                                                                                                                           |   |   | **3,652** |   |   |   | 3,694 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| **Note                  Payable to Affiliate**                                                                                                                                                |   |   | **195** |   |   |   | 495 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| **Long-term                  Debt with Affiliate Trust**                                                                                                                                      |   |   | **89** |   |   |   | 89 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Deferred                  Credits and Other Noncurrent Liabilities**                                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Deferred                  income taxes and investment tax credits |   |   | **1,283** |   |   |   | 1,261 |   |
|                                                                                                                                                                                          | Accrued                  pension obligations |   |   | **295** |   |   |   | 341 |   |
|                                                                                                                                                                                          | Asset                  retirement obligations |   |   | **270** |   |   |   | 257 |   |
|                                                                                                                                                                                          | Above                  market NUG contracts |   |   | **171** |   |   |   | 206 |   |
|                                                                                                                                                                                          | Deferred                  revenue on PLR energy supply to affiliate |   |   | **40** |   |   |   | 46 |   |
|                                                                                                                                                                                          | Other |   |   | **783** |   |   |   | 720 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **2,842** |   |   |   | 2,831 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Commitments                  and Contingent Liabilities**                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Minority                  Interest**                                                                                                                                                        |   |   | **54** |   |   |   | 56 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Member's                  Equity**                                                                                                                                                          |   |   | **4,073** |   |   |   | 4,050 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | **$** | **12,149** |   |   | $ | 12,484 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED STATEMENT OF INCOME**                                                                                                                               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Electric Utilities Corporation and                  Subsidiaries**                                                                                                     |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | **2005** |   |   | **2004** |   |   | **2005** |   |   | **2004** |   |
| **Operating                  Revenues**                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Retail                  electric |   | **$** | **691** |   |   | $ | 622 |   |   | **$** | **1,471** |   |   | $ | 1,354 |   |
|                                                                                                                                                                                          | Wholesale                  electric |   |   | **1** |   |   |   |   |   |   |   | **2** |   |   |   | 4 |   |
|                                                                                                                                                                                          | Wholesale                  electric to affiliate |   |   | **32** |   |   |   | 39 |   |   |   | **70** |   |   |   | 76 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Total |   |   | **724** |   |   |   | 661 |   |   |   | **1,543** |   |   |   | 1,434 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Expenses**                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Operation |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Energy                  purchases |   |   | **47** |   |   |   | 55 |   |   |   | **138** |   |   |   | 110 |   |
|                                                                                                                                                                                          |   | Energy                  purchases from affiliate |   |   | **364** |   |   |   | 346 |   |   |   | **779** |   |   |   | 756 |   |
|                                                                                                                                                                                          |   | Other                  operation and maintenance |   |   | **85** |   |   |   | 87 |   |   |   | **186** |   |   |   | 165 |   |
|                                                                                                                                                                                          |   | Amortization                  of recoverable transition costs |   |   | **59** |   |   |   | 57 |   |   |   | **128** |   |   |   | 128 |   |
|                                                                                                                                                                                          | Depreciation |   |   | **27** |   |   |   | 27 |   |   |   | **55** |   |   |   | 53 |   |
|                                                                                                                                                                                          | Taxes,                  other than income |   |   | **43** |   |   |   | 38 |   |   |   | **90** |   |   |   | 69 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Total |   |   | **625** |   |   |   | 610 |   |   |   | **1,376** |   |   |   | 1,281 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Income**                                                                                                                                                         |   |   | **99** |   |   |   | 51 |   |   |   | **167** |   |   |   | 153 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  Income - net                                                                                                                                                           |   |   | **6** |   |   |   |   |   |   |   | **10** |   |   |   | 1 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                                                                                                                                                             |   |   | **42** |   |   |   | 47 |   |   |   | **93** |   |   |   | 96 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense with Affiliate                                                                                                                                              |   |   | **3** |   |   |   |   |   |   |   | **5** |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  Before Income Taxes**                                                                                                                                               |   |   | **60** |   |   |   | 4 |   |   |   | **79** |   |   |   | 58 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                                                                                                                                                                 |   |   | **24** |   |   |   | 1 |   |   |   | **27** |   |   |   | 21 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  Before Dividends on Preferred Stock**                                                                                                                               |   |   | **36** |   |   |   | 3 |   |   |   | **52** |   |   |   | 37 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                  on Preferred Stock                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   | **1** |   |   |   | 1 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  Available to PPL Corporation**                                                                                                                                      |   | **$** | **36** |   |   | $ | 3 |   |   | **$** | **51** |   |   | $ | 36 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED STATEMENT OF CASH FLOWS**                                                                                                                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Electric Utilities Corporation and                  Subsidiaries**                                                                                                     |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **Six                  Months Ended****June                  30,** |   |
|                                                                                                                                                                                          |   |   |   |
|                                                                                                                                                                                          |   | **2005** |   |   | **2004** |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Net                  Cash Provided by Operating Activities**                                                                                                                                |   | **$** | **174** |   |   | $ | 185 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Cash                  Flows from Investing Activities**                                                                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Expenditures                  for property, plant and equipment |   |   | **(85** | **)** |   |   | (98 | ) |
|                                                                                                                                                                                          | Purchases                  of auction rate securities |   |   |   |   |   |   | (50 | ) |
|                                                                                                                                                                                          | Proceeds                  from the sale of auction rate securities |   |   | **10** |   |   |   | 50 |   |
|                                                                                                                                                                                          | Net                  (increase) decrease in restricted cash |   |   | **(53** | **)** |   |   | 6 |   |
|                                                                                                                                                                                          | Other                  investing activities |   |   | **2** |   |   |   | 1 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Net                  cash used in investing activities |   |   | **(126** | **)** |   |   | (91 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Cash                  Flows from Financing Activities**                                                                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Issuance                  of long-term debt |   |   | **224** |   |   |   |   |   |
|                                                                                                                                                                                          | Retirement                  of long-term debt |   |   | **(380** | **)** |   |   | (271 | ) |
|                                                                                                                                                                                          | Payment                  of preferred dividends |   |   | **(1** | **)** |   |   | (1 | ) |
|                                                                                                                                                                                          | Payment                  of common dividends to PPL Corporation |   |   | **(26** | **)** |   |   | (2 | ) |
|                                                                                                                                                                                          | Net                  increase in short-term debt |   |   | **45** |   |   |   | 65 |   |
|                                                                                                                                                                                          | Other                  financing activities |   |   | **(6** | **)** |   |   | (8 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Net                  cash used in financing activities |   |   | **(144** | **)** |   |   | (217 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Net                  Decrease in Cash and Cash Equivalents**                                                                                                                                |   |   | **(96** | **)** |   |   | (123 | ) |
| Cash                  and Cash Equivalents at Beginning of Period                                                                                                                             |   |   | **151** |   |   |   | 162 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| Cash                  and Cash Equivalents at End of Period                                                                                                                                   |   | **$** | **55** |   |   | $ | 39 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED BALANCE SHEET**                                                                                                                                     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Electric Utilities Corporation and                  Subsidiaries**                                                                                                     |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
| **Assets**                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Current                  Assets**                                                                                                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Cash                  and cash equivalents |   | **$** | **55** |   |   | $ | 151 |   |
|                                                                                                                                                                                          | Restricted                  cash |   |   | **97** |   |   |   | 42 |   |
|                                                                                                                                                                                          | Accounts                  receivable (less reserve: 2005, $22; 2004, $18) |   |   | **203** |   |   |   | 179 |   |
|                                                                                                                                                                                          | Unbilled                  revenues |   |   | **141** |   |   |   | 148 |   |
|                                                                                                                                                                                          | Accounts                  receivable from affiliates |   |   | **11** |   |   |   | 17 |   |
|                                                                                                                                                                                          | Note                  receivable from affiliate |   |   | **300** |   |   |   | 300 |   |
|                                                                                                                                                                                          | Prepayments |   |   | **72** |   |   |   | 6 |   |
|                                                                                                                                                                                          | Prepayment                  on PLR energy supply from affiliate |   |   | **12** |   |   |   | 12 |   |
|                                                                                                                                                                                          | Other |   |   | **80** |   |   |   | 66 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **971** |   |   |   | 921 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Property,                  Plant and Equipment - net**                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Electric                  plant in service |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Transmission                  and distribution |   |   | **2,428** |   |   |   | 2,404 |   |
|                                                                                                                                                                                          |   | General |   |   | **217** |   |   |   | 220 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   | **2,645** |   |   |   | 2,624 |   |
|                                                                                                                                                                                          | Construction                  work in progress |   |   | **38** |   |   |   | 29 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   | Electric                  plant |   |   | **2,683** |   |   |   | 2,653 |   |
|                                                                                                                                                                                          | Other                  property |   |   | **4** |   |   |   | 4 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **2,687** |   |   |   | 2,657 |   |
| **Regulatory                  and Other Noncurrent Assets**                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Recoverable                  transition costs |   |   | **1,305** |   |   |   | 1,431 |   |
|                                                                                                                                                                                          | Intangibles |   |   | **115** |   |   |   | 117 |   |
|                                                                                                                                                                                          | Prepayment                  on PLR energy supply from affiliate |   |   | **40** |   |   |   | 46 |   |
|                                                                                                                                                                                          | Other |   |   | **358** |   |   |   | 354 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **1,818** |   |   |   | 1,948 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   | **$** | **5,476** |   |   | $ | 5,526 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

| **CONDENSED                  CONSOLIDATED BALANCE SHEET**                                                                                                                                     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **PPL                  Electric Utilities Corporation and                  Subsidiaries**                                                                                                     |
| (Unaudited)                                                                                                                                                                                   |
| *(Millions                  of Dollars)*                                                                                                                                                      |
|                                                                                                                                                                                          |   | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
| **Liabilities                  and Equity**                                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Current                  Liabilities**                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Short-term                  debt |   | **$** | **87** |   |   | $ | 42 |   |
|                                                                                                                                                                                          | Long-term                  debt |   |   | **477** |   |   |   | 336 |   |
|                                                                                                                                                                                          | Accounts                  payable |   |   | **41** |   |   |   | 39 |   |
|                                                                                                                                                                                          | Accounts                  payable to affiliates |   |   | **131** |   |   |   | 168 |   |
|                                                                                                                                                                                          | Taxes |   |   | **66** |   |   |   | 46 |   |
|                                                                                                                                                                                          | Collateral                  on PLR energy supply from affiliate |   |   | **300** |   |   |   | 300 |   |
|                                                                                                                                                                                          | Other |   |   | **138** |   |   |   | 98 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **1,240** |   |   |   | 1,029 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Long-term                  Debt**                                                                                                                                                           |   |   | **1,913** |   |   |   | 2,208 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| **Deferred                  Credits and Other Noncurrent Liabilities**                                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Deferred                  income taxes and investment tax credits |   |   | **784** |   |   |   | 776 |   |
|                                                                                                                                                                                          | Other |   |   | **190** |   |   |   | 190 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **974** |   |   |   | 966 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Commitments                  and Contingent Liabilities**                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Preferred                  Stock without Sinking Fund Requirements**                                                                                                                        |   |   | **51** |   |   |   | 51 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| **Shareowner's                  Common Equity**                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                          | Common                  stock |   |   | **1,476** |   |   |   | 1,476 |   |
|                                                                                                                                                                                          | Additional                  paid-in capital |   |   | **361** |   |   |   | 361 |   |
|                                                                                                                                                                                          | Treasury                  stock |   |   | **(912** | **)** |   |   | (912 | ) |
|                                                                                                                                                                                          | Earnings                  reinvested |   |   | **380** |   |   |   | 354 |   |
|                                                                                                                                                                                          | Capital                  stock expense and other |   |   | **(7** | **)** |   |   | (7 | ) |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   |   | **1,298** |   |   |   | 1,272 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                          |   |   | **$** | **5,476** |   |   | $ | 5,526 |   |
|                                                                                                                                                                                          |   |   |   |   |   |   |
| *The                  accompanying Notes to Condensed Consolidated Financial Statements                  are an                  integral part of the financial                  statements.* |

----

**Combined        Notes to Condensed Consolidated Financial        Statements**

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

*(PPL,        PPL Energy Supply and PPL Electric)*

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

**Depreciation**
* *
*(PPL        and PPL Energy Supply)*

**Goodwill**
* *
*(PPL        and PPL Energy Supply)*

**Stock-Based        Compensation **
*(PPL,        PPL Energy Supply and PPL Electric)*

*(PPL)*

*(PPL        Energy Supply)*

*(PPL        Electric)*

**New        Accounting Standards**
*(PPL,        PPL Energy Supply and PPL Electric)*

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

*(PPL        and PPL Energy Supply)*

|                                              |                                        | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|---------------------------------------------------|---------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                              |                                        |                                                                 |   |   |                                                               |   |
| **PPL**                                           |                                        | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Income                  Statement Data**        |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                  from external customers |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Supply                                      |                                                                 | $      | 447    |                                                               |   | $ | 436 |   |   | $ | 878 |   |   | $ | 853 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | International                  Delivery     |                                                                 |   | 303    |                                                               |   |   | 272 |   |   |   | 614 |   |   |   | 568 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Pennsylvania                  Delivery      |                                                                 |   | 726    |                                                               |   |   | 653 |   |   |   | 1,584 |   |   |   | 1,459 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   | 1,476  |                                                               |   |   | 1,361 |   |   |   | 3,076 |   |   |   | 2,880 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment                  revenues            |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Supply                                      |                                                                 |   | 363    |                                                               |   |   | 346 |   |   |   | 779 |   |   |   | 756 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Pennsylvania                  Delivery      |                                                                 |   | 34     |                                                               |   |   | 39 |   |   |   | 72 |   |   |   | 78 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                       |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Supply                  (a)                 |                                                                 |   | 40     |                                                               |   |   | 80 |   |   |   | 126 |   |   |   | 169 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | International                  Delivery (b) |                                                                 |   | 54     |                                                               |   |   | 66 |   |   |   | 116 |   |   |   | 114 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Pennsylvania                  Delivery      |                                                                 |   | 34     |                                                               |   |   | 2 |   |   |   | 54 |   |   |   | 42 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 | $      | 128    |                                                               |   | $ | 148 |   |   | $ | 296 |   |   | $ | 325 |   |

| **PPL**                                 |                                    | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
|-----------------------------------------|-----------------------------------------|---------------------------------------|--------|--------|-------------------------------------------|--------|
|                                    |                                    |                                  |   |   |                                      |   |
| **Balance                  Sheet Data** |                                    |                                  |   |   |                                      |   |   |   |
|                                    |                                    |                                  |   |   |                                      |   |   |   |
| Total                  assets           |                                    |                                  |   |   |                                      |   |   |   |
|                                    |                                    |                                  |   |   |                                      |   |   |   |   |
|                                    | Supply                                  |                                  | $      | 6,626  |                                      |   | $ | 6,673 |   |
|                                    |                                    |                                  |   |   |                                      |   |   |   |   |
|                                    | International                  Delivery |                                  |   | 5,140  |                                      |   |   | 5,390 |   |
|                                    |                                    |                                  |   |   |                                      |   |   |   |   |
|                                    | Pennsylvania                  Delivery  |                                  |   | 5,661  |                                      |   |   | 5,698 |   |
|                                    |                                    |                                  |   |   |                                      |   |   |
|                                    |                                    | $                                     | 17,427 |   |                                      | $      | 17,761 |   |
|                                    |                                    |                                  |   |   |                                      |   |

|                                              |                                        | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|---------------------------------------------------|---------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                              |                                        |                                                                 |   |   |                                                               |   |
| **PPL                  Energy Supply**            |                                        | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Income                  Statement Data**        |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                  from external customers |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Supply                                      |                                                                 | $      | 804    |                                                               |   | $ | 777 |   |   | $ | 1,644 |   |   | $ | 1,599 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | International                  Delivery     |                                                                 |   | 303    |                                                               |   |   | 272 |   |   |   | 614 |   |   |   | 568 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   | 1,107  |                                                               |   |   | 1,049 |   |   |   | 2,258 |   |   |   | 2,167 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                       |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | Supply                  (a)                 |                                                                 |   | 50     |                                                               |   |   | 91 |   |   |   | 143 |   |   |   | 189 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              | International                  Delivery (b) |                                                                 |   | 54     |                                                               |   |   | 66 |   |   |   | 116 |   |   |   | 114 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                              |                                        | $                                                                    | 104    |   |                                                               | $      | 157 |   |   | $ | 259 |   |   | $ | 303 |   |
|                                              |                                        |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |

| **PPL                  Energy Supply**  |                                    | **June                  30,****2005** |   |   | **December                  31,****2004** |   |
|-----------------------------------------|-----------------------------------------|---------------------------------------|--------|--------|-------------------------------------------|--------|
|                                    |                                    |                                  |   |   |                                      |   |
| **Balance                  Sheet Data** |                                    |                                  |   |   |                                      |   |   |   |
|                                    |                                    |                                  |   |   |                                      |   |   |   |
| Total                  assets           |                                    |                                  |   |   |                                      |   |   |   |
|                                    |                                    |                                  |   |   |                                      |   |   |   |   |
|                                    | Supply                                  |                                  | $      | 7,009  |                                      |   | $ | 7,094 |   |
|                                    |                                    |                                  |   |   |                                      |   |   |   |   |
|                                    | International                  Delivery |                                  |   | 5,140  |                                      |   |   | 5,390 |   |
|                                    |                                    |                                  |   |   |                                      |   |   |
|                                    |                                    | $                                     | 12,149 |   |                                      | $      | 12,484 |   |
|                                    |                                    |                                  |   |   |                                      |   |   |

| (a) |   | 2005                  includes the loss on the sale and operating results of the Sundance                  plant                  that are recorded in "Loss from Discontinued Operations." See Note                  8 for                  additional information.                                                                                 |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | 2004                  includes the operating results of a Latin American telecommunications                  company, as well as an insignificant write-down of its net assets,                  that                  are recorded in "Loss from Discontinued Operations." See Note 8                  for                  additional information. |

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

*(PPL)*

| · | stock                  options, restricted stock and restricted stock units granted under                  the                  incentive compensation plans; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | stock                  units representing common stock granted under the directors compensation                  programs;                                    |
| · | common                  stock purchase contracts that were a component of the PEPS Units                  and PEPS                  Units, Series B; and      |
| · | convertible                  senior notes.                                                                                                                    |

|                                               |                                                                     | **Three                  Months Ended****June                  30,** |    |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------|--------------------------------------------------------------------------|----------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------|--------|
|                                               |                                                                     |                                                                 |    |   |                                                               |   |
|                                               |                                                                     | **2005**                                                             |    |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| **Income                  (Numerator)**            |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations |                                                                     | $                                                                    | 177     |   |                                                               | $      | 155 |   |   | $ | 347 |   |   | $ | 337 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Loss                  from discontinued operations (net of income taxes) |                                                                 |    | 49     |                                                               |   |   | 7 |   |   |   | 51 |   |   |   | 12 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| Net                  Income                        |                                                                     | $                                                                    | 128     |   |                                                               | $      | 148 |   |   | $ | 296 |   |   | $ | 325 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Shares                  (Denominator)**          |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Shares                  for Basic EPS              |                                                                     |                                                                 | 189,626 |   |                                                               |   | 182,962 |   |   |   | 189,317 |   |   |   | 180,437 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Add                  incremental shares:           |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Convertible                  Senior Notes                                |                                                                 |    | 911    |                                                               |   |   |   |   |   |   | 748 |   |   |   |   |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Stock                  options and other share-based awards              |                                                                 |    | 1,140  |                                                               |   |   | 562 |   |   |   | 1,085 |   |   |   | 585 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| Shares                  for Diluted EPS            |                                                                     |                                                                 | 191,677 |   |                                                               |   | 183,524 |   |   |   | 191,150 |   |   |   | 181,022 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Basic                  EPS**                     |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations |                                                                     | $                                                                    | 0.93    |   |                                                               | $      | 0.85 |   |   | $ | 1.83 |   |   | $ | 1.87 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Loss                  from discontinued operations (net of income taxes) |                                                                 |    | 0.26   |                                                               |   |   | 0.04 |   |   |   | 0.27 |   |   |   | 0.07 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| Net                  Income                        |                                                                     | $                                                                    | 0.67    |   |                                                               | $      | 0.81 |   |   | $ | 1.56 |   |   | $ | 1.80 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                  EPS**                   |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations |                                                                     | $                                                                    | 0.92    |   |                                                               | $      | 0.85 |   |   | $ | 1.81 |   |   | $ | 1.86 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Loss                  from discontinued operations (net of income taxes) |                                                                 |    | 0.25   |                                                               |   |   | 0.04 |   |   |   | 0.26 |   |   |   | 0.06 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| Net                  Income                        |                                                                     | $                                                                    | 0.67    |   |                                                               | $      | 0.81 |   |   | $ | 1.55 |   |   | $ | 1.80 |   |
|                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |

|                                          |   | **Three                    Months Ended****June                    30,** |   |   |   | **Six                    Months Ended****June                    30,** |   |
|-----------------------------------------------|--------|--------------------------------------------------------------------------|--------|--------|--------|------------------------------------------------------------------------|--------|
|                                          |   |                                                                     |   |   |   |                                                                   |   |
| *(Thousands                    of Shares)*    |   | **2005**                                                                 |   |   |   | **2004**                                                               |   |   |   | **2005** |   |   |   | **2004** |   |
|                                          |   |                                                                     |   |   |   |                                                                   |   |   |   |   |   |   |   |   |   |
| Antidilutive                    stock options |   |                                                                     |   |   |   | 1,153                                                                  |   |   |   | 402 |   |   |   | 1,526 |   |
|                                          |   |                                                                     |   |   |   |                                                                   |   |   |   |   |   |   |   |   |   |

See          Note          17 for a discussion of PPL's 2-for-1 stock split to be completed in August          2005.

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

*(PPL,        PPL Energy Supply and PPL Electric)*

|                                                                          |                                                                                                                                                                                                                                                       | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|-------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |
| **PPL**                                                                       |                                                                                                                                                                                                                                                       | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Reconciliation                  of****Income                  Tax Expense** |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Indicated                  federal income tax on Income from Continuing Operations Before                  Income                  Taxes, Minority Interest and Dividends on Preferred Stock at statutory                  tax                  rate - 35% |                                                                 | $      | 76     |                                                               |   | $ | 65 |   |   | $ | 148 |   |   | $ | 156 |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| Increase                  (decrease) due to:                                  |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | State                  income taxes                                                                                                                                                                                                                        |                                                                 |   | 3      |                                                               |   |   | (3 | ) |   |   | 2 |   |   |   | 2 |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Amortization                  of investment tax credit                                                                                                                                                                                                     |                                                                 |   | (2     | )                                                                  |   |   | (2 | ) |   |   | (5 | ) |   |   | (5 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Difference                  related to income recognition of foreign affiliates (net of foreign                  income                  taxes)                                                                                                            |                                                                 |   | (10    | )                                                                  |   |   | (15 | ) |   |   | (20 | ) |   |   | (18 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Federal                  income tax credits                                                                                                                                                                                                                |                                                                 |   | (30    | )                                                                  |   |   | (15 | ) |   |   | (54 | ) |   |   | (29 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Other                                                                                                                                                                                                                                                      |                                                                 |   | 1      |                                                               |   |   |   |   |   |   | 1 |   |   |   | (1 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   | (38    | )                                                                  |   |   | (35 | ) |   |   | (76 | ) |   |   | (51 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Total                  income tax expense**                                 |                                                                                                                                                                                                                                                       | $                                                                    | 38     |   |                                                               | $      | 30 |   |   | $ | 72 |   |   | $ | 105 |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Effective                  income tax rate**                                |                                                                                                                                                                                                                                                       |                                                                 | 17.5%  |   |                                                               |   | 16.0% |   |   |   | 17.0% |   |   |   | 23.5% |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **PPL                  Energy Supply**                                        |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Reconciliation                  of****Income                  Tax Expense** |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Indicated                  federal income tax on Income from Continuing Operations Before                  Income                  Taxes and Minority Interest at statutory tax rate - 35%                                                                 |                                                                 | $      | 59     |                                                               |   | $ | 71 |   |   | $ | 125 |   |   | $ | 144 |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| Decrease                  due to:                                             |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | State                  income taxes                                                                                                                                                                                                                        |                                                                 |   | (3     | )                                                                  |   |   | (1 | ) |   |   | (4 | ) |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Amortization                  of investment tax credit                                                                                                                                                                                                     |                                                                 |   | (2     | )                                                                  |   |   | (2 | ) |   |   | (4 | ) |   |   | (4 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Difference                  related to income recognition of foreign affiliates (net of foreign                  income                  taxes)                                                                                                            |                                                                 |   | (10    | )                                                                  |   |   | (15 | ) |   |   | (20 | ) |   |   | (18 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Federal                  income tax credits                                                                                                                                                                                                                |                                                                 |   | (30    | )                                                                  |   |   | (15 | ) |   |   | (54 | ) |   |   | (29 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Other                                                                                                                                                                                                                                                      |                                                                 |   |   |                                                               |   |   | (1 | ) |   |   | (1 | ) |   |   | (1 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   | (45    | )                                                                  |   |   | (34 | ) |   |   | (83 | ) |   |   | (52 | ) |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Total                  income tax expense**                                 |                                                                                                                                                                                                                                                       | $                                                                    | 14     |   |                                                               | $      | 37 |   |   | $ | 42 |   |   | $ | 92 |   |
|                                                                          |                                                                                                                                                                                                                                                       |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Effective                  income tax rate**                                |                                                                                                                                                                                                                                                       |                                                                 | 8.3%   |   |                                                               |   | 18.2% |   |   |   | 11.8% |   |   |   | 22.4% |   |

|                                                                          |                                                                                                                                      | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|-------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |
| **PPL                  Electric**                                             |                                                                                                                                      | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Reconciliation                  of****Income                  Tax Expense** |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Indicated                  federal income tax on Income Before Income Taxes at statutory tax                  rate -                  35% |                                                                 | $      | 21     |                                                               |   | $ | 1 |   |   | $ | 28 |   |   | $ | 20 |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| Increase                  (decrease) due to:                                  |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | State                  income taxes                                                                                                       |                                                                 |   |   |                                                               |   |   | (1 | ) |   |   |   |   |   |   | 2 |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Amortization                  of investment tax credit                                                                                    |                                                                 |   |   |                                                               |   |   |   |   |   |   | (1 | ) |   |   | (1 | ) |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Change                  in tax reserves                                                                                                   |                                                                 |   | 1      |                                                               |   |   |   |   |   |   | (1 | ) |   |   |   |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          | Other                                                                                                                                     |                                                                 |   | 2      |                                                               |   |   | 1 |   |   |   | 1 |   |   |   |   |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                                                          |                                                                                                                                      |                                                                 |   | 3      |                                                               |   |   |   |   |   |   | (1 | ) |   |   | 1 |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Total                  income tax expense**                                 |                                                                                                                                      | $                                                                    | 24     |   |                                                               | $      | 1 |   |   | $ | 27 |   |   | $ | 21 |   |
|                                                                          |                                                                                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Effective                  income tax rate**                                |                                                                                                                                      |                                                                 | 40.0%  |   |                                                               |   | 25.0% |   |   |   | 34.2% |   |   |   | 36.2% |   |

*(PPL        and PPL Energy Supply)*

| **6.  ** | **Comprehensive                  Income** |
|--------------------|-------------------------------------------|

*(PPL        and PPL Energy Supply)*

|                                                | **Three                  Months Ended****June                  30,**     |   |   | **Six                  Months Ended****June                  30,** |   |
|-----------------------------------------------------|--------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                |                                                                     |   |   |                                                               |   |
|                                                | **2005**                                                                 |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
| **PPL**                                             |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                         | $                                                                        | 128    |   |                                                               | $      | 148 |   |   | $ | 296 |   |   | $ | 325 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income (loss): |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Foreign                  currency translation adjustments                |   | (55    | )                                                                  |   |   | (29 | ) |   |   | (39 | ) |   |   | 50 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Sale                  of CEMAR - currency translation adjustment         |   |   |                                                               |   |   | (4 | ) |   |   |   |   |   |   | (4 | ) |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Sale                  of CGE - currency translation adjustment           |   |   |                                                               |   |   |   |   |   |   |   |   |   |   | 10 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Unrealized                  gain (loss) on available-for-sale securities |   | 5      |                                                               |   |   | (1 | ) |   |   |   |   |   |   | (4 | ) |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Unrealized                  gain (loss) on qualifying derivatives        |   | (14    | )                                                                  |   |   | 7 |   |   |   | (80 | ) |   |   | (29 | ) |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Total                  other comprehensive income (loss)                 |   | (64    | )                                                                  |   |   | (27 | ) |   |   | (119 | ) |   |   | 23 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
| Comprehensive                  Income               | $                                                                        | 64     |   |                                                               | $      | 121 |   |   | $ | 177 |   |   | $ | 348 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **PPL                  Energy Supply**              |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                         | $                                                                        | 104    |   |                                                               | $      | 157 |   |   | $ | 259 |   |   | $ | 303 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income (loss): |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Foreign                  currency translation adjustments                |   | (55    | )                                                                  |   |   | (29 | ) |   |   | (39 | ) |   |   | 50 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Sale                  of CEMAR - currency translation adjustment         |   |   |                                                               |   |   | (4 | ) |   |   |   |   |   |   | (4 | ) |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Sale                  of CGE - currency translation adjustment           |   |   |                                                               |   |   |   |   |   |   |   |   |   |   | 10 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Unrealized                  gain (loss) on available-for-sale securities |   | 4      |                                                               |   |   | (1 | ) |   |   | (1 | ) |   |   | (4 | ) |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Unrealized                  loss on qualifying derivatives               |   | (13    | )                                                                  |   |   | (4 | ) |   |   | (79 | ) |   |   | (37 | ) |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                | Total                  other comprehensive income (loss)                 |   | (64    | )                                                                  |   |   | (38 | ) |   |   | (119 | ) |   |   | 15 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
| Comprehensive                  Income               | $                                                                        | 40     |   |                                                               | $      | 119 |   |   | $ | 140 |   |   | $ | 318 |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |
|                                                |                                                                     |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |

*(PPL        Electric)*

| **7.  ** | **Credit                  Arrangements and Financing                  Activities** |
|--------------------|------------------------------------------------------------------------------------|

**Credit        Arrangements**

*(PPL,        PPL Energy Supply and PPL Electric)*

*(PPL        and PPL Energy Supply)*

*(PPL,        PPL Energy Supply and PPL Electric)*

**Financing        Activities**

*(PPL)*

*(PPL        and PPL Energy Supply)*

*(PPL        and PPL Electric)*

**Dividends        **
*(PPL)*

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

**Domestic        Generation Projects **
*(PPL        and PPL Energy Supply)*

**International        Energy Projects**
*(PPL        and PPL Energy Supply)*

**Discontinued        Operations **
*(PPL        and PPL Energy Supply)*

**Other        **
*(PPL)*

| **9.  ** | **Commitments                  and Contingent Liabilities** |
|--------------------|-------------------------------------------------------------|

**Energy        Purchases, Energy Sales and Other Commitments**

*(PPL,        PPL Energy Supply and PPL Electric)*

*Liability        for Above Market NUG Contracts*
*** ***

*(PPL        and PPL Energy Supply)*

** **
*(PPL        and PPL Energy Supply)*

**Legal        Matters**

*(PPL,        PPL Energy Supply and PPL Electric)*

** **
*(PPL        and PPL Energy Supply)*

** **
*(PPL        and PPL Energy Supply)*

*(PPL        and PPL Energy Supply)*

**Regulatory        Issues**

*(PPL        and PPL Energy Supply)*

** **
*(PPL,        PPL Energy Supply and PPL Electric)*

*(PPL        and PPL Energy Supply)*

*(PPL,        PPL Energy Supply and PPL Electric)*

*(PPL        and PPL Energy Supply)*

*(PPL,        PPL Energy Supply and PPL Electric)*

| ·   | enacting                    standard transmission tariffs and uniform market mechanisms, |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | monitoring                    and mitigating "market power," |
|--------------------|--------------------------------------------------------------|

| ·   | managing                    transmission congestion through pricing and tradable financial                    rights, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | requiring                    independent operational control over transmission                    facilities, |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | forming                    state advisory committees on regional transmission organizations                    and                    resource adequacy, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | exercising                    FERC jurisdiction over all transmission                    service. |
|--------------------|---------------------------------------------------------------------------------------------------|

*PPL        and PPL Energy Supply)*

*(PPL        and PPL Energy Supply)*

** **

*(PPL,        PPL Energy Supply and PPL Electric)*

| ·   | The                  Public Utility Holding Company Act of 1935, or PUHCA, will be repealed                  effective six months after the 2005 Energy Act is enacted. PUHCA                  significantly restricted mergers and acquisitions in the electric                  utility                  sector. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  FERC will appoint and oversee an electric reliability organization                  to                  establish and enforce mandatory reliability rules regarding the                  interstate                  electric transmission system. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  FERC will establish incentives for transmission companies, such                  as                  performance-based rates, recovery of the costs to comply with reliability                  rules and accelerated depreciation for investments in transmission                  infrastructure. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  Price Anderson Amendments                  Act of 1988,                  which provides the framework for nuclear liability protection,                  will be                  extended by twenty years to 2025. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Federal                  support will be available for certain clean coal power initiatives,                  nuclear power projects and renewable energy technologies. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Environmental        Matters - Domestic**

*(PPL,        PPL Energy Supply and PPL Electric)*

*        (PPL        and PPL Energy Supply)*

*        (PPL        and PPL Energy Supply)*

*(PPL,        PPL Energy Supply and PPL Electric)*

*(PPL        and PPL Energy Supply)*

*(PPL,        PPL Energy Supply and PPL Electric)*

*(PPL        and PPL Energy Supply)*

*(PPL,        PPL Energy Supply and PPL Electric)*

*(PPL        and PPL Energy Supply)*

**Environmental        Matters - International **
*(PPL        and PPL Energy Supply)*

**Other**

** **
*(PPL        and PPL Energy Supply)*

*(PPL)*

*(PPL,        PPL Energy Supply and PPL Electric)*

|                                                                                                                              |   |   | **Recorded                  Liability at** |   | **Exposure                  at**       |   |                                   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------|--------|----------------------------------------|--------|----------------------------------------|
|                                                                                                                              |   |   | **June                  30, 2005**         |   | **December                  31, 2004** |   | **June                  30, 2005 (a)** |   | **Expiration                  Date** |
| **PPL**                                                                                                                           |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| Residual                  value guarantees of leased equipment                                                                    |   |   |                                       |   |                                   |   |                                   | $ | 9 |   |   | 2006 | (b) |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| **PPL                  Energy Supply**                  (c)                                                                       |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| WPD                  LLP guarantee of obligations under SIUK Capital Trust I preferred                  securities                |   |   |                                       |   |                                   |   |                                   |   | 82 |  (d) | 2027 |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| Letters                  of credit issued on behalf of affiliates                                                                 |   |   |                                       |   |                                   |   |                                   |   | 5 |  (e) | 2006 |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| Support                  agreements to guarantee partnerships' obligations for the sale                  of                  coal |   |   |                                       |   |                                   |   |                                   |   | 9 |   |   | 2007 |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| Retroactive                  premiums under nuclear insurance programs                                                            |   |   |                                       |   |                                   |   |                                   |   | 38 |   |   |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| Nuclear                  claims under The Price Anderson Amendments Act of 1988                                                   |   |   |                                       |   |                                   |   |                                   |   | 201 |  (f) |   |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |
| Contingent                  purchase price payments to former owners of synfuel                  projects                         |   | $      | 12                                         |   | $                                      | 11     |                                   |   | 47 |   | 2007 |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |
| Residual                  value guarantees of leased equipment                                                                    |   |   |                                       |   |                                   |   |                                   |   | 3 |   | 2006 | (b) |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |
| WPD                  guarantee of pension and other obligations of unconsolidated                  entities                  (g)  |   |   | 4                                          |   |                                   |   |                                   |   | 43 |   | 2017 |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |
| Indemnifications                  for entities in liquidation                                                                     |   |   |                                       |   |                                   |   |                                   |   | 273 |   | 2008                  to 2012 |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |
| WPD                  guarantee of an unconsolidated entity's lease obligations                                                    |   |   |                                       |   |                                   |   |                                   |   | 1 |   | 2008 |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |
| Indemnifications                  related to the sale of the Sundance plant                                                       |   |   | 1                                          |   |                                   |   |                                   |   |   |  (h) |   | (h) |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |
| **PPL                  Electric**(c)                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| Guarantee                  of a portion of an unconsolidated entity's debt                                                        |   |   |                                       |   |                                   |   |                                   |   | 7 |  (d) | 2008 |   |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |
| Residual                  value guarantees of leased equipment                                                                    |   |   | 1                                          |   |                                   | 1      |                                   |   | 77 |   |   | 2006 | (b) |
|                                                                                                                              |   |   |                                       |   |                                   |   |                                   |   |   |   |   |   |   |

| (a) |   | Represents                  the estimated maximum potential amount of future payments that                  could be                  required to be made under the guarantee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Although                  the expiration date noted is 2006, equipment of similar value is                  generally                  leased and guaranteed on an on-going basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (c) |   | Other                  than the exceptions noted in (e) below, all guarantees of PPL Energy                  Supply and PPL Electric also apply to PPL on a consolidated                  basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (d) |   | Reflects                  principal payments only.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (e) |   | Represents                  letters of credit issued at the direction of PPL Energy Supply                  for the                  benefit of third parties for assurance against nonperformance by                  PPL and                  PPL Gas Utilities. This is not a guarantee by PPL on a consolidated                  basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (f) |   | Amount                  is per incident.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (g) |   | 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, 2005, WPD has recorded an                  estimated                  discounted liability based on its current allocated percentage                  of the                  total expected costs. Neither the expiration date nor the maximum                  amount                  of potential payments for certain obligations is explicitly stated                  in the                  related agreements and, therefore, have been estimated based on                  the types                  of obligations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (h) |   | In                  connection with the sale of the Sundance plant, PPL Energy Supply                  has                  provided indemnifications to the purchaser 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. PPL Energy Supply's maximum                  exposure                  with respect to these indemnifications and the expiration of the                  indemnifications cannot be estimated because, in the case of certain                  of                  the 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. Certain of the indemnifications                  are                  triggered only if the purchaser's losses reach $1 million in the                  aggregate, are capped at 50% of the purchase price (or approximately                  $95                  million), and survive for a period of only 24 months after the                  May 13,                  2005, transaction closing. 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                  are capped at approximately $4 million in the aggregate and survive                  for a                  maximum period of five years after the transaction closing. |

| **10.  ** | **Related                  Party Transactions** |
|---------------------|-------------------------------------------------|

**Affiliate        Trust **
*(PPL        and PPL Energy Supply)*

**PLR        Contracts **
*(PPL        Energy Supply and PPL Electric)*

**NUG        Purchases **
*(PPL        Energy Supply and PPL Electric)*

**Allocations        of Corporate Service Costs**
** **
*(PPL        Energy Supply and PPL Electric*

|                             | **Three                  Months Ended****June                  30,** |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------|----------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                             |                                                                 |   |                                                               |   |
|                             | **2005**                                                             |   | **2004**                                                           |   | **2005** |   | **2004** |   |
|                             |                                                                 |   |                                                               |   |   |   |   |   |
| Direct                  expenses |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
|                             |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
|                             | PPL                  Energy Supply                                   | $      | 26                                                                 |   | $ | 24 |   | $ | 51 |   | $ | 48 |   |
|                             |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
|                             | PPL                  Electric                                        |   | 14                                                                 |   |   | 14 |   |   | 28 |   |   | 28 |   |
|                             |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
| Overhead                  costs  |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
|                             |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
|                             | PPL                  Energy Supply                                   |   | 20                                                                 |   |   | 18 |   |   | 39 |   |   | 32 |   |
|                             |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
|                             | PPL                  Electric                                        |   | 7                                                                  |   |   | 7 |   |   | 19 |   |   | 13 |   |
|                             |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |

**Intercompany        Borrowings**

*(PPL        Energy Supply)*

*PPL        Electric)*

**Trademark        Royalties **
*(PPL        Energy Supply)*

| **11.  ** | **Other                  Income - Net** |
|---------------------|-----------------------------------------|

*(PPL,        PPL Energy Supply and PPL Electric*

|                                    |                                                                      | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|-----------------------------------------|---------------------------------------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                    |                                                                      |                                                                 |   |   |                                                               |   |
|                                    |                                                                      | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **PPL**                                 |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Other                  Income**       |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Interest                  income                                          |                                                                 | $      | 6      |                                                               |   | $ | 3 |   |   | $ | 12 |   |   | $ | 6 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Equity                  earnings                                          |                                                                 |   | 1      |                                                               |   |   | 1 |   |   |   | 2 |   |   |   | 2 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Realized                  earnings on nuclear decommissioning trust       |                                                                 |   | 2      |                                                               |   |   |   |   |   |   | 3 |   |   |   | 4 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Gain                  on hedge activity                                   |                                                                 |   |   |                                                               |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Sale                  of CEMAR (Note 8)                                   |                                                                 |   |   |                                                               |   |   | 23 |   |   |   |   |   |   |   | 23 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - International                            |                                                                 |   | 1      |                                                               |   |   |   |   |   |   | 3 |   |   |   | 5 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - Domestic                                 |                                                                 |   | 3      |                                                               |   |   | 5 |   |   |   | 4 |   |   |   | 7 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                    | Total                                                                     |                                                                 |   | 13     |                                                               |   |   | 33 |   |   |   | 24 |   |   |   | 48 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Other                  Deductions**   |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Impairment                  of investment in technology supplier (Note 8) |                                                                 |   |   |                                                               |   |   | 10 |   |   |   |   |   |   |   | 10 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Taxes,                  other than income                                 |                                                                 |   | 1      |                                                               |   |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Charitable                  contributions                                 |                                                                 |   |   |                                                               |   |   |   |   |   |   | 2 |   |   |   | 2 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - International                            |                                                                 |   | 1      |                                                               |   |   | 2 |   |   |   | 1 |   |   |   | 4 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - Domestic                                 |                                                                 |   |   |                                                               |   |   | 2 |   |   |   | 2 |   |   |   | 4 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Other                  Income - net** |                                                                      | $                                                                    | 11     |   |                                                               | $      | 18 |   |   | $ | 18 |   |   | $ | 27 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **PPL                  Energy Supply**  |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Other                  Income**       |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Interest                  income                                          |                                                                 | $      | 4      |                                                               |   | $ | 2 |   |   | $ | 8 |   |   | $ | 4 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Affiliated                  interest income                               |                                                                 |   | 3      |                                                               |   |   | 1 |   |   |   | 5 |   |   |   | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Equity                  earnings                                          |                                                                 |   | 1      |                                                               |   |   | 1 |   |   |   | 2 |   |   |   | 2 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Realized                  earnings on nuclear decommissioning trust       |                                                                 |   | 2      |                                                               |   |   |   |   |   |   | 3 |   |   |   | 4 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Gain                  on hedge activity                                   |                                                                 |   |   |                                                               |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Sale                  of CEMAR (Note 8)                                   |                                                                 |   |   |                                                               |   |   | 23 |   |   |   |   |   |   |   | 23 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - International                            |                                                                 |   | 1      |                                                               |   |   |   |   |   |   | 3 |   |   |   | 5 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - Domestic                                 |                                                                 |   | 1      |                                                               |   |   | 3 |   |   |   | 2 |   |   |   | 4 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                    | Total                                                                     |                                                                 |   | 12     |                                                               |   |   | 31 |   |   |   | 23 |   |   |   | 44 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Other                  Deductions**   |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Taxes,                  other than income                                 |                                                                 |   |   |                                                               |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - International                            |                                                                 |   | 1      |                                                               |   |   | 2 |   |   |   | 1 |   |   |   | 4 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                  - Domestic                                 |                                                                 |   |   |                                                               |   |   |   |   |   |   | 3 |   |   |   | 2 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Other                  Income - net** |                                                                      | $                                                                    | 11     |   |                                                               | $      | 28 |   |   | $ | 19 |   |   | $ | 37 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **PPL                  Electric**       |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Other                  Income**       |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Interest                  income                                          |                                                                 | $      | 1      |                                                               |   |   |   |   |   | $ | 3 |   |   | $ | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Affiliated                  interest income                               |                                                                 |   | 3      |                                                               |   |   |   |   |   |   | 6 |   |   |   |   |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Miscellaneous                                                             |                                                                 |   | 2      |                                                               |   |   |   |   |   |   | 2 |   |   |   | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
|                                    | Total                                                                     |                                                                 |   | 6      |                                                               |   |   |   |   |   |   | 11 |   |   |   | 2 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Other                  Deductions**   |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   | 1 |   |   |   | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |
| **Other                  Income - net** |                                                                      | $                                                                    | 6      |   |                                                               |   |   |   |   | $ | 10 |   |   | $ | 1 |   |
|                                    |                                                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |

| **12.  ** | **Derivative                  Instruments and Hedging                  Activities** |
|---------------------|-------------------------------------------------------------------------------------|

*(PPL        and PPL Energy Supply)*

**Fair        Value Hedges**

**Cash        Flow Hedges**

|                                                                                                     | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                                                     |                                                                 |   |   |                                                               |   |
|                                                                                                     | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                                                                     |                                                                 |   |
| **PPL**                                                                                                  |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Beginning                  accumulated derivative gain (loss)                                            | $                                                                    | (129   | )      |                                                               | $      | 5 |   |   | $ | (63 | ) |   | $ | 41 |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Net                  change associated with current period hedging activities and                  other |                                                                 | 30     |   |                                                               |   | 17 |   |   |   | (49 | ) |   |   | (82 | ) |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Net                  change from reclassification into earnings                                          |                                                                 | (44    | )      |                                                               |   | (10 | ) |   |   | (31 | ) |   |   | 53 |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Ending                  accumulated derivative gain (loss)                                               | $                                                                    | (143   | )      |                                                               | $      | 12 |   |   | $ | (143 | ) |   | $ | 12 |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |
| **PPL                  Energy Supply**                                                                   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Beginning                  accumulated derivative gain (loss)                                            | $                                                                    | (111   | )      |                                                               | $      | 27 |   |   | $ | (45 | ) |   | $ | 60 |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Net                  change associated with current period hedging activities and                  other |                                                                 | 32     |   |                                                               |   | 8 |   |   |   | (45 | ) |   |   | (86 | ) |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Net                  change from reclassification into earnings                                          |                                                                 | (45    | )      |                                                               |   | (12 | ) |   |   | (34 | ) |   |   | 49 |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Ending                  accumulated derivative gain (loss)                                               | $                                                                    | (124   | )      |                                                               | $      | 23 |   |   | $ | (124 | ) |   | $ | 23 |   |
|                                                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

**Related        Implementation Issue **

** **

**Credit        Concentration **

*(PPL        and PPL Energy Supply)*

*(PPL        Energy Supply and PPL Electric)*

| **13.  ** | **Pension                  and Other Postretirement                  Benefits** |
|---------------------|---------------------------------------------------------------------------------|

*(PPL        and PPL Energy Supply)*

|                                                                                               |   | **Pension                  Benefits**                                |   |
|----------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
|                                                                                               |   |                                                                 |   |
|                                                                                               |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|                                                                                               |   |                                                                 |   |   |   |   |
|                                                                                               |   | **2005**                                                             |   |   | **2004** |   |   | **2005** |   |   | **2004** |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |
|                                                                                               |   | **Domestic**                                                         |   |   | **International** |   |   | **Domestic** |   |   | **International** |   |   | **Domestic** |   |   | **International** |   |   | **Domestic** |   |   | **International** |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **PPL**                                                                                            |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                                                                      |   | $                                                                    | 14     |   |   | $ | 5 |   |   | $ | 12 |   |   | $ | 4 |   |   | $ | 28 |   |   | $ | 9 |   |   | $ | 24 |   |   | $ | 7 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  cost                                                                     |   |                                                                 | 28     |   |   |   | 39 |   |   |   | 28 |   |   |   | 36 |   |   |   | 58 |   |   |   | 77 |   |   |   | 56 |   |   |   | 72 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expected                  return on plan assets                                                    |   |                                                                 | (40    | ) |   |   | (52 | ) |   |   | (38 | ) |   |   | (52 | ) |   |   | (79 | ) |   |   | (105 | ) |   |   | (75 | ) |   |   | (105 | ) |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of transition obligation                                             |   |                                                                 | (1     | ) |   |   |   |   |   |   | (1 | ) |   |   |   |   |   |   | (2 | ) |   |   |   |   |   |   | (2 | ) |   |   |   |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of prior service cost                                                |   |                                                                 | 4      |   |   |   | 1 |   |   |   | 4 |   |   |   | 1 |   |   |   | 7 |   |   |   | 2 |   |   |   | 7 |   |   |   | 2 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of (gain) loss                                                       |   |                                                                 | 1      |   |   |   | 8 |   |   |   | (2 | ) |   |   | 1 |   |   |   | 1 |   |   |   | 14 |   |   |   | (3 | ) |   |   | 3 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  periodic pension cost (credit) prior to termination                  benefits |   |                                                                 | 6      |   |   |   | 1 |   |   |   | 3 |   |   |   | (10 | ) |   |   | 13 |   |   |   | (3 | ) |   |   | 7 |   |   |   | (21 | ) |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Termination                  benefits                                                              |   |                                                                 |   |   |   |   | 1 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 6 |   |   |   |   |   |   |   |   |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  periodic pension cost (credit)                                                |   | $                                                                    | 6      |   |   | $ | 2 |   |   | $ | 3 |   |   | $ | (10 | ) |   | $ | 13 |   |   | $ | 3 |   |   | $ | 7 |   |   | $ | (21 | ) |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **PPL                  Energy Supply**                                                             |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                                                                      |   | $                                                                    | 1      |   |   | $ | 5 |   |   | $ | 1 |   |   | $ | 4 |   |   | $ | 2 |   |   | $ | 9 |   |   | $ | 2 |   |   | $ | 7 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  cost                                                                     |   |                                                                 | 1      |   |   |   | 39 |   |   |   | 1 |   |   |   | 36 |   |   |   | 2 |   |   |   | 77 |   |   |   | 2 |   |   |   | 72 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expected                  return on plan assets                                                    |   |                                                                 | (1     | ) |   |   | (52 | ) |   |   | (1 | ) |   |   | (52 | ) |   |   | (3 | ) |   |   | (105 | ) |   |   | (2 | ) |   |   | (105 | ) |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of prior service cost                                                |   |                                                                 |   |   |   |   | 1 |   |   |   |   |   |   |   | 1 |   |   |   |   |   |   |   | 2 |   |   |   |   |   |   |   | 2 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of loss                                                              |   |                                                                 |   |   |   |   | 8 |   |   |   |   |   |   |   | 1 |   |   |   | 1 |   |   |   | 14 |   |   |   |   |   |   |   | 3 |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  periodic pension cost (credit) prior to termination                  benefits |   |                                                                 | 1      |   |   |   | 1 |   |   |   | 1 |   |   |   | (10 | ) |   |   | 2 |   |   |   | (3 | ) |   |   | 2 |   |   |   | (21 | ) |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Termination                  benefits                                                              |   |                                                                 |   |   |   |   | 1 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 6 |   |   |   |   |   |   |   |   |   |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  periodic pension cost (credit)                                                |   | $                                                                    | 1      |   |   | $ | 2 |   |   | $ | 1 |   |   | $ | (10 | ) |   | $ | 2 |   |   | $ | 3 |   |   | $ | 2 |   |   | $ | (21 | ) |
|                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                    |   | **Other                  Postretirement Benefits**                   |   |
|---------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
|                                                    |   |                                                                 |   |
|                                                    |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|                                                    |   |                                                                 |   |   |   |   |
|                                                    |   | **2005**                                                             |   |   | **2004** |   |   | **2005** |   |   | **2004** |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |
| **PPL**                                                 |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                           |   | $                                                                    | 2      |   |   | $ | 2 |   |   | $ | 4 |   |   | $ | 3 |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  cost                          |   |                                                                 | 7      |   |   |   | 7 |   |   |   | 14 |   |   |   | 14 |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expected                  return on plan assets         |   |                                                                 | (5     | ) |   |   | (4 | ) |   |   | (10 | ) |   |   | (9 | ) |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of transition obligation  |   |                                                                 | 2      |   |   |   | 2 |   |   |   | 4 |   |   |   | 4 |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of prior service cost     |   |                                                                 | 1      |   |   |   | 1 |   |   |   | 2 |   |   |   | 2 |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of loss                   |   |                                                                 | 2      |   |   |   | 2 |   |   |   | 3 |   |   |   | 4 |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |
| Net                  other postretirement benefits cost |   | $                                                                    | 9      |   |   | $ | 10 |   |   | $ | 17 |   |   | $ | 18 |   |
|                                                    |   |                                                                 |   |   |   |   |   |   |   |   |   |   |

| **14.  ** | **Restricted                  Cash** |
|---------------------|--------------------------------------|

*(PPL,        PPL Energy Supply and PPL Electric)*

|                                                                | **June                    30, 2005**          |                                   |
|---------------------------------------------------------------------|-----------------------------------------------|----------------------------------------|
|                                                                | **PPL**                                       |                                   |   | **PPL                  Energy Supply** |   |   | **PPL                  Electric** |   |
| **Current:**                                                        |                                          |                                   |   |   |   |   |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| Collateral                  for letters of credit (a)               | $                                             | 42                                     |   |   |   |   |   |   | $ | 42 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| Funds                  on deposit for retirement of debt (b)        |                                          | 55                                     |   |   |   |   |   |   |   | 55 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| Miscellaneous                                                       |                                          | 18                                     |   |   | $ | 5 |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
|                                                                | Restricted                  cash - current    |                                   | 115 |   |   |   | 5 |   |   |   | 97 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| **Noncurrent:**                                                     |                                          |                                   |   |   |   |   |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| Required                  deposit of WPD's insurance subsidiary     |                                          | 22                                     |   |   |   | 22 |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| PPL                  Transition Bond Company Indenture reserves (c) |                                          | 20                                     |   |   |   |   |   |   |   | 20 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
|                                                                | Restricted                  cash - noncurrent |                                   | 42 |   |   |   | 22 |   |   |   | 20 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
|                                                                |                                          | Total                  restricted cash | $ | 157 |   |   | $ | 27 |   |   | $ | 117 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |

|                                                                | **December                  31, 2004**        |                                   |
|---------------------------------------------------------------------|-----------------------------------------------|----------------------------------------|
|                                                                | **PPL**                                       |                                   |   | **PPL                  Energy Supply** |   |   | **PPL                  Electric** |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
| **Current:**                                                        |                                          |                                   |   |   |   |   |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| Collateral                  for letters of credit (a)               | $                                             | 42                                     |   |   |   |   |   |   | $ | 42 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| Miscellaneous                                                       |                                          | 8                                      |   |   | $ | 3 |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
|                                                                | Restricted                  cash - current    |                                   | 50 |   |   |   | 3 |   |   |   | 42 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
| **Noncurrent:**                                                     |                                          |                                   |   |   |   |   |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| Required                  deposit of WPD's insurance subsidiary     |                                          | 37                                     |   |   |   | 37 |   |   |   |   |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |   |   |   |
| PPL                  Transition Bond Company Indenture reserves (c) |                                          | 22                                     |   |   |   |   |   |   |   | 22 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
|                                                                | Restricted                  cash - noncurrent |                                   | 59 |   |   |   | 37 |   |   |   | 22 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |
|                                                                |                                          | Total                  restricted cash | $ | 109 |   |   | $ | 40 |   |   | $ | 64 |   |
|                                                                |                                          |                                   |   |   |   |   |   |   |

| (a) |   | A                  deposit with a financial institution of funds from the asset-backed                  commercial paper program to fully collateralize $42 million of                  letters of                  credit. See Note 7 for further discussion on the asset-backed commercial                  paper program.                                                   |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Proceeds                  from the LCIDA's issuance of 4.75% Pollution Control Revenue Refunding                  Bonds due 2027 that are held in escrow for purposes of refunding                  the                  LCIDA's 6.15% Pollution Control Revenue Refunding Bonds due 2029                  in August                  2005. See Note 7 for further discussion. |
| (c) |   | Credit                  enhancement for PPL Transition Bond Company's $2.4 billion Series                  1999-1                  Bonds to protect against losses or delays in scheduled                  payments.                                                                                                                                                           |

| **15.  ** | **Asset                  Retirement Obligations** |
|---------------------|---------------------------------------------------|

*(PPL        and PPL Energy Supply)*

| ARO                  at December 31, 2004    |   | $      | 257    |   |
|----------------------------------------------|--------|--------|--------|--------|
|                                         |   |   |   |   |
| Add:                  Accretion expense      |   |   | 10     |   |
|                                         |   |   |   |   |
| Add:                  Additional liabilities |   |   | 3      |   |
|                                         |   |   |   |
| ARO                  at June 30, 2005        |   | $      | 270    |   |
|                                         |   |   |   |

| **16.  ** | **New                  Accounting Standards** |
|---------------------|-----------------------------------------------|

*(PPL,        PPL Energy Supply and PPL Electric)*

**SFAS        123(R)**

**FIN        47**

| **17.  ** | **Subsequent                  Events - 2-for-1 Stock Split and Dividend                  Increase** |
|---------------------|-----------------------------------------------------------------------------------------------------|

*(PPL)*

|                                               |                                                                     | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------|--------------------------------------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                               |                                                                     |                                                                 |   |   |                                                               |   |
|                                               |                                                                     | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                               |                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Income                  (Numerator)**            |                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations |                                                                     | $                                                                    | 177    |   |                                                               | $      | 155 |   |   | $ | 347 |   |   | $ | 337 |   |
|                                               |                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Loss                  from discontinued operations (net of income taxes) |                                                                 |   | 49     |                                                               |   |   | 7 |   |   |   | 51 |   |   |   | 12 |   |
|                                               |                                                                     |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Net                  Income                        |                                                                     | $                                                                    | 128    |   |                                                               | $      | 148 |   |   | $ | 296 |   |   | $ | 325 |   |

|                                                               |                                                                     | **Three                  Months Ended****June                  30,** |    |   | **Six                  Months Ended****June                  30,** |   |
|--------------------------------------------------------------------|--------------------------------------------------------------------------|----------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------|--------|
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |
|                                                               |                                                                     | **2005**                                                             |    |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| **Shares                  (Denominator)**                          |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Shares                  for Basic EPS                              |                                                                     |                                                                 | 379,252 |   |                                                               |   | 365,924 |   |   |   | 378,634 |   |   |   | 360,875 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Add                  incremental shares:                           |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               | Convertible                  Senior Notes                                |                                                                 |    | 1,822  |                                                               |   |   |   |   |   |   | 1,496 |   |   |   |   |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               | Stock                  options and other share-based awards              |                                                                 |    | 2,280  |                                                               |   |   | 1,124 |   |   |   | 2,171 |   |   |   | 1,170 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| Shares                  for Diluted EPS                            |                                                                     |                                                                 | 383,354 |   |                                                               |   | 367,048 |   |   |   | 382,301 |   |   |   | 362,045 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Basic                  EPS**                                     |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations                 |                                                                     | $                                                                    | 0.47    |   |                                                               | $      | 0.43 |   |   | $ | 0.91 |   |   | $ | 0.93 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               | Loss                  from discontinued operations (net of income taxes) |                                                                 |    | 0.13   |                                                               |   |   | 0.02 |   |   |   | 0.13 |   |   |   | 0.03 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| Net                  Income                                        |                                                                     | $                                                                    | 0.34    |   |                                                               | $      | 0.41 |   |   | $ | 0.78 |   |   | $ | 0.90 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                  EPS**                                   |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from continuing operations                 |                                                                     | $                                                                    | 0.46    |   |                                                               | $      | 0.42 |   |   | $ | 0.90 |   |   | $ | 0.93 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                               | Loss                  from discontinued operations (net of income taxes) |                                                                 |    | 0.13   |                                                               |   |   | 0.02 |   |   |   | 0.13 |   |   |   | 0.03 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |
| Net                  Income                                        |                                                                     | $                                                                    | 0.33    |   |                                                               | $      | 0.40 |   |   | $ | 0.77 |   |   | $ | 0.90 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Pro                  forma Dividends per Share of Common Stock** |                                                                     | $                                                                    | 0.23    |   |                                                               | $      | 0.21 |   |   | $ | 0.46 |   |   | $ | 0.41 |   |
|                                                               |                                                                     |                                                                 |    |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |

----

**P**
**PL        CORPORATION AND SUBSIDIARIES**

**Item        2. Management's Discussion and Analysis of Financial Condition and Results        of        Operations**

**Overview**

**Results        of Operations**

**Earnings**

|                           |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|--------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                           |   |                                                                 |   |   |                                                               |   |
|                           |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                           |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Net                  income    |   | $                                                                    | 128    |   |                                                               | $      | 148 |   |   | $ | 296 |   |   | $ | 325 |   |
|                           |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| EPS                  - basic   |   | $                                                                    | 0.67   |   |                                                               | $      | 0.81 |   |   | $ | 1.56 |   |   | $ | 1.80 |   |
|                           |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| EPS                  - diluted |   | $                                                                    | 0.67   |   |                                                               | $      | 0.81 |   |   | $ | 1.55 |   |   | $ | 1.80 |   |

|                           |                                                                                                                                          | **June                  30, 2005 vs. June 30, 2004**                  |   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|--------|
|                           |                                                                                                                                          |                                                                  |   |
|                           |                                                                                                                                          | **Three                  Months****Ended**                            |   |   | **Six                  Months****Ended** |   |
| Domestic:                      |                                                                                                                                          |                                                                  |   |   |   |   |   |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |
|                           | Eastern                  U.S. non-trading margins                                                                                             |                                                                  | $      | (5 | ) |   | $ | 10 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Northwestern                  U.S. non-trading margins                                                                                        |                                                                  |   | 3 |   |   |   | (5 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Southwestern                  U.S. non-trading margins                                                                                        |                                                                  |   | (2 | ) |   |   | (3 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Net                  energy trading margins                                                                                                   |                                                                  |   | (4 | ) |   |   | 2 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Delivery                  revenues (net of CTC/ITC amortization, interest expense on transition                  bonds and ancillary charges) |                                                                  |   | 30 |   |   |   | 58 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Operation                  and maintenance expenses                                                                                           |                                                                  |   | (3 | ) |   |   | (21 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Depreciation                                                                                                                                  |                                                                  |   | (1 | ) |   |   | (3 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Taxes,                  other than income (excluding gross receipts tax)                                                                      |                                                                  |   |   |   |   |   | (8 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Interest                  expense                                                                                                             |                                                                  |   | 5 |   |   |   | 3 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Earnings                  from synfuel projects                                                                                               |                                                                  |   | 12 |   |   |   | 19 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Other                                                                                                                                         |                                                                  |   | (2 | ) |   |   | (4 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | Total                  Domestic                                       |   |   | 33 |   |   |   | 48 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
| International:                 |                                                                                                                                          |                                                                  |   |   |   |   |   |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |
|                           | U.K.                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | Delivery                  margins                                     |   |   | 3 |   |   |   |   |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | Operation                  and maintenance expenses                   |   |   | (3 | ) |   |   | (8 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | Interest                  expense                                     |   |   | 2 |   |   |   | 2 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | Impact                  of changes in foreign currency exchange rates |   |   | 2 |   |   |   | 5 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | U.K.                  income taxes                                    |   |   | 1 |   |   |   | 3 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           | Latin                  America                                                                                                                |                                                                  |   |   |   |   |   | 2 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | U.S.                  income taxes                                                                                                            |                                                                  |   | 3 |   |   |   | 9 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |   |   |   |
|                           | Other                                                                                                                                         |                                                                  |   | 2 |   |   |   | 3 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | Total                  International                                  |   |   | 10 |   |   |   | 16 |   |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
| Unusual                  items |                                                                                                                                          |                                                                  | (63    | ) |   |   | (93 | ) |
|                           |                                                                                                                                          |                                                                  |   |   |   |   |
|                           |                                                                                                                                          | $                                                                     | (20    | ) |   | $ | (29 | ) |

|                                                                                                                  |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |
|                                                                                                                  |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Supply                  Segment**                                                                                   |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of the Sundance plant (Note 8)                                                                  |   | $                                                                    | (47    | )      |                                                               |   |   |   |   | $ | (47 | ) |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Acceleration                  of stock-based compensation expense for periods prior to 2005(Note                  2)  |   |                                                                 |   |   |                                                               |   |   |   |   |   | (3 | ) |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| NorthWestern                  litigation (Note 9)                                                                     |   |                                                                 |   |   |                                                               |   |   |   |   |   | (6 | ) |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Impairment                  of investment in technology supplier (Note 8)                                             |   |                                                                 |   |   |                                                               | $      | (6 | ) |   |   |   |   |   | $ | (6 | ) |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                                                                                  |   |                                                                 | (47    | )      |                                                               |   | (6 | ) |   |   | (56 | ) |   |   | (6 | ) |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **International                  Delivery Segment**                                                                   |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of CGE (Note 8)                                                                                 |   |                                                                 |   |   |                                                               |   | 1 |   |   |   |   |   |   |   | (7 | ) |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of CEMAR (Note 8)                                                                               |   |                                                                 |   |   |                                                               |   | 23 |   |   |   |   |   |   |   | 23 |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of Latin American telecommunications company (Note 8)                                           |   |                                                                 |   |   |                                                               |   | (2 | ) |   |   |   |   |   |   | (2 | ) |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   | 22 |   |   |   |   |   |   |   | 14 |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| **Pennsylvania                  Delivery Segment**                                                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| PJM                  billing dispute (Note                  9)                                                        |   |                                                                 |   |   |                                                               |   |   |   |   |   | (27 | ) |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Acceleration                  of stock-based compensation expense for periods prior to 2005 (Note                  2) |   |                                                                 |   |   |                                                               |   |   |   |   |   |  (2 |  ) |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   | (29 | ) |   |   |   |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Total                                                                                                                 |   | $                                                                    | (47    | )      |                                                               | $      | 16 |   |   | $ | (85 | ) |   | $ | 8 |   |
|                                                                                                                  |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

| ·   | PPL's                  future energy margins will be impacted by changes in market prices                  for                  electricity, as well as fluctuations in fuel prices, fuel transportation                  costs and emission allowance expenses. For instance, although PPL                  expects                  market prices for electricity in 2005 to be higher than in 2004,                  PPL is                  not expecting an increase in its 2005 energy margins due to expected                  increases in the cost of fuel, fuel transportation and emissions                  allowances. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                  key part of PPL's overall strategy has been to enter into long-term                  energy                  supply agreements in order to mitigate market price and supply                  risk.                  Whether PPL continues to enter into such agreements or renews existing                  energy supply agreements and the market conditions at that time                  will                  affect its future earnings. For example, based on current forward                  energy                  prices, PPL currently expects that, upon the expiration of certain                  of its                  existing supply agreements, it may be able to enter new supply                  agreements                  or arrangements at significantly higher market prices than the                  prices                  included in those existing supply agreements. See "Energy Purchases,                  Energy Sales and Other Commitments" in Note 9 to the Financial                  Statements                  for more information regarding PPL's wholesale energy commitments                  and "PLR                  Contracts" in Note 10 for more information regarding the PLR                  contracts. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Due                  to current electricity and natural gas price levels, there is a                  risk that                  PPL may be unable to recover its investment in certain gas-fired                  generation facilities. Under GAAP, PPL does not believe that there                  is an                  impairment charge to be recorded for these facilities at this time.                  PPL is                  unable to predict the earnings impact of this issue, based upon                  future                  energy and fuel price levels, applicable accounting rules and other                  factors, but such impact may be                  material. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  May 2005, a subsidiary of PPL Generation completed the sale of                  its 450 MW                  Sundance power plant located in Pinal County, Arizona to Arizona                  Public                  Service Company for approximately $190 million in cash. Proceeds                  of the                  sale were used to reduce PPL's outstanding debt and improve liquidity.                  PPL                  recognized a non-cash loss on the sale of approximately $47 million                  after                  tax (or $0.24 per share) in the second quarter of 2005 related                  to                  this transaction. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL's                  ability to manage operational risk with respect to its generation                  plants                  is critical to its financial performance. Specifically, depending                  on the                  timing and duration of both planned and unplanned outages (in particular,                  if such outages are during peak periods or during periods of, or                  caused                  by, severe weather), PPL's revenue from energy sales could be adversely                  affected and its need to purchase power at then-current market                  prices to                  satisfy its energy commitments could be significantly increased. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  has interests in two synthetic fuel facilities and receives tax                  credits                  pursuant to Section 29 of the Internal Revenue Code based on its                  sale of                  synthetic fuel to unaffiliated third-party purchasers. PPL has                  estimated                  that these facilities will contribute approximately $0.21 to annual                  EPS                  through 2007, when the availability of such tax credits is scheduled                  to                  expire. See "IRS Synthetic Fuels Tax Credits" in Note 9 to the                  Financial                  Statements for a discussion of the requirements to receive the                  Section 29                  tax credits and the impact of higher oil prices on the Section                  29 tax                  credits. Also see "Risk Management - Energy Marketing & Trading and                  Other - Synthetic Fuel Tax Credit Risk" for a discussion of PPL's                  risk                  management activities to mitigate the impact of a potential phase-out                  of                  the synthetic fuel tax credit due to high oil                  prices. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | To                  comply with existing and future environmental requirements and                  as a result                  of voluntary pollution control measures it may take, PPL expects                  to spend                  significant amounts on environmental control and compliance in                  the future.                  The costs of such measures, in most cases, are not now determinable                  with                  certainty. For instance, PPL's current cost estimates for sulfur                  dioxide                  reduction at its generating plants are preliminary and PPL could                  incur                  significantly higher capital and operating expenses due to more                  stringent                  environmental requirements, changing market conditions with respect                  to the                  cost of pollution control equipment or emissions allowances, delays                  in the                  installation of pollution control equipment or other factors. See                  "Environmental Matters - Domestic" in Note 9 to the Financial Statements                  for more information regarding current environmental requirements                  and                  initiatives, including those relating to air emissions, and PPL's                  anticipated capital expenditure program to meet the sulfur dioxide                  reduction requirements of the Clean Air Act. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  May 2005, PPL and NorthWestern reached an agreement in principle                  to settle                  litigation described under "NorthWestern Corporation Litigation"                  in Note 9                  to the Financial Statements. See Note 9 for more information regarding                  this matter, including the agreement in principle and the status                  of the                  settlement discussions. PPL recognized a charge of $6 million after                  tax                  (or $0.03 per share), in the first quarter of 2005 for a loss contingency                  related to this matter. PPL cannot be certain of the outcome of                  this                  matter. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Earnings                  in 2005 and beyond are expected to continue to be adversely affected                  by                  increased pension costs. Specifically, WPD will experience increased                  pension costs due to a recent actuarial valuation of WPD's plans                  that                  reflects higher pension obligations. The increase in pension costs                  in 2005                  is forecasted to be approximately $24 million, after tax, and the                  increase                  in pension costs is expected to continue to be significant in 2006.                  An                  additional $4 million of expense, after tax, was recognized in                  the first                  quarter of 2005 related to termination benefits. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  December 2004, the PUC approved an increase in PPL Electric's distribution                  rates of approximately $137 million (based on a return on equity                  of                  10.7%), and approved PPL Electric's proposed mechanism for collecting                  an                  additional $57 million in transmission-related charges, for a total                  increase of approximately $194 million, effective January 1,                  2005. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  Electric has agreed to provide electricity supply to its PLR customers                  at                  predetermined rates through 2009 and has entered into PUC-approved,                  full                  requirements energy supply agreements with PPL EnergyPlus to fulfill                  its                  PLR obligation. The predetermined charges for generation supply                  which PPL                  Electric collects from its PLR customers and pays to PPL EnergyPlus                  under                  the energy supply agreements provide for annual increases in each                  year                  commencing in 2006 and continuing through 2009. PPL Electric's                  PLR                  obligation after 2009 will be determined by the PUC pursuant to                  rules that                  have not yet been promulgated. See Note 10 to the Financial Statements                  for                  more information regarding the PLR                  contracts. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  January 2005, severe ice storms hit PPL Electric's service territory.                  PPL                  Electric had to restore service to approximately 238,000 customers.                  Although the actual cost of these storms and the specific allocation                  of                  such cost between operation and maintenance expense and capital                  costs is                  not yet finalized, PPL Electric currently estimates a total cost                  of $21                  million, with approximately $18 million (or $0.05 per share), being                  recorded as an expense on PPL Electric's income statement for the                  six                  months ended June 30, 2005. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | As                  a result of the Order issued by the FERC in connection with the                  litigation                  described under "PJM Billing" in Note 9 to the Financial Statements,                  PPL                  recognized an after-tax charge of $27 million (or $0.14 per share)                  in the                  first quarter of 2005 for a loss contingency related to the litigation.                  PPL cannot be certain of the outcome of this matter or the impact                  on PPL                  and its subsidiaries. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  is unable to predict whether future impairments of goodwill may                  be                  required for its domestic and international investments. While                  no goodwill                  impairments were required based on the annual review performed                  in the                  fourth quarter of 2004, future impairments may occur due to determinations                  of carrying value exceeding the fair value of these                  investments. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | From                  time to time, PPL and its subsidiaries are involved in negotiations                  with                  third parties regarding acquisitions and dispositions of businesses                  and                  assets. Any such transactions may impact future                  earnings. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | See                  Note 9 to the Financial Statements for other potential commitments                  and                  contingent liabilities that may impact future                  earnings. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | See                  Note 16 to the Financial Statements for new accounting standards                  that have                  been issued but not yet adopted by PPL that may impact future                  earnings. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Segment        Results **

|                                    |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|-----------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                    |   |                                                                 |   |   |                                                               |   |
|                                    |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Supply                                  |   | $                                                                    | 40     |   |                                                               | $      | 80 |   |   | $ | 126 |   |   | $ | 169 |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| International                  Delivery |   |                                                                 | 54     |   |                                                               |   | 66 |   |   |   | 116 |   |   |   | 114 |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Pennsylvania                  Delivery  |   |                                                                 | 34     |   |                                                               |   | 2 |   |   |   | 54 |   |   |   | 42 |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                    | Total  |                                                                 | $      | 128    |                                                               |   | $ | 148 |   |   | $ | 296 |   |   | $ | 325 |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                               |                                      | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------|-------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                               |                                      |                                                                 |   |   |                                                               |   |
|                                               |                                      | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Energy                  revenues                   |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | External                                  |                                                                 | $      | 298    |                                                               |   | $ | 325 |   |   | $ | 607 |   |   | $ | 639 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Intersegment                              |                                                                 |   | 363    |                                                               |   |   | 346 |   |   |   | 779 |   |   |   | 756 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 149    |   |                                                               |   | 111 |   |   |   | 271 |   |   |   | 214 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating revenues |                                                                 |   | 810    |                                                               |   |   | 782 |   |   |   | 1,657 |   |   |   | 1,609 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fuel                  and energy purchases         |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | External                                  |                                                                 |   | 276    |                                                               |   |   | 265 |   |   |   | 580 |   |   |   | 583 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                               | Intersegment                              |                                                                 |   | 34     |                                                               |   |   | 39 |   |   |   | 72 |   |   |   | 78 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  operation and maintenance   |                                      |                                                                 | 170    |   |                                                               |   | 167 |   |   |   | 360 |   |   |   | 337 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                       |                                      |                                                                 | 36     |   |                                                               |   | 35 |   |   |   | 73 |   |   |   | 68 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Taxes,                  other than income          |                                      |                                                                 | 11     |   |                                                               |   | 12 |   |   |   | 22 |   |   |   | 23 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 162    |   |                                                               |   | 125 |   |   |   | 303 |   |   |   | 241 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating expenses |                                                                 |   | 689    |                                                               |   |   | 643 |   |   |   | 1,410 |   |   |   | 1,330 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Other                  Income - net                |                                      |                                                                 | 1      |   |                                                               |   | (4 | ) |   |   | 1 |   |   |   | (2 | ) |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                  |                                      |                                                                 | 27     |   |                                                               |   | 32 |   |   |   | 57 |   |   |   | 53 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                      |                                      |                                                                 | 5      |   |                                                               |   | 16 |   |   |   | 13 |   |   |   | 44 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Minority                  Interest                 |                                      |                                                                 | 1      |   |                                                               |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations |                                      |                                                                 | 49     |   |                                                               |   | 6 |   |   |   | 51 |   |   |   | 10 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                                     |                                                                 | $      | 40     |                                                               |   | $ | 80 |   |   | $ | 126 |   |   | $ | 169 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                                   |   | **June                  30, 2005 vs. June 30, 2004** |   |
|--------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                   |   |                                                 |   |
|                                                   |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                   |   |                                                 |   |   |   |   |
| Eastern                  U.S. non-trading margins      |   | $                                                    | (5     | ) |   | $ | 10 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Northwestern                  U.S. non-trading margins |   |                                                 | 3      |   |   |   | (5 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Southwestern                  U.S. non-trading margins |   |                                                 | (2     | ) |   |   | (3 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Net                  energy trading margins            |   |                                                 | (4     | ) |   |   | 2 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Operation                  and maintenance expenses    |   |                                                 | (2     | ) |   |   | (9 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Earnings                  from synfuel projects        |   |                                                 | 12     |   |   |   | 19 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Depreciation                                           |   |                                                 |   |   |   |   | (2 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Interest                  expense                      |   |                                                 | 4      |   |   |   | 1 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Other                                                  |   |                                                 | (5     | ) |   |   | (6 | ) |
|                                                   |   |                                                 |   |   |   |   |
|                                                   | Total  |                                                 |   | 1 |   |   |   | 7 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Unusual                  items                         |   |                                                 | (41    | ) |   |   | (50 | ) |
|                                                   |   |                                                 |   |   |   |   |
|                                                   |   | $                                                    | (40    | ) |   | $ | (43 | ) |
|                                                   |   |                                                 |   |   |   |   |

| ·   | See                  "Domestic Gross Energy Margins" for an explanation of non-trading                  margins                  by geographic region and for an explanation of net energy trading                  margins. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Higher                  operation and maintenance expenses for the six months ended June                  30, 2005,                  was primarily due to accelerated amortization of stock-based compensation                  for retirement-eligible employees, which resulted from additional                  accounting guidance. See Note 2 to the Financial Statements for                  additional                  information. Also, expenses increased for both periods due to outage                  costs                  at the Colstrip Unit 2 and Corette                  facilities. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  improved earnings contribution from synfuel projects for both periods                  resulted primarily from the Tyrone facility that began commercial                  operation during the third quarter of                  2004. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |                                      | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------|-------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                               |                                      |                                                                 |   |   |                                                               |   |
|                                               |                                      | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Utility                  revenues                  |                                      | $                                                                    | 284    |   |                                                               | $      | 255 |   |   | $ | 577 |   |   | $ | 534 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 19     |   |                                                               |   | 17 |   |   |   | 37 |   |   |   | 34 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating revenues |                                                                 |   | 303    |                                                               |   |   | 272 |   |   |   | 614 |   |   |   | 568 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fuel                  and energy purchases         |                                      |                                                                 | 65     |   |                                                               |   | 51 |   |   |   | 128 |   |   |   | 105 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  operation and maintenance   |                                      |                                                                 | 61     |   |                                                               |   | 54 |   |   |   | 124 |   |   |   | 109 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                       |                                      |                                                                 | 39     |   |                                                               |   | 36 |   |   |   | 76 |   |   |   | 72 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Taxes,                  other than income          |                                      |                                                                 | 15     |   |                                                               |   | 13 |   |   |   | 29 |   |   |   | 27 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 8      |   |                                                               |   | 6 |   |   |   | 13 |   |   |   | 27 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating expenses |                                                                 |   | 188    |                                                               |   |   | 160 |   |   |   | 370 |   |   |   | 340 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Other                  Income - net                |                                      |                                                                 | 4      |   |                                                               |   | 22 |   |   |   | 7 |   |   |   | 28 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                  |                                      |                                                                 | 52     |   |                                                               |   | 53 |   |   |   | 102 |   |   |   | 102 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                      |                                      |                                                                 | 12     |   |                                                               |   | 13 |   |   |   | 30 |   |   |   | 35 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Minority                  Interest                 |                                      |                                                                 | 1      |   |                                                               |   | 1 |   |   |   | 3 |   |   |   | 3 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations |                                      |                                                                 |   |   |                                                               |   | 1 |   |   |   |   |   |   |   | 2 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                                     |                                                                 | $      | 54     |                                                               |   | $ | 66 |   |   | $ | 116 |   |   | $ | 114 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                               |                                                                  | **June                  30, 2005 vs. June 30, 2004** |   |
|------------------------------------|-----------------------------------------------------------------------|------------------------------------------------------|--------|
|                               |                                                                  |                                                 |   |
|                               |                                                                  | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                               |                                                                  |                                                 |   |   |   |   |
| U.K.                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Delivery                  margins                                     |                                                 | $      | 3 |   |   |   |   |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Operation                  and maintenance expenses                   |                                                 |   | (3 | ) |   | $ | (8 | ) |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Interest                  expense                                     |                                                 |   | 2 |   |   |   | 2 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Impact                  of changes in foreign currency exchange rates |                                                 |   | 2 |   |   |   | 5 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | U.K.                  income taxes                                    |                                                 |   | 1 |   |   |   | 3 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| Latin                  America     |                                                                  |                                                 |   |   |   |   | 2 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| U.S.                  income taxes |                                                                  |                                                 | 3      |   |   |   | 9 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| Other                              |                                                                  |                                                 | 2      |   |   |   | 3 |   |
|                               |                                                                  |                                                 |   |   |   |   |
|                               | Total                                                                 |                                                 |   | 10 |   |   |   | 16 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| Unusual                  items     |                                                                  |                                                 | (22    | ) |   |   | (14 | ) |
|                               |                                                                  |                                                 |   |   |   |   |
|                               |                                                                  | $                                                    | (12    | ) |   | $ | 2 |   |
|                               |                                                                  |                                                 |   |   |   |   |

| ·   | The                  U.K.'s earnings were positively impacted in both periods by favorable                  currency exchange rates, and higher delivery margins for the three                  months                  ended June 30, 2005, primarily due to favorable customer mix. These                  favorable variances were offset by higher operation and maintenance                  expenses, primarily due to increased pension costs in both                  periods. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | U.S.                  income taxes decreased primarily due to greater utilization of                  foreign tax                  credits in both periods. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                          |                                      | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|---------------------------------------------------------------|-------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                          |                                      |                                                                 |   |   |                                                               |   |
|                                                          |                                      | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Operating                  revenues                           |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                          | External                                  |                                                                 | $      | 726    |                                                               |   | $ | 653 |   |   | $ | 1,584 |   |   | $ | 1,459 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                          | Intersegment                              |                                                                 |   | 34     |                                                               |   |   | 39 |   |   |   | 72 |   |   |   | 78 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                          | Total                  operating revenues |                                                                 |   | 760    |                                                               |   |   | 692 |   |   |   | 1,656 |   |   |   | 1,537 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fuel                  and energy purchases                    |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                          | External                                  |                                                                 |   | 70     |                                                               |   |   | 73 |   |   |   | 214 |   |   |   | 173 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
|                                                          | Intersegment                              |                                                                 |   | 363    |                                                               |   |   | 346 |   |   |   | 779 |   |   |   | 756 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  operation and maintenance              |                                      |                                                                 | 100    |   |                                                               |   | 97 |   |   |   | 211 |   |   |   | 186 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of recoverable transition costs |                                      |                                                                 | 59     |   |                                                               |   | 57 |   |   |   | 128 |   |   |   | 128 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                  |                                      |                                                                 | 30     |   |                                                               |   | 29 |   |   |   | 59 |   |   |   | 57 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Taxes,                  other than income                     |                                      |                                                                 | 43     |   |                                                               |   | 38 |   |   |   | 90 |   |   |   | 69 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses                    |                                      |                                                                 |   |   |                                                               |   | 1 |   |   |   |   |   |   |   | 1 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                                          | Total                  operating expenses |                                                                 |   | 665    |                                                               |   |   | 641 |   |   |   | 1,481 |   |   |   | 1,370 |   |
|                                                          |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                          |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|-----------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                          |   |                                                                 |   |   |                                                               |   |
|                                          |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                          |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Other                  Income - net           |   |                                                                 | 6      |   |                                                               |   |   |   |   |   | 10 |   |   |   | 1 |   |
|                                          |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense             |   |                                                                 | 46     |   |                                                               |   | 48 |   |   |   | 101 |   |   |   | 99 |   |
|                                          |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                 |   |                                                                 | 21     |   |                                                               |   | 1 |   |   |   | 29 |   |   |   | 26 |   |
|                                          |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                  on Preferred Stock |   |                                                                 |   |   |                                                               |   |   |   |   |   | 1 |   |   |   | 1 |   |
|                                          |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                          | Total  |                                                                 | $      | 34     |                                                               |   | $ | 2 |   |   | $ | 54 |   |   | $ | 42 |   |
|                                          |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                                                                                                                          |   | **June                  30, 2005 vs. June 30, 2004** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                          |   |                                                 |   |
|                                                                                                                                          |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |
| Delivery                  revenues (net of CTC/ITC amortization, interest expense on transition                  bonds and ancillary charges) |   | $                                                    | 30     |   |   | $ | 58 |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Operation                  and maintenance expenses                                                                                           |   |                                                 |   |   |   |   | (13 | ) |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Taxes,                  other than income (excluding gross receipts tax)                                                                      |   |                                                 |   |   |   |   | (8 | ) |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Other                                                                                                                                         |   |                                                 | 2      |   |   |   | 4 |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |
|                                                                                                                                          | Total  |                                                 |   | 32 |   |   |   | 41 |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Unusual                  items                                                                                                                |   |                                                 |   |   |   |   | (29 | ) |
|                                                                                                                                          |   |                                                 |   |   |   |   |
|                                                                                                                                          |   | $                                                    | 32     |   |   | $ | 12 |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |

| ·   | Delivery                  revenues increased for both periods as a result of higher transmission                  and                  distribution customer rates effective January 1, 2005, and                  a 2.2%                  increase in electricity delivery sales volumes for the six months                  ended                  June 30, 2005. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  increase in operation and maintenance expenses for the six months                  ended                  June 30, 2005, was primarily due to the costs incurred in January                  2005 to                  restore electric service to customers as a result of severe ice                  storms                  that affected portions of PPL Electric's service territory. The                  increase                  was also due to accelerated amortization of stock-based compensation                  for                  retirement-eligible employees, which resulted from additional accounting                  guidance. See Note 2 to the Financial Statements for additional                  information on stock-based                  compensation. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Taxes,                  other than income, benefited in 2004 from the reversal of 1998                  and 1999                  PURTA tax accruals related to the PPL Susquehanna tax                  appeals. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Consolidated        **
**Statement        of Income Line Item Discussion -- **

**Domestic        Gross Energy Margins**

|                                           |                                 | **June                  30, 2005 vs. June 30, 2004** |   |
|------------------------------------------------|--------------------------------------|------------------------------------------------------|--------|
|                                           |                                 |                                                 |   |
|                                           |                                 | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                           |                                 |                                                 |   |   |   |   |
| Utility                                        |                                 | $                                                    | 102    |   |   | $ | 168 |   |
|                                           |                                 |                                                 |   |   |   |   |   |   |
| Unregulated                  retail electric   |                                 |                                                 | (6     | ) |   |   | (12 | ) |
|                                           |                                 |                                                 |   |   |   |   |   |   |
| Wholesale                  energy marketing    |                                 |                                                 | (14    | ) |   |   | (23 | ) |
|                                           |                                 |                                                 |   |   |   |   |   |   |
| Net                  energy trading margins    |                                 |                                                 | (7     | ) |   |   | 3 |   |
|                                           |                                 |                                                 |   |   |   |   |   |   |
| Other                  revenue adjustments (a) |                                 |                                                 | (75    | ) |   |   | (123 | ) |
|                                           |                                 |                                                 |   |   |   |   |   |
|                                           | Total                  revenues      |                                                 |   |   |   |   |   | 13 |   |
|                                           |                                 |                                                 |   |   |   |   |
| Fuel                                           |                                 |                                                 | (12    | ) |   |   | 27 |   |
|                                           |                                 |                                                 |   |   |   |   |   |   |
| Energy                  purchases              |                                 |                                                 | 34     |   |   |   | 34 |   |
|                                           |                                 |                                                 |   |   |   |   |   |   |
| Other                  cost adjustments (a)    |                                 |                                                 | (9     | ) |   |   | (54 | ) |
|                                           |                                 |                                                 |   |   |   |   |   |
|                                           | Total                  cost of sales |                                                 |   | 13 |   |   |   | 7 |   |
|                                           |                                 |                                                 |   |   |   |   |   |
|                                           |                                 | Domestic                  gross energy margins       |   | $ | (13 | ) |   | $ | 6 |   |
|                                           |                                 |                                                 |   |   |   |   |   |

| (a)          |   | Adjusted                  to exclude the impact of any revenues and costs not associated                  with                  domestic gross energy margins, in particular, revenues and energy                  costs                  related to the international operations of PPL Global, the domestic                  delivery operations of PPL Electric and PPL Gas Utilities and an                  accrual                  for the loss contingency related to the PJM billing dispute in                  March 2005                  (see Note 9 to the Financial Statements for additional information).                  Also                  adjusted to include gains or losses on sales of emission allowances,                  which                  are included in "Other operation and maintenance" expenses on the                  Statement of Income. |
|--------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|                                |                                           | **June                  30, 2005 vs. June 30, 2004** |   |
|-------------------------------------|------------------------------------------------|------------------------------------------------------|--------|
|                                |                                           |                                                 |   |
|                                |                                           | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                |                                           |                                                 |   |   |   |   |
| Eastern                  U.S.       |                                           | $                                                    | (8     | ) |   | $ | 18 |   |
|                                |                                           |                                                 |   |   |   |   |   |   |
| Northwestern                  U.S.  |                                           |                                                 | 5      |   |   |   | (9 | ) |
|                                |                                           |                                                 |   |   |   |   |   |   |
| Southwestern                  U.S.  |                                           |                                                 | (3     | ) |   |   | (6 | ) |
|                                |                                           |                                                 |   |   |   |   |   |   |
| Net                  energy trading |                                           |                                                 | (7     | ) |   |   | 3 |   |
|                                |                                           |                                                 |   |   |   |   |
|                                | Domestic                  gross energy margins |                                                 | $      | (13 | ) |   | $ | 6 |   |

**Utility        Revenues**

|           |                                                       | **June                  30, 2005 vs. June 30, 2004** |   |
|----------------|------------------------------------------------------------|------------------------------------------------------|--------|
|           |                                                       |                                                 |   |
|           |                                                       | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|           |                                                       |                                                 |   |   |   |   |
| Domestic:      |                                                       |                                                 |   |   |   |   |   |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |
|           | Retail                  electric revenue (PPL Electric)    |                                                 |   |   |   |   |   |   |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           |                                                       | Electric                  delivery                   |   | $ | 50 |   |   | $ | 82 |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           |                                                       | PLR                  electric generation supply      |   |   | 25 |   |   |   | 41 |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           | Gas                  revenue (PPL Gas Utilities)           |                                                 |   | 4 |   |   |   | 11 |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           | Wholesale                  electric revenue (PPL Electric) |                                                 |   | 1 |   |   |   | (2 | ) |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           | Other                                                      |                                                 |   | (7 | ) |   |   | (7 | ) |
|           |                                                       |                                                 |   |   |   |   |   |
| International: |                                                       |                                                 |   |   |   |   |   |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           | Retail                  electric delivery (PPL Global)     |                                                 |   |   |   |   |   |   |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           |                                                       | Chile                                                |   |   | 14 |   |   |   | 21 |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           |                                                       | U.K.                                                 |   |   | 13 |   |   |   | 17 |   |
|           |                                                       |                                                 |   |   |   |   |   |   |   |   |
|           |                                                       | El                  Salvador                         |   |   | 2 |   |   |   | 5 |   |
|           |                                                       |                                                 |   |   |   |   |   |
|           |                                                       | $                                                    | 102    |   |   | $ | 168 |   |
|           |                                                       |                                                 |   |   |   |   |

| ·   | higher                  domestic delivery revenues resulting from higher transmission and                  distribution customer rates effective January 1,                  2005; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher                  PLR revenues due to higher energy and capacity rates and increases                  in                  volumes of 2.3% and 4.1% for the three and six months ended June                  30, 2005,                  compared with the same periods in 2004, in part due to the return                  of                  customers previously served by alternate                  suppliers; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher                  PPL Gas Utilities revenues, primarily due to the increase in natural                  gas                  prices which are a pass-through to customer rates and an increase                  in                  volumes; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher                  revenues in Chile primarily due to a 7.8% and 7.6% increase in                  sales                  volumes for the three and six months ended June 30, 2005, compared                  with                  the same periods in 2004, and higher average prices overall;                  and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher                  U.K. revenues, primarily due to the change in foreign currency                  exchange                  rates and an increase in unit prices effective April 1, 2005, partially                  offset by a reduction in certain charges which had been a pass-through                  to                  customer rates. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Energy        Related Businesses**

| ·   | an                  aggregate increase of $3 million from domestic subsidiaries, including                  PPL                  Telcom, the energy services subsidiaries and a pipeline subsidiary;                  and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                  aggregate increase of $2 million from various international subsidiary                  businesses; offset by |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | additional                  pre-tax losses in 2005 of $5 million on synfuel projects. This                  reflects                  $11 million of additional expenses due to higher production levels,                  offset                  by a $6 million unrealized gain on options purchased to hedge the                  risk                  associated with synthetic fuel tax credits for 2006 and                  2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $15 million pre-tax loss in 2004, related to the sale of CGE (see                  Note 8                  to the Financial Statements); |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                  aggregate increase of $4 million from various international subsidiary                  businesses; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $2 million increase from PPL Telcom due to an increase in                  transport-related sales, as well as reduced spending on a product                  line;                  and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $3 million increase from energy services subsidiaries due to a                  favorable                  closeout on a major project, improved margins and an increase in                  business;                  partially offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | additional                  pre-tax losses in 2005 of $11 million on synfuel projects. This                  reflects                  $17 million of additional expenses due to higher production levels,                  offset                  by a $6 million unrealized gain on options purchased to hedge the                  risk                  associated with synthetic fuel tax credits for 2006 and                  2007. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other        Operation and Maintenance**

|                                                                           |   | **June                  30, 2005 vs. June 30, 2004** |   |
|--------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                           |   |                                                 |   |
|                                                                           |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                           |   |                                                 |   |   |   |   |
| Increase                  in domestic and international pension costs          |   | $                                                    | 14     |   |   | $ | 28 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Outage                  costs at the Colstrip Unit 2 and Corette facilities    |   |                                                 | 3      |   |   |   | 4 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Increase                  in foreign currency exchange rates                   |   |                                                 | 1      |   |   |   | 3 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Gain                  on sales of emission allowances                          |   |                                                 | (4     | ) |   |   | (11 | ) |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Costs                  associated with severe ice storms in January 2005       |   |                                                 | (1     | ) |   |   | 18 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Accelerated                  amortization of stock-based compensation (Note 2) |   |                                                 | 1      |   |   |   | 18 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| NorthWestern                  litigation accrual (Note 9)                      |   |                                                 |   |   |   |   | 9 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Reduction                  in WPD costs that are a pass-through to customers   |   |                                                 | (1     | ) |   |   | (6 | ) |
|                                                                           |   |                                                 |   |   |   |   |
|                                                                           |   | $                                                    | 13     |   |   | $ | 63 |   |
|                                                                           |   |                                                 |   |   |   |   |

**Depreciation**

|                                                                                                                                  |   | **June                  30, 2005 vs. June 30, 2004** |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                  |   |                                                 |   |
|                                                                                                                                  |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |
| Lower                  Mt. Bethel generation facility, which began commercial operation                  in May                  2004 |   | $                                                    | 2      |   |   | $ | 6 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Other                  additions to PP&E                                                                                          |   |                                                 | 3      |   |   |   | 7 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Foreign                  currency exchange rates                                                                                      |   |                                                 | 2      |   |   |   | 3 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Extension                  of useful lives of certain fossil generation assets (Note                  2)                              |   |                                                 | (2     | ) |   |   | (5 | ) |
|                                                                                                                                  |   |                                                 |   |   |   |   |
|                                                                                                                                  |   | $                                                    | 5      |   |   | $ | 11 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |

**Taxes,        Other Than Income**

**Other        Income - net**

**Interest        Expense**

|                                                                                                                                                                                                                    |   | **June                  30, 2005 vs. June 30, 2004** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                                                                                                    |   |                                                 |   |
|                                                                                                                                                                                                                    |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |
| Interest                  expense related to the Lower Mt. Bethel generation facility, which                  began                  commercial operation in May 2004 (a)                                               |   | $                                                    | 5      |   |   | $ | 14 |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Increase                  in interest expense due to hedging activities accounted for under                  SFAS                  133, "Accounting for Derivative Instruments and Hedging                  Activities" |   |                                                 | 9      |   |   |   | 10 |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Interest                  accrued for PJM billing dispute (Note 9)                                                                                                                                                      |   |                                                 |   |   |   |   | 8 |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Increase                  in short-term debt interest expense                                                                                                                                                           |   |                                                 | 1      |   |   |   | 3 |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Increase                  in foreign currency exchange rates                                                                                                                                                            |   |                                                 | 2      |   |   |   | 3 |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Decrease                  in interest expense due to the repayment in June 2004 of financing                  related                  to the University Park generation facility (b)                                   |   |                                                 | (4     | ) |   |   | (7 | ) |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Financing                  costs associated with the repayment of the consolidated trust's                  debt for                  the University Park generation facility (b)                                       |   |                                                 | (6     | ) |   |   | (6 | ) |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Decrease                  in other long-term debt interest expense                                                                                                                                                      |   |                                                 | (15    | ) |   |   | (20 | ) |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |   |   |
| Other                                                                                                                                                                                                                   |   |                                                 |   |   |   |   | 1 |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |
|                                                                                                                                                                                                                    |   | $                                                    | (8     | ) |   | $ | 6 |   |
|                                                                                                                                                                                                                    |   |                                                 |   |   |   |   |

| (a) |   | Prior                  to commercial operation, interest related to the Lower Mt. Bethel                  financing was capitalized as part of the cost of the                  facility.                                                                                                                                                                                                                                                                                                                                       |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | In                  June 2004, a subsidiary of PPL Energy Supply purchased the University                  Park                  generation facility from the lessor that was consolidated by PPL                  Energy                  Supply under FIN 46 (revised December 2003), "Consolidation of                  Variable                  Interest Entities, an Interpretation of ARB No. 51." In connection                  with                  the purchase, the related financing was                  repaid. |

**Income        Taxes**

| ·   | tax                  benefits of $15 million and $25 million for the three and six months                  ended                  June 30, 2005, related to additional nonconventional fuel tax credits                  in                  excess of credits recognized for the same periods in                  2004; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $5 million increase and a $2 million decrease in tax expense on                  foreign                  earnings for the three and six months ended June 30, 2005, relative                  to the                  same periods in 2004; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $17 million increase and a $6 million decrease in income tax expense                  due                  to higher pre-tax book income for the three months and lower pre-tax                  book                  income for the six months ended June 30, 2005, relative to                  2004. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Discontinued        Operations**

**Financial        Condition**

**Liquidity**

| ·   | the                  retirement of $907 million of long-term                  debt; |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | the                  payment of $166 million of common and preferred                  dividends; |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | a                  $49 million net increase in restricted cash;                  and |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | $359                  million of capital expenditures; offset                  by |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | $614                  million of cash provided by operating                  activities; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | the                  issuance of $224 million of tax-exempt long-term debt at PPL                  Electric; |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | $190                  million of proceeds from the sale of the Sundance generation plant;                  and |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | a                  $128 million net increase in short-term                  debt. |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | WPDH                  Limited to BBB- from BBB |
|--------------------|------------------------------------------------|

| ·   | WPD                  LLP to BBB from BBB+ |
|--------------------|-------------------------------------------|

| ·   | WPD                  (South West) and WPD (South Wales) to BBB+/F2 from                  A-/F1 |
|--------------------|------------------------------------------------------------------------------------------------|

**Capital        Expenditure Requirements**

|   |                                                      | **Projected**                                            |   |
|--------|-----------------------------------------------------------|----------------------------------------------------------|--------|
|   |                                                      |                                                     |   |
|   |                                                      | **2005**                                                 |   | **2006** |   | **2007** |   | **2008** |   | **2009** |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |
|   | Generating                  facilities                    |                                                     | $      | 195 |   | $ | 231 |   | $ | 208 |   | $ | 150 |   | $ | 138 |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Transmission                  and distribution facilities |                                                     |   | 481 |   |   | 505 |   |   | 521 |   |   | 511 |   |   | 532 |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Environmental                                             |                                                     |   | 53 |   |   | 349 |   |   | 500 |   |   | 376 |   |   | 150 |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Other                                                     |                                                     |   | 73 |   |   | 77 |   |   | 56 |   |   | 30 |   |   | 9 |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |
|   |                                                      | Total                  Construction Expenditures (a) (b) |   |   | 802 |   |   | 1,162 |   |   | 1,285 |   |   | 1,067 |   |   | 829 |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Nuclear                  fuel                             |                                                     |   | 68 |   |   | 69 |   |   | 76 |   |   | 76 |   |   | 78 |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |
|   |                                                      | Total                  Capital Expenditures              |   | $ | 870 |   | $ | 1,231 |   | $ | 1,361 |   | $ | 1,143 |   | $ | 907 |   |
|   |                                                      |                                                     |   |   |   |   |   |   |   |   |   |

| (a) |   | Construction                  expenditures include AFUDC and capitalized interest, which are                  expected to                  be less than $19 million in each of the years                  2005-2009. |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | This                  information excludes any potential investments by PPL Global and                  PPL                  Development Company for new                  projects.                                  |

**Risk        Management - Energy Marketing & Trading and Other **

*Commodity        Price Risk (Non-Trading)*

|                                                                                                 |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                                                 |   |                                                                 |   |   |                                                               |   |
|                                                                                                 |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the beginning of the                  period |   | $                                                                    | (106   | )      |                                                               | $      | 85 |   |   | $ | (11 | ) |   | $ | 86 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Contracts                  realized or otherwise settled during the period                           |   |                                                                 | (16    | )      |                                                               |   | (21 | ) |   |   | (23 | ) |   |   | (45 | ) |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of new contracts at inception                                            |   |                                                                 | 13     |   |                                                               |   |   |   |   |   | 13 |   |   |   |   |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  changes in fair values                                                        |   |                                                                 | (20    | )      |                                                               |   | 24 |   |   |   | (108 | ) |   |   | 47 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period                        |   | $                                                                    | (129   | )      |                                                               | $      | 88 |   |   | $ | (129 | ) |   | $ | 88 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                                                          |   | **Fair                  Value of Contracts at Period-End****Gains                  (Losses)** |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|
|                                                                          |   |                                                                                          |   |
|                                                                          |   | **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                  actively quoted                                       |   | $                                                                                             | 11     |   |   | $ | 15 |   |   | $ | 4 |   |   |   |   |   |   | $ | 30 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  provided by other external sources                    |   |                                                                                          | (9     | ) |   |   | (127 | ) |   |   | (23 | ) |   |   |   |   |   |   | (159 | ) |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  based on models and other valuation methods           |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period |   | $                                                                                             | 2      |   |   | $ | (112 | ) |   | $ | (19 | ) |   |   |   |   |   | $ | (129 | ) |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Commodity        Price Risk (Trading)*

|                                                                                                 |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                                                 |   |                                                                 |   |   |                                                               |   |
|                                                                                                 |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the beginning of the                  period |   | $                                                                    | 16     |   |                                                               | $      | 11 |   |   | $ | 10 |   |   | $ | 3 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Contracts                  realized or otherwise settled during the period                           |   |                                                                 | (3     | )      |                                                               |   | (4 | ) |   |   | (7 | ) |   |   | (7 | ) |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of new contracts at inception                                            |   |                                                                 | 1      |   |                                                               |   |   |   |   |   | 4 |   |   |   | 4 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  changes in fair values                                                        |   |                                                                 | (3     | )      |                                                               |   | 5 |   |   |   | 4 |   |   |   | 12 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period                        |   | $                                                                    | 11     |   |                                                               | $      | 12 |   |   | $ | 11 |   |   | $ | 12 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                                                          |   | **Fair                  Value of Contracts at Period-End****Gains                  (Losses)** |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|
|                                                                          |   |                                                                                          |   |
|                                                                          |   | **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                  actively quoted                                       |   | $                                                                                             | 1      |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 1 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  provided by other external sources                    |   |                                                                                          | 7      |   |   | $ | 3 |   |   | $ | (1 | ) |   |   |   |   |   |   | 9 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  based on models and other valuation methods           |   |                                                                                          |   |   |   |   | 1 |   |   |   |   |   |   |   |   |   |   |   | 1 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period |   | $                                                                                             | 8      |   |   | $ | 4 |   |   | $ | (1 | ) |   |   |   |   |   | $ | 11 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Interest        Rate Risk*

*Foreign        Currency Risk*

*Nuclear        Decommissioning Fund - Securities Price Risk*

*Synthetic        Fuel Tax Credit Risk*

**Related        Party Transactions**

**Acquisitions,        Development and Divestitures**

**Environmental        Matters**

**New        Accounting Standards**

**Application        of Critical Accounting Policies**

----

**PPL        ENERGY SUPPLY, LLC AND SUBSIDIARIES**

**Item        2. Management's Discussion and Analysis of Financial Condition and Results        of        Operations**

**Overview**

**Results        of Operations**

**Earnings**

|   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|   |                                                                 |   |   |                                                               |   |
|   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|   | $                                                                    | 104    |   |                                                               | $      | 157 |   |   | $ | 259 |   |   | $ | 303 |   |

|                           |                                                   | **June                  30, 2005 vs. June 30, 2004**                  |   |
|--------------------------------|--------------------------------------------------------|-----------------------------------------------------------------------|--------|
|                           |                                                   |                                                                  |   |
|                           |                                                   | **Three                  Months****Ended**                            |   |   | **Six                  Months****Ended** |   |
|                           |                                                   |                                                                  |   |   |   |   |
| Domestic:                      |                                                   |                                                                  |   |   |   |   |   |   |
|                           |                                                   |                                                                  |   |   |   |   |   |   |
|                           | Eastern                  U.S. non-trading margins      |                                                                  | $      | (5 | ) |   | $ | 10 |   |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Northwestern                  U.S. non-trading margins |                                                                  |   | 3 |   |   |   | (5 | ) |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Southwestern                  U.S. non-trading margins |                                                                  |   | (2 | ) |   |   | (3 | ) |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Net                  energy trading margins            |                                                                  |   | (4 | ) |   |   | 2 |   |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Interest                  expense                      |                                                                  |   | 3 |   |   |   | (6 | ) |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Operation                  and maintenance expenses    |                                                                  |   | (3 | ) |   |   | (5 | ) |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Earnings                  from synfuel projects        |                                                                  |   | 12 |   |   |   | 19 |   |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Other                                                  |                                                                  |   | 2 |   |   |   | (2 | ) |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | Total                  Domestic                                       |   |   | 6 |   |   |   | 10 |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
| International:                 |                                                   |                                                                  |   |   |   |   |   |   |
|                           |                                                   |                                                                  |   |   |   |   |   |   |
|                           | U.K.                                                   |                                                                  |   |   |   |   |   |   |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | Delivery                  margins                                     |   |   | 3 |   |   |   |   |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | Operation                  and maintenance expenses                   |   |   | (3 | ) |   |   | (8 | ) |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | Interest                  expense                                     |   |   | 2 |   |   |   | 2 |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | Impact                  of changes in foreign currency exchange rates |   |   | 2 |   |   |   | 5 |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | U.K.                  income taxes                                    |   |   | 1 |   |   |   | 3 |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           | Latin                  America                         |                                                                  |   |   |   |   |   | 2 |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           | U.S.                  income taxes                     |                                                                  |   | 3 |   |   |   | 9 |   |
|                           |                                                   |                                                                  |   |   |   |   |   |   |   |
|                           | Other                                                  |                                                                  |   | 2 |   |   |   | 3 |   |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | Total                  International                                  |   |   | 10 |   |   |   | 16 |   |
|                           |                                                   |                                                                  |   |   |   |   |
| Unusual                  items |                                                   |                                                                  | (69    | ) |   |   | (70 | ) |
|                           |                                                   |                                                                  |   |   |   |   |
|                           |                                                   | $                                                                     | (53    | ) |   | $ | (44 | ) |
|                           |                                                   |                                                                  |   |   |   |   |

|                                                                                                                 |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |    |
|----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|---------|
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |
|                                                                                                                 |   | **2005**                                                             |   |   | **2004**                                                           |    |   | **2005** |   |   | **2004** |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| **Supply                  Segment**                                                                                  |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| Sale                  of the Sundance plant (Note 8)                                                                 |   | $                                                                    | (47    | )      |                                                               |    |   |   |   | $ | (47 | ) |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| Acceleration                  of stock-based compensation expense for periods prior to 2005(Note                  2) |   |                                                                 |   |   |                                                               |    |   |   |   |   | (3 | ) |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| NorthWestern                  litigation (Note 9)                                                                    |   |                                                                 |   |   |                                                               |    |   |   |   |   | (6 | ) |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |
|                                                                                                                 |   |                                                                 |   | (47    | )                                                                  |    |   |   |   |   |   | (56 | ) |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| **International                  Delivery Segment**                                                                  |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| Sale                  of CGE (Note 8)                                                                                |   |                                                                 |   |   |                                                               |  $ | 1 |   |   |   |   |   |   |  $ | (7 | ) |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| Sale                  of CEMAR (Note 8)                                                                              |   |                                                                 |   |   |                                                               |    | 23 |   |   |   |   |   |   |   | 23 |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |   |   |   |   |
| Sale                  of Latin American telecommunications company (Note 8)                                          |   |                                                                 |   |   |                                                               |    | (2 | ) |   |   |   |   |   |   | (2 | ) |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   | 22 |   |   |   |   |   |   |   | 14 |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |
| Total                                                                                                                |   | $                                                                    | (47    | )      |                                                               | $       | 22 |   |   | $ | (56 | ) |   | $ | 14 |   |
|                                                                                                                 |   |                                                                 |   |   |                                                               |    |   |   |   |   |   |   |

| ·   | PPL                  Energy Supply's future energy margins will be impacted by changes                  in                  market prices for electricity, as well as fluctuations in fuel                  prices,                  fuel transportation costs and emission allowance expenses. For                  instance,                  although PPL Energy Supply expects market prices for electricity                  in 2005                  to be higher than in 2004, PPL Energy Supply is not expecting an                  increase                  in its 2005 energy margins due to expected increases in the cost                  of fuel,                  fuel transportation and emissions                  allowances. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                  key part of PPL Energy Supply's overall strategy has been to enter                  into                  long-term energy supply agreements in order to mitigate market                  price and                  supply risk. Whether PPL Energy Supply continues to enter into                  such                  agreements or renews existing energy supply agreements and the                  market                  conditions at that time will affect its future earnings. For example,                  based on current forward energy prices, PPL Energy Supply currently                  expects that, upon the expiration of certain of its existing supply                  agreements, it may be able to enter new supply agreements or arrangements                  at significantly higher market prices than the prices included                  in those                  existing supply agreements. See "Energy Purchases, Energy Sales                  and Other                  Commitments" in Note 9 to the Financial Statements for more information                  regarding PPL Energy Supply's wholesale energy commitments and                  "PLR                  Contracts" in Note 10 for more information regarding the PLR                  contracts. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  Electric has agreed to provide electricity supply to its PLR customers                  at                  predetermined rates through 2009 and has entered into PUC-approved,                  full                  requirements energy supply agreements with PPL EnergyPlus to fulfill                  its                  PLR obligation. The predetermined charges for generation supply                  which PPL                  Electric collects from its PLR customers and pays to PPL EnergyPlus                  under                  the energy supply agreements provide for annual increases in each                  year                  commencing in 2006 and continuing through 2009. PPL Electric's                  PLR                  obligation after 2009 will be determined by the PUC pursuant to                  rules that                  have not yet been promulgated. See Note 10 to the Financial Statements                  for                  more information regarding the PLR                  contracts. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Due                  to current electricity and natural gas price levels, there is a                  risk that                  PPL Energy Supply may be unable to recover its investment in certain                  gas-fired generation facilities. Under GAAP, PPL Energy Supply                  does not                  believe that there is an impairment charge to be recorded for these                  facilities at this time. PPL Energy Supply is unable to predict                  the                  earnings impact of this issue, based upon future energy and fuel                  price                  levels, applicable accounting rules and other factors, but such                  impact may                  be material. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  May 2005, a subsidiary of PPL Generation completed the sale of                  its 450 MW                  Sundance power plant located in Pinal County, Arizona to Arizona                  Public                  Service Company for approximately $190 million in cash. Proceeds                  of the                  sale were used to reduce PPL Energy Supply's outstanding debt and                  improve                  liquidity. PPL Energy Supply recognized a non-cash loss on the                  sale of                  approximately $47 million after tax in the second quarter of 2005                  related                  to this transaction. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  Energy Supply's ability to manage operational risk with respect                  to its                  generation plants is critical to its financial performance. Specifically,                  depending on the timing and duration of both planned and unplanned                  outages                  (in particular, if such outages are during peak periods or during                  periods                  of, or caused by, severe weather), PPL Energy Supply's revenue                  from energy                  sales could be adversely affected and its need to purchase power                  at                  then-current market prices to satisfy its energy commitments could                  be                  significantly increased. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  Energy Supply has interests in two synthetic fuel facilities and                  receives                  tax credits pursuant to Section 29 of the Internal Revenue Code                  based on                  its sale of synthetic fuel to unaffiliated third-party purchasers.                  PPL                  Energy Supply has estimated that these facilities will contribute                  approximately $40 million per year to earnings through 2007, when                  the                  availability of such tax credits is scheduled to expire. See "IRS                  Synthetic Fuels Tax Credits" in Note 9 to the Financial Statements                  for a                  discussion of the requirements to receive the Section 29 tax credits                  and                  the impact of higher oil prices on the Section 29 tax credits.                  Also see                  "Risk Management - Energy Marketing & Trading and Other - Synthetic                  Fuel Tax Credit Risk" for a discussion of PPL Energy Supply's risk                  management activities to mitigate the impact of a potential phase-out                  of                  the synthetic fuel tax credit due to high oil prices. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | To                  comply with existing and future environmental requirements and                  as a result                  of voluntary pollution control measures it may take, PPL Energy                  Supply                  expects to spend significant amounts on environmental control and                  compliance in the future. The costs of such measures, in most cases,                  are                  not now determinable with certainty. For instance, PPL Energy Supply's                  current cost estimates for sulfur dioxide reduction at its generating                  plants are preliminary and PPL Energy Supply could incur significantly                  higher capital and operating expenses due to more stringent environmental                  requirements, changing market conditions with respect to the cost                  of                  pollution control equipment or emissions allowances, delays in                  the                  installation of pollution control equipment or other factors. See                  "Environmental Matters - Domestic" in Note 9 to the Financial Statements                  for more information regarding current environmental requirements                  and                  initiatives, including those relating to air emissions, and PPL                  Energy                  Supply's anticipated capital expenditure program to meet the sulfur                  dioxide reduction requirements of the Clean Air Act. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  May 2005, PPL Energy Supply and NorthWestern reached an agreement                  in                  principle to settle litigation described under "NorthWestern Corporation                  Litigation" in Note 9 to the Financial Statements. See Note 9 for                  more                  information regarding this matter, including the agreement in principle                  and the status of the settlement discussions. PPL Energy Supply                  recognized                  a charge of $6 million after tax, in the first quarter of 2005                  for a loss                  contingency related to this matter. PPL Energy Supply cannot be                  certain of                  the outcome of this matter. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Earnings                  in 2005 and beyond are expected to continue to be adversely affected                  by                  increased pension costs. Specifically, WPD will experience increased                  pension costs due to a recent actuarial valuation of WPD's plans                  that                  reflects higher pension obligations. The increase in pension costs                  in 2005                  is forecasted to be approximately $24 million, after tax, and the                  increase                  in pension costs is expected to continue to be significant in 2006.                  An                  additional $4 million of expense, after tax, was recognized in                  the first                  quarter of 2005 related to termination benefits. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  Energy Supply is unable to predict whether future impairments of                  goodwill                  may be required for its domestic and international investments.                  While no                  goodwill impairments were required based on the annual review performed                  in                  the fourth quarter of 2004, future impairments may occur due to                  determinations of carrying value exceeding the fair value of these                  investments. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | From                  time to time, PPL Energy Supply and its subsidiaries are involved                  in                  negotiations with third parties regarding acquisitions and dispositions                  of                  businesses and assets. Any such transactions may impact future                  earnings. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | See                  Note 9 to the Financial Statements for other potential commitments                  and                  contingent liabilities that may impact future                  earnings. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | See                  Note 16 to the Financial Statements for new accounting standards                  that have                  been issued but not yet adopted by PPL Energy Supply that may impact                  future earnings. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Segment        Results **

|                                    |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|-----------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                    |   |                                                                 |   |   |                                                               |   |
|                                    |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Supply                                  |   | $                                                                    | 50     |   |                                                               | $      | 91 |   |   | $ | 143 |   |   | $ | 189 |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| International                  Delivery |   |                                                                 | 54     |   |                                                               |   | 66 |   |   |   | 116 |   |   |   | 114 |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                    | Total  |                                                                 | $      | 104    |                                                               |   | $ | 157 |   |   | $ | 259 |   |   | $ | 303 |   |
|                                    |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                               |                                      | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------|-------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                               |                                      |                                                                 |   |   |                                                               |   |
|                                               |                                      | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  revenues                   |                                      | $                                                                    | 662    |   |                                                               | $      | 671 |   |   | $ | 1,386 |   |   | $ | 1,395 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 142    |   |                                                               |   | 106 |   |   |   | 258 |   |   |   | 204 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating revenues |                                                                 |   | 804    |                                                               |   |   | 777 |   |   |   | 1,644 |   |   |   | 1,599 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fuel                  and energy purchases         |                                      |                                                                 | 308    |   |                                                               |   | 305 |   |   |   | 651 |   |   |   | 659 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  operation and maintenance   |                                      |                                                                 | 182    |   |                                                               |   | 176 |   |   |   | 380 |   |   |   | 355 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                       |                                      |                                                                 | 34     |   |                                                               |   | 34 |   |   |   | 68 |   |   |   | 66 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Taxes,                  other than income          |                                      |                                                                 | 11     |   |                                                               |   | 10 |   |   |   | 21 |   |   |   | 21 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 155    |   |                                                               |   | 118 |   |   |   | 288 |   |   |   | 228 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating expenses |                                                                 |   | 690    |                                                               |   |   | 643 |   |   |   | 1,408 |   |   |   | 1,329 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Other                  Income - net                |                                      |                                                                 | 7      |   |                                                               |   | 6 |   |   |   | 12 |   |   |   | 9 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                  |                                      |                                                                 | 19     |   |                                                               |   | 18 |   |   |   | 41 |   |   |   | 22 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                      |                                      |                                                                 | 2      |   |                                                               |   | 24 |   |   |   | 12 |   |   |   | 57 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Minority                  Interest                 |                                      |                                                                 | 1      |   |                                                               |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations |                                      |                                                                 | 49     |   |                                                               |   | 6 |   |   |   | 51 |   |   |   | 10 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                                     |                                                                 | $      | 50     |                                                               |   | $ | 91 |   |   | $ | 143 |   |   | $ | 189 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                                   |   | **June                  30, 2005 vs. June 30, 2004** |   |
|--------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                   |   |                                                 |   |
|                                                   |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                   |   |                                                 |   |   |   |   |
| Eastern                  U.S. non-trading margins      |   | $                                                    | (5     | ) |   | $ | 10 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Northwestern                  U.S. non-trading margins |   |                                                 | 3      |   |   |   | (5 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Southwestern                  U.S. non-trading margins |   |                                                 | (2     | ) |   |   | (3 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Net                  energy trading margins            |   |                                                 | (4     | ) |   |   | 2 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Interest                  expense                      |   |                                                 | 3      |   |   |   | (6 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Operation                  and maintenance expenses    |   |                                                 | (3     | ) |   |   | (5 | ) |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Earnings                  from synfuel projects        |   |                                                 | 12     |   |   |   | 19 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Other                                                  |   |                                                 | 2      |   |   |   | (2 | ) |
|                                                   |   |                                                 |   |   |   |   |
|                                                   | Total  |                                                 |   | 6 |   |   |   | 10 |   |
|                                                   |   |                                                 |   |   |   |   |   |   |
| Unusual                  items                         |   |                                                 | (47    | ) |   |   | (56 | ) |
|                                                   |   |                                                 |   |   |   |   |
|                                                   |   | $                                                    | (41    | ) |   | $ | (46 | ) |
|                                                   |   |                                                 |   |   |   |   |

| ·   | See                  "Domestic Gross Energy Margins" for an explanation of non-trading                  margins                  by geographic region and for an explanation of net energy trading                  margins. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Higher                  operation and maintenance expenses for the six months ended June                  30, 2005,                  was primarily due to accelerated amortization of stock-based compensation                  for retirement-eligible employees, which resulted from additional                  accounting guidance. See Note 2 to the Financial Statements for                  additional                  information. Also, expenses increased for both periods due to outage                  costs                  at the Colstrip Unit 2 and Corette                  facilities. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  improved earnings contribution from synfuel projects for both periods                  resulted primarily from the Tyrone facility that began commercial                  operation during the third quarter of                  2004. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |                                      | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------|-------------------------------------------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                               |                                      |                                                                 |   |   |                                                               |   |
|                                               |                                      | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Utility                  revenues                  |                                      | $                                                                    | 284    |   |                                                               | $      | 255 |   |   | $ | 577 |   |   | $ | 534 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 19     |   |                                                               |   | 17 |   |   |   | 37 |   |   |   | 34 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating revenues |                                                                 |   | 303    |                                                               |   |   | 272 |   |   |   | 614 |   |   |   | 568 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fuel                  and energy purchases         |                                      |                                                                 | 65     |   |                                                               |   | 51 |   |   |   | 128 |   |   |   | 105 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  operation and maintenance   |                                      |                                                                 | 61     |   |                                                               |   | 54 |   |   |   | 124 |   |   |   | 109 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                       |                                      |                                                                 | 39     |   |                                                               |   | 36 |   |   |   | 76 |   |   |   | 72 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Taxes,                  other than income          |                                      |                                                                 | 15     |   |                                                               |   | 13 |   |   |   | 29 |   |   |   | 27 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Energy                  related businesses         |                                      |                                                                 | 8      |   |                                                               |   | 6 |   |   |   | 13 |   |   |   | 27 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                  operating expenses |                                                                 |   | 188    |                                                               |   |   | 160 |   |   |   | 370 |   |   |   | 340 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Other                  Income - net                |                                      |                                                                 | 4      |   |                                                               |   | 22 |   |   |   | 7 |   |   |   | 28 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                  |                                      |                                                                 | 52     |   |                                                               |   | 53 |   |   |   | 102 |   |   |   | 102 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Income                  Taxes                      |                                      |                                                                 | 12     |   |                                                               |   | 13 |   |   |   | 30 |   |   |   | 35 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Minority                  Interest                 |                                      |                                                                 | 1      |   |                                                               |   | 1 |   |   |   | 3 |   |   |   | 3 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations |                                      |                                                                 |   |   |                                                               |   | 1 |   |   |   |   |   |   |   | 2 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|                                               | Total                                     |                                                                 | $      | 54     |                                                               |   | $ | 66 |   |   | $ | 116 |   |   | $ | 114 |   |
|                                               |                                      |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                               |                                                                  | **June                  30, 2005 vs. June 30, 2004** |   |
|------------------------------------|-----------------------------------------------------------------------|------------------------------------------------------|--------|
|                               |                                                                  |                                                 |   |
|                               |                                                                  | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                               |                                                                  |                                                 |   |   |   |   |
| U.K.                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Delivery                  margins                                     |                                                 | $      | 3 |   |   |   |   |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Operation                  and maintenance expenses                   |                                                 |   | (3 | ) |   | $ | (8 | ) |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Interest                  expense                                     |                                                 |   | 2 |   |   |   | 2 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | Impact                  of changes in foreign currency exchange rates |                                                 |   | 2 |   |   |   | 5 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
|                               | U.K.                  income taxes                                    |                                                 |   | 1 |   |   |   | 3 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| Latin                  America     |                                                                  |                                                 |   |   |   |   | 2 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| U.S.                  income taxes |                                                                  |                                                 | 3      |   |   |   | 9 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| Other                              |                                                                  |                                                 | 2      |   |   |   | 3 |   |
|                               |                                                                  |                                                 |   |   |   |   |
|                               | Total                                                                 |                                                 |   | 10 |   |   |   | 16 |   |
|                               |                                                                  |                                                 |   |   |   |   |   |   |
| Unusual                  items     |                                                                  |                                                 | (22    | ) |   |   | (14 | ) |
|                               |                                                                  |                                                 |   |   |   |   |
|                               |                                                                  | $                                                    | (12    | ) |   | $ | 2 |   |
|                               |                                                                  |                                                 |   |   |   |   |

| ·   | The                  U.K.'s earnings were positively impacted in both periods by favorable                  currency exchange rates, and higher delivery margins for the three                  months                  ended June 30, 2005, primarily due to favorable customer mix. These                  favorable variances were offset by higher operation and maintenance                  expenses, primarily due to increased pension costs in both                  periods. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | U.S.                  income taxes decreased primarily due to greater utilization of                  foreign tax                  credits in both periods. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Consolidated        **
**Statement        of Income Line Item Discussion -- **

**Domestic        Gross Energy Margins**

|                                                     |                                 | **June                  30, 2005 vs. June 30, 2004** |   |
|----------------------------------------------------------|--------------------------------------|------------------------------------------------------|--------|
|                                                     |                                 |                                                 |   |
|                                                     |                                 | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                     |                                 |                                                 |   |   |   |   |
| Wholesale                  energy marketing              |                                 | $                                                    | (14    | ) |   | $ | (23 | ) |
|                                                     |                                 |                                                 |   |   |   |   |   |   |
| Wholesale                  energy marketing to affiliate |                                 |                                                 | 18     |   |   |   | 23 |   |
|                                                     |                                 |                                                 |   |   |   |   |   |   |
| Unregulated                  retail electric             |                                 |                                                 | (6     | ) |   |   | (12 | ) |
|                                                     |                                 |                                                 |   |   |   |   |
| Net                  energy trading margins              |                                 |                                                 | (7     | ) |   |   | 3 |   |
|                                                     |                                 |                                                 |   |   |   |   |
| Other                  revenue adjustments (a)           |                                 |                                                 | 9      |   |   |   | 22 |   |
|                                                     |                                 |                                                 |   |   |   |   |
|                                                     | Total                  revenues      |                                                 |   |   |   |   |   | 13 |   |
|                                                     |                                 |                                                 |   |   |   |   |
| Fuel                                                     |                                 |                                                 | (17    | ) |   |   | 16 |   |
|                                                     |                                 |                                                 |   |   |   |   |   |   |
| Energy                  purchases                        |                                 |                                                 | 41     |   |   |   | 5 |   |
|                                                     |                                 |                                                 |   |   |   |   |   |   |
| Energy                  purchases from affiliate         |                                 |                                                 | (7     | ) |   |   | (6 | ) |
|                                                     |                                 |                                                 |   |   |   |   |   |   |
| Other                  cost adjustments (a)              |                                 |                                                 | (4     | ) |   |   | (8 | ) |
|                                                     |                                 |                                                 |   |   |   |   |
|                                                     | Total                  cost of sales |                                                 |   | 13 |   |   |   | 7 |   |
|                                                     |                                 |                                                 |   |   |   |   |
|                                                     |                                 | Domestic                  gross energy margins       |   | $ | (13 | ) |   | $ | 6 |   |
|                                                     |                                 |                                                 |   |   |   |   |

| (a) |   | Adjusted                  to exclude the impact of any revenues and costs not associated                  with                  domestic gross energy margins, in particular, revenues and energy                  costs                  related to the international operations of PPL Global. Also adjusted                  to                  include gains or losses on sales of emission allowances, which                  are                  included in "Other operation and maintenance" expenses on the Statement                  of                  Income. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |                                           | **June                  30, 2005 vs. June 30, 2004** |   |
|-------------------------------------|------------------------------------------------|------------------------------------------------------|--------|
|                                |                                           |                                                 |   |
|                                |                                           | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                |                                           |                                                 |   |   |   |   |
| Eastern                  U.S.       |                                           | $                                                    | (8     | ) |   | $ | 18 |   |
|                                |                                           |                                                 |   |   |   |   |   |   |
| Northwestern                  U.S.  |                                           |                                                 | 5      |   |   |   | (9 | ) |
|                                |                                           |                                                 |   |   |   |   |   |   |
| Southwestern                  U.S.  |                                           |                                                 | (3     | )  |   |   | (6 | )  |
|                                |                                           |                                                 |   |   |   |   |   |   |
| Net                  energy trading |                                           |                                                 | (7     | ) |   |   | 3 |   |
|                                |                                           |                                                 |   |   |   |   |
|                                | Domestic                  gross energy margins |                                                 | $      | (13 | )  |   | $ | 6 |   |

**Utility        Revenues**

|           |                                                   | **June                  30, 2005 vs. June 30, 2004** |   |
|----------------|--------------------------------------------------------|------------------------------------------------------|--------|
|           |                                                   |                                                 |   |
|           |                                                   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|           |                                                   |                                                 |   |   |   |   |
|           |                                                   |                                                 |   |   |   |   |   |   |
| International: |                                                   |                                                 |   |   |   |   |   |   |
|           |                                                   |                                                 |   |   |   |   |   |   |
|           | Retail                  electric delivery (PPL Global) |                                                 |   |   |   |   |   |   |   |
|           |                                                   |                                                 |   |   |   |   |   |   |
|           |                                                   | Chile                                                |   | $ | 14 |   |   | $ | 21 |   |
|           |                                                   |                                                 |   |   |   |   |   |   |
|           |                                                   | U.K.                                                 |   |   | 13 |   |   |   | 17 |   |
|           |                                                   |                                                 |   |   |   |   |   |   |
|           |                                                   | El                  Salvador                         |   |   | 2 |   |   |   | 5 |   |
|           |                                                   |                                                 |   |   |   |   |
|           |                                                   |                                                 | $      | 29 |   |   | $ | 43 |   |
|           |                                                   |                                                 |   |   |   |   |

| ·   | higher                  revenues in Chile primarily due to a 7.8% and 7.6% increase in                  sales                  volumes for the three and six months ended June 30, 2005, compared                  with                  the same periods in 2004, and higher average prices overall;                  and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher                  U.K. revenues, primarily due to the change in foreign currency                  exchange                  rates and an increase in unit prices effective April 1, 2005, partially                  offset by a reduction in certain charges which had been a pass-through                  to                  customer rates. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Energy        Related Businesses**

| ·   | an                  aggregate increase of $2 million from domestic subsidiaries, including                  the                  energy services subsidiaries and a pipeline subsidiary;                  and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                  aggregate increase of $2 million from various international subsidiary                  businesses; more than offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | additional                  pre-tax losses in 2005 of $5 million on synfuel projects. This                  reflects                  $11 million of additional expenses due to higher production levels,                  offset                  by a $6 million unrealized gain on options purchased to hedge the                  risk                  associated with synthetic fuel tax credits for 2006 and                  2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $15 million pre-tax loss in 2004, related to the sale of CGE (see                  Note 8                  to the Financial Statements); |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                  aggregate increase of $4 million from various international subsidiary                  businesses; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $3 million increase from energy services subsidiaries due to a                  favorable                  closeout on a major project, improved margins and an increase in                  business;                  partially offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | additional                  pre-tax losses in 2005 of $11 million on synfuel projects. This                  reflects                  $17 million of additional expenses due to higher production levels,                  offset                  by a $6 million unrealized gain on options purchased to hedge the                  risk                  associated with synthetic fuel tax credits for 2006 and                  2007. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other        Operation and Maintenance**

|                                                                           |   | **June                  30, 2005 vs. June 30, 2004** |   |
|--------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                           |   |                                                 |   |
|                                                                           |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                           |   |                                                 |   |   |   |   |
| Increase                  in domestic and international pension costs          |   | $                                                    | 12     |   |   | $ | 25 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Increase                  in allocation of corporate service costs (Note 10)   |   |                                                 | 4      |   |   |   | 10 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Outage                  costs at the Colstrip Unit 2 and Corette facilities    |   |                                                 | 3      |   |   |   | 4 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Increase                  in foreign currency exchange rates                   |   |                                                 | 1      |   |   |   | 3 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Accelerated                  amortization of stock-based compensation (Note 2) |   |                                                 | 1      |   |   |   | 13 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| NorthWestern                  litigation accrual (Note 9)                      |   |                                                 |   |   |   |   | 9 |   |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Reduction                  in WPD costs that are a pass-through to customers   |   |                                                 | (1     | ) |   |   | (6 | ) |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Gain                  on sales of emission allowances                          |   |                                                 | (4     | ) |   |   | (11 | ) |
|                                                                           |   |                                                 |   |   |   |   |   |   |
| Other                                                                          |   |                                                 | (3     | ) |   |   | (7 | ) |
|                                                                           |   |                                                 |   |   |   |   |
|                                                                           |   | $                                                    | 13     |   |   | $ | 40 |   |
|                                                                           |   |                                                 |   |   |   |   |

**Depreciation**

|                                                                                                                                  |   | **June                  30, 2005 vs. June 30, 2004** |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                  |   |                                                 |   |
|                                                                                                                                  |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |
| Lower                  Mt. Bethel generation facility, which began commercial operation                  in May                  2004 |   | $                                                    | 2      |   |   | $ | 6 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Other                  additions to PP&E                                                                                          |   |                                                 | 1      |   |   |   | 2 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Foreign                  currency exchange rates                                                                                      |   |                                                 | 2      |   |   |   | 3 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Extension                  of useful lives of certain fossil generation assets (Note                  2)                              |   |                                                 | (2     | ) |   |   | (5 | ) |
|                                                                                                                                  |   |                                                 |   |   |   |   |
|                                                                                                                                  |   | $                                                    | 3      |   |   | $ | 6 |   |
|                                                                                                                                  |   |                                                 |   |   |   |   |

**Other        Income - net**

**Interest        Expense**

|                                                                                                                                                                                  |   | **June                  30, 2005 vs. June 30, 2004** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                                                                  |   |                                                 |   |
|                                                                                                                                                                                  |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |
| Interest                  expense related to the Lower Mt. Bethel generation facility, which                  began                  commercial operation in May 2004 (a)             |   | $                                                    | 5      |   |   | $ | 14 |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Increase                  (decrease) in other long-term debt interest expense                                                                                                         |   |                                                 | (1     | ) |   |   | 3 |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Increase                  in interest expense with affiliate                                                                                                                          |   |                                                 | 2      |   |   |   | 6 |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Increase                  in short-term debt interest expense                                                                                                                         |   |                                                 | 1      |   |   |   | 3 |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Increase                  in foreign currency exchange rates                                                                                                                          |   |                                                 | 2      |   |   |   | 3 |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Decrease                  in interest expense due to the repayment in June 2004 of financing                  related                  to the University Park generation facility (b) |   |                                                 | (4     | ) |   |   | (7 | ) |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Financing                  costs associated with the repayment of the consolidated trust's                  debt for                  the University Park generation facility (b)     |   |                                                 | (6     | ) |   |   | (6 | ) |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |   |   |
| Other                                                                                                                                                                                 |   |                                                 | 1      |   |   |   | 3 |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |
|                                                                                                                                                                                  |   | $                                                    |   |   |   | $ | 19 |   |
|                                                                                                                                                                                  |   |                                                 |   |   |   |   |

| (a) |   | Prior                  to commercial operation, interest related to the Lower Mt. Bethel                  financing was capitalized as part of the cost of the                  facility.                                                                                                                                                                                                                                                                                                                                       |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | In                  June 2004, a subsidiary of PPL Energy Supply purchased the University                  Park                  generation facility from the lessor that was consolidated by PPL                  Energy                  Supply under FIN 46 (revised December 2003), "Consolidation of                  Variable                  Interest Entities, an Interpretation of ARB No. 51." In connection                  with                  the purchase, the related financing was                  repaid. |

**Income        Taxes**

| ·   | tax                  benefits of $15 million and $25 million for the three and six months                  ended                  June 30, 2005, related to additional nonconventional fuel tax credits                  in                  excess of credits recognized for the same periods in 2004; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                  $5 million increase and a $2 million decrease in tax expense on                  foreign                  earnings for the three and six months ended June 30, 2005, relative                  to the                  same periods in 2004; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreases                  of $16 million and $25 million in income tax expense due to lower                  pre-tax                  book income for the three and six months ended June 30, 2005, relative                  to                  the same periods in 2004. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Discontinued        Operations**

**Financial        Condition**

**Liquidity**

| ·   | the                  retirement of $208 million of foreign long-term                  debt; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | distributions                  to Member of $119 million; |
|--------------------|-----------------------------------------------------------|

| ·   | the                  retirement of $300 million in note payable to affiliate;                  and |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | $258                  million of capital expenditures; offset by |
|--------------------|------------------------------------------------------------------|

| ·   | $374                  million of cash provided by operating activities; |
|--------------------|-------------------------------------------------------------------------|

| ·   | $190                  million of proceeds from the sale of the Sundance generation plant;                  and |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | an                  $83 million net increase in short-term                  debt. |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | WPDH                  Limited to BBB- from BBB |
|--------------------|------------------------------------------------|

| ·   | WPD                  LLP to BBB from BBB+ |
|--------------------|-------------------------------------------|

| ·   | WPD                  (South West) and WPD (South Wales) to BBB+/F2 from                  A-/F1 |
|--------------------|------------------------------------------------------------------------------------------------|

**Capital        Expenditure Requirements**

|   |                                                      | **Projected**                                            |                                        |
|--------|-----------------------------------------------------------|----------------------------------------------------------|---------------------------------------------|
|   |                                                      |                                                     |                                        |
|   |                                                      | **2005**                                                 |                                        | **2006** |   | **2007** |   | **2008** |   | **2009** |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Generating                  facilities                    |                                                     | $                                           | 195 |   | $ | 231 |   | $ | 208 |   | $ | 150 |   | $ | 138 |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Transmission                  and distribution facilities |                                                     |                                        | 287 |   |   | 292 |   |   | 283 |   |   | 286 |   |   | 293 |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Environmental                                             |                                                     |                                        | 51 |   |   | 347 |   |   | 498 |   |   | 374 |   |   | 148 |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Other                                                     |                                                     |                                        | 37 |   |   | 52 |   |   | 38 |   |   | 17 |   |   | 18 |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |
|   |                                                      | Total                  Construction Expenditures (a) (b) |                                        |   | 570 |   |   | 922 |   |   | 1,027 |   |   | 827 |   |   | 597 |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Nuclear                  fuel                             |                                                     |                                        | 68 |   |   | 69 |   |   | 76 |   |   | 76 |   |   | 78 |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |
|   |                                                      |                                                     | Total                  Capital Expenditures |   | $ | 638 |   | $ | 991 |   | $ | 1,103 |   | $ | 903 |   | $ | 675 |   |
|   |                                                      |                                                     |                                        |   |   |   |   |   |   |   |   |

| (a) |   | Construction                  expenditures include capitalized interest, which is expected to                  be less                  than $16 million in each of the years 2005-2009. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | This                  information excludes any potential investments by PPL Global for                  new                  projects.                                                   |

**Risk        Management - Energy Marketing & Trading and Other **

*Commodity        Price Risk (Non-Trading)*

|                                                                                                 |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                                                 |   |                                                                 |   |   |                                                               |   |
|                                                                                                 |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the beginning of the                  period |   | $                                                                    | (106   | )      |                                                               | $      | 84 |   |   | $ | (9 | ) |   | $ | 86 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Contracts                  realized or otherwise settled during the period                           |   |                                                                 | (15    | )      |                                                               |   | (20 | ) |   |   | (24 | ) |   |   | (44 | ) |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of new contracts at inception                                            |   |                                                                 | 13     |   |                                                               |   |   |   |   |   | 13 |   |   |   |   |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  changes in fair values                                                        |   |                                                                 | (19    | )      |                                                               |   | 21 |   |   |   | (107 | ) |   |   | 43 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period                        |   | $                                                                    | (127   | )      |                                                               | $      | 85 |   |   | $ | (127 | ) |   | $ | 85 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                                                          |   | **Fair                  Value of Contracts at Period-End****Gains                  (Losses)** |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|
|                                                                          |   |                                                                                          |   |
|                                                                          |   | **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                  actively quoted                                       |   | $                                                                                             | 11     |   |   | $ | 15 |   |   | $ | 4 |   |   |   |   |   |   | $ | 30 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  provided by other external sources                    |   |                                                                                          | (8     | ) |   |   | (126 | ) |   |   | (23 | ) |   |   |   |   |   |   | (157 | ) |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  based on models and other valuation methods           |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period |   | $                                                                                             | 3      |   |   | $ | (111 | ) |   | $ | (19 | ) |   |   |   |   |   | $ | (127 | ) |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Commodity        Price Risk (Trading)*

|                                                                                                 |   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                                                                 |   |                                                                 |   |   |                                                               |   |
|                                                                                                 |   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the beginning of the                  period |   | $                                                                    | 16     |   |                                                               | $      | 11 |   |   | $ | 9 |   |   | $ | 3 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Contracts                  realized or otherwise settled during the period                           |   |                                                                 | (3     | )      |                                                               |   | (4 | ) |   |   | (6 | ) |   |   | (7 | ) |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of new contracts at inception                                            |   |                                                                 | 1      |   |                                                               |   |   |   |   |   | 4 |   |   |   | 4 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                  changes in fair values                                                        |   |                                                                 | (3     | )      |                                                               |   | 5 |   |   |   | 4 |   |   |   | 12 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period                        |   | $                                                                    | 11     |   |                                                               | $      | 12 |   |   | $ | 11 |   |   | $ | 12 |   |
|                                                                                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |

|                                                                          |   | **Fair                  Value of Contracts at Period-End****Gains                  (Losses)** |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|
|                                                                          |   |                                                                                          |   |
|                                                                          |   | **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                  actively quoted                                       |   | $                                                                                             | 1      |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 1 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  provided by other external sources                    |   |                                                                                          | 7      |   |   | $ | 3 |   |   | $ | (1 | ) |   |   |   |   |   |   | 9 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prices                  based on models and other valuation methods           |   |                                                                                          |   |   |   |   | 1 |   |   |   |   |   |   |   |   |   |   |   | 1 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of contracts outstanding at the end of the period |   | $                                                                                             | 8      |   |   | $ | 4 |   |   | $ | (1 | ) |   |   |   |   |   | $ | 11 |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Interest        Rate Risk*

*Foreign        Currency Risk*

*Nuclear        Decommissioning Fund - Securities Price Risk*

*Synthetic        Fuel Tax Credit Risk*

**Related        Party Transactions**

**Acquisitions,        Development and Divestitures**

**Environmental        Matters**

**New        Accounting Standards**

**Application        of Critical Accounting Policies**

----

**PPL        ELECTRIC UTILITIES CORPORATION AND SUBSIDIARIES**

**Item        2. Management's Discussion and Analysis of Financial Condition and Results        of        Operations**

**Overview**

**Results        of Operations**

**Earnings**

|   | **Three                  Months Ended****June                  30,** |   |   | **Six                  Months Ended****June                  30,** |   |
|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|   |                                                                 |   |   |                                                               |   |
|   | **2005**                                                             |   |   | **2004**                                                           |   |   | **2005** |   |   | **2004** |   |
|   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |
|   | $                                                                    | 36     |   |                                                               | $      | 3 |   |   | $ | 51 |   |   | $ | 36 |   |

|                                                                                                                                          |   | **June                  30, 2005 vs. June 30, 2004** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                          |   |                                                 |   |
|                                                                                                                                          |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |
| Delivery                  revenues (net of CTC/ITC amortization, interest expense on transition                  bonds and ancillary charges) |   | $                                                    | 30     |   |   | $ | 58 |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Operation                  and maintenance expenses                                                                                           |   |                                                 | 1      |   |   |   | (12 | ) |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Taxes,                  other than income (excluding gross receipts taxes)                                                                    |   |                                                 |   |   |   |   | (8 | ) |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Other                                                                                                                                         |   |                                                 | 2      |   |   |   | 6 |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |   |   |
| Unusual                  items                                                                                                                |   |                                                 |   |   |   |   | (29 | ) |
|                                                                                                                                          |   |                                                 |   |   |   |   |
|                                                                                                                                          |   | $                                                    | 33     |   |   | $ | 15 |   |
|                                                                                                                                          |   |                                                 |   |   |   |   |

|                                                                                                                 |   | **Six                  Months Ended****June                  30,** |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                                                                                                 |   |                                                               |   |
|                                                                                                                 |   | **2005**                                                           |   |   | **2004** |   |
|                                                                                                                 |   |                                                               |   |   |   |   |
|                                                                                                                 |   |                                                               |   |   |   |   |   |   |
| PJM                  billing dispute (Note 9)                                                                        |   | $                                                                  | (27    | ) |   |   |   |   |
|                                                                                                                 |   |                                                               |   |   |   |   |   |   |
| Acceleration                  of stock-based compensation expense for periods prior to 2005(Note                  2) |   |                                                               | (2     | ) |   |   |   |   |
|                                                                                                                 |   |                                                               |   |   |   |   |
| Total                                                                                                                |   | $                                                                  | (29    | ) |   |   |   |   |
|                                                                                                                 |   |                                                               |   |   |   |   |

| ·   | In                  December 2004, the PUC approved an increase in PPL Electric's distribution                  rates of approximately $137 million (based on a return on equity                  of                  10.7%), and approved PPL Electric's proposed mechanism for collecting                  an                  additional $57 million in transmission-related charges, for a total                  increase of approximately $194 million, effective January 1,                  2005. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | PPL                  Electric has agreed to provide electricity supply to its PLR customers                  at                  predetermined rates through 2009 and has entered into PUC-approved,                  full                  requirements energy supply agreements with PPL EnergyPlus to fulfill                  its                  PLR obligation. The predetermined charges for generation supply                  which PPL                  Electric collects from its PLR customers and pays to PPL EnergyPlus                  under                  the energy supply agreements provide for annual increases in each                  year                  commencing in 2006 and continuing through 2009. PPL Electric's                  PLR                  obligation after 2009 will be determined by the PUC pursuant to                  rules that                  have not yet been promulgated. See Note 10 to the Financial Statements                  for                  more information regarding the PLR                  contracts. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                  January 2005, severe ice storms hit PPL Electric's service territory.                  PPL                  Electric had to restore service to approximately 238,000 customers.                  Although the actual cost of these storms and the specific allocation                  of                  such cost between operation and maintenance expense and capital                  costs is                  not yet finalized, PPL Electric currently estimates a total cost                  of $21                  million, with approximately $18 million being recorded as an expense                  on                  PPL Electric's income statement for the six months ended June 30,                  2005. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | As                  a result of the Order issued by the FERC in connection with the                  litigation                  described under "PJM Billing" in Note 9 to the Financial Statements,                  PPL                  Electric recognized an after-tax charge of $27 million in the first                  quarter of 2005 for a loss contingency related to the litigation.                  PPL                  Electric cannot be certain of the outcome and impact of this                  matter. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | See                  Note 9 to the Financial Statements for other potential commitments                  and                  contingent liabilities that may impact future                  earnings. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | See                  Note 16 to the Financial Statements for new accounting standards                  that have                  been issued but not yet adopted by PPL Electric that may impact                  future                  earnings. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Operating        Revenues**

|                                            |   | **June                  30, 2005 vs. June 30, 2004** |   |
|-------------------------------------------------|--------|------------------------------------------------------|--------|
|                                            |   |                                                 |   |
|                                            |   | **Three                  Months****Ended**           |   |   | **Six                  Months****Ended** |   |
|                                            |   |                                                 |   |   |   |   |
| Electric                  delivery              |   | $                                                    | 50     |   |   | $ | 82 |   |
|                                            |   |                                                 |   |   |   |   |
| PLR                  electric generation supply |   |                                                 | 25     |   |   |   | 41 |   |
|                                            |   |                                                 |   |   |   |   |
| Other                                           |   |                                                 | (6     | ) |   |   | (6 | ) |
|                                            |   |                                                 |   |   |   |   |
|                                            |   | $                                                    | 69     |   |   | $ | 117 |   |
|                                            |   |                                                 |   |   |   |   |

**Energy        Purchases**

**Energy        Purchases from Affiliate**

**Other        Operation and Maintenance**

**Taxes,        Other Than Income**

**Other        Income - net**

**Interest        Expense**

**Income        Taxes**

**Financial        Condition**

**Liquidity**

| ·   | the                  retirement of $380 million of long-term                  debt; |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | the                  payment of $27 million of common and preferred dividends; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | a                  $53 million increase in restricted cash;                  and |
|--------------------|----------------------------------------------------------------------------------|

| ·   | $85                  million of capital expenditures; partially offset                  by |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | $174                  million of cash provided by operating                  activities; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | the                  issuance of $224 million of tax-exempt long-term debt;                  and |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | a                  $45 million net increase in short-term                  debt. |
|--------------------|----------------------------------------------------------------------------------|

**Risk        Management**

*Commodity        Price Risk - PLR Contracts*

*Interest        Rate Risk*

**Related        Party Transactions**

**Environmental        Matters**

**New        Accounting Standards**

**Application        of Critical Accounting Policies**

----

**PPL        CORPORATION**

**PPL        ENERGY SUPPLY, LLC**

**PPL        ELECTRIC UTILITIES CORPORATION**

**Item        3. Quantitative and Qualitative Disclosures About Market        Risk**

| **Item                  4. Controls and Procedures** |
|------------------------------------------------------|
|                                                 |
| (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,                  2005, the registrants' disclosure controls and procedures are adequate                  and                  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                  chief                  executive and chief 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. |

**PART        II. OTHER INFORMATION**

| **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                  2004 Form 10-K; and |
|                                                                                                                                                                                                                                                                                                                             |   |   |
|  ·                                                                                                                                                                                                                                                                                                                     |   | Note                  9 of the registrants' "Combined Notes to Condensed Consolidated                  Financial                  Statements" in Part I of this report. |
|                                                                                                                                                                                                                                                                                                                             |   |   |

| **Item                  4. Submission of Matters to a Vote of Security                  Holders**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| At                  PPL's Annual Meeting of Shareowners held on April 22, 2005, the                  shareowners:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (1) |   | Elected                  the three nominees for the office of director. The votes for individual                  nominees were as follows: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | **Number                  of Votes** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | **For** |   | **Withhold                  Authority** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Frederick                  M. Bernthal |   | 150,532,951 |   | 5,231,806 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | John                  R. Biggar |   | 142,590,458 |   | 13,174,299 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Louise                  K. Goeser |   | 150,413,853 |   | 5,350,904 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (2) |   | Ratified                  the appointment of PricewaterhouseCoopers LLP as independent auditor                  for                  the year ending December 31, 2005. The vote was 152,100,429                  in                  favor and 2,300,868                  against,                  with 1,363,460                  abstaining. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |
| At                  PPL Electric's Annual Meeting of Shareowners held on April 19,                  2005, the                  shareowners elected all ten nominees for the office of director.                  John R.                  Biggar, Paul T. Champagne, Dean A. Christiansen, Robert J. Grey,                  William                  F. Hecht, Rick L. Klingensmith, James H. Miller, Roger L. Petersen,                  Bryce                  L. Shriver and John F. Sipics were elected with 78,029,863 votes                  cast for                  each director, no votes cast against and no votes abstaining.  |

| **Item                      6. Exhibits**                                                                                                                                                                                                                                     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                          |   |   |
| 4(a)                                                                                                                                                                                                                                                                          | - | Supplement                  dated as of May 1, 2005 to Mortgage and Deed of Trust, dated as                  of October                  1, 1945, between PPL Electric Utilities Corporation and Deutsche                  Bank                  Trust Company Americas (as successor Trustee) |
| 4(b)                                                                                                                                                                                                                                                                          | - | Supplement                  dated as of May 1, 2005 to Indenture, dated as of August 1, 2001,                  by PPL                  Electric Utilities Corporation and JPMorgan Chase Bank (formerly                  The Chase                  Manhattan Bank), as Trustee |
| 4(c)                                                                                                                                                                                                                                                                          | - | Amendment                  No. 5 dated May 4, 2005 to Amended and Restated Employee Stock                  Ownership                  Plan, dated June 12, 2000 |
| 10(a)                                                                                                                                                                                                                                                                         | - | Pollution                  Control Facilities Loan Agreement, dated as of May 1, 2005, between                  PPL                  Electric Utilities Corporation and the Lehigh County Industrial                  Development Authority |
| 10(b)                                                                                                                                                                                                                                                                         | - | First                  Amendment dated as of June 16, 2005 to Reimbursement Agreement,                  dated as                  of March 31, 2005, among PPL Energy Supply, LLC, The Bank of Nova                  Scotia,                  as Issuer and Administrative Agent, and the Lenders party thereto                  from                  time to time |
| 10(c)                                                                                                                                                                                                                                                                         | - | $800                  million Amended and Restated Five-Year Credit Agreement dated as                  of June                  22, 2005, among PPL Energy Supply, LLC, as Borrower, and the banks                  named                  therein |
| 10(d)                                                                                                                                                                                                                                                                         | - | $600                  million Five-Year Credit Agreement dated as of June 22, 2005, among                  PPL                  Energy Supply, LLC, as Borrower, and the banks named                  therein |
| 10(e)                                                                                                                                                                                                                                                                         | - | $200                  million Amended and Restated Five-Year Credit Agreement dated as                  of June                  22, 2005, among PPL Electric Utilities Corporation, as Borrower,                  and the                  banks named therein |
| 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 Fixed Charges |
|                                                                                                                                                                                                                                                                          |   |   |
| Certifications                  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, for                  the                  quarterly period ended June 30, 2005, filed by the following officers                  for                  the following companies:     |
| 31(a)                                                                                                                                                                                                                                                                         | - | William                  F. Hecht for PPL Corporation |
| 31(b)                                                                                                                                                                                                                                                                         | - | John                  R. Biggar for PPL Corporation |
| 31(c)                                                                                                                                                                                                                                                                         | - | William                  F. Hecht for PPL Energy Supply, LLC |
| 31(d)                                                                                                                                                                                                                                                                         | - | Paul                  A. Farr for PPL Energy Supply, LLC |
| 31(e)                                                                                                                                                                                                                                                                         | - | John                  F. Sipics for PPL Electric Utilities Corporation |
| 31(f)                                                                                                                                                                                                                                                                         | - | Paul                  A. Farr for PPL Electric Utilities Corporation |
|                                                                                                                                                                                                                                                                          |   |   |
| Certifications                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for                  the                  quarterly period ended June 30, 2005, furnished by the following                  officers                  for the following companies: |
| 32(a)                                                                                                                                                                                                                                                                         | - | William                  F. Hecht for PPL Corporation |
| 32(b)                                                                                                                                                                                                                                                                         | - | John                  R. Biggar for PPL Corporation |
| 32(c)                                                                                                                                                                                                                                                                         | - | William                  F. Hecht for PPL Energy Supply, LLC |
| 32(d)                                                                                                                                                                                                                                                                         | - | Paul                  A. Farr for PPL Energy Supply, LLC |
| 32(e)                                                                                                                                                                                                                                                                         | - | John                  F. Sipics for PPL Electric Utilities Corporation |
| 32(f)                                                                                                                                                                                                                                                                         | - | Paul                  A. Farr for PPL Electric Utilities Corporation |
|                                                                                                                                                                                                                                                                          |   |   |

----

SIGNATURES

|                                  | **PPL                  Corporation**                                                                                                                                                                                                                                                                                              |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  | (Registrant)                                                                                                                                                                                                                                                                                                                      |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  | **PPL                  Energy Supply, LLC**                                                                                                                                                                                                                                                                                       |
|                                  | (Registrant)                                                                                                                                                                                                                                                                                                                      |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  | **PPL                  Electric Utilities Corporation**                                                                                                                                                                                                                                                                           |
|                                  | (Registrant)                                                                                                                                                                                                                                                                                                                      |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
| Date:                  August 4, 2005 | /s/  John                  R.                  Biggar                                            |
|                                  | John                  R. Biggar                                                                                                                                                                                                                                                                                                   |   |
|                                  | Executive                  Vice President and                                                                                                                                                                                                                                                                                     |   |
|                                  | Chief                  Financial Officer                                                                                                                                                                                                                                                                                          |   |
|                                  | (PPL                  Corporation)                                                                                                                                                                                                                                                                                                |   |
|                                  | (principal                  financial officer)                                                                                                                                                                                                                                                                                    |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  |                                                                                                                                                                                                                                                                                                                              |   |
|                                  | /s/  Paul                  A.                  Farr                                                        |
|                                  | Paul                  A. Farr                                                                                                                                                                                                                                                                                                     |   |
|                                  | Vice                  President and Controller                                                                                                                                                                                                                                                                                    |   |
|                                  | (PPL                  Energy Supply, LLC)                                                                                                                                                                                                                                                                                         |   |
|                                  | Senior                  Vice President-Financial and Controller                                                                                                                                                                                                                                                                   |   |
|                                  | (PPL                  Electric Utilities Corporation)                                                                                                                                                                                                                                                                             |   |
|                                  | (principal                  financial officer)                                                                                                                                                                                                                                                                                    |   |
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