PPL ESOP 11-K 2001
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
|
[X]
|
ANNUAL REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
|
For the fiscal year
ended December 31, 2001
OR
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
|
For the transition period
from _________ to ___________
Commission file number 001-11459
|
A.
|
Full title of the plan and the address of
the plan is different from that of the issuer named below.
|
PPL EMPLOYEE STOCK OWNERSHIP
PLAN
|
B.
|
Name of issuer of the securities held pursuant
to the plan and the address of its principal executive office:
|
PPL CORPORATION
TWO NORTH NINTH STREET
ALLENTOWN, PENNSYLVANIA 18101-1179
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Employee Benefit Plan Board has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
PPL Employee Stock Ownership Plan
|
|
|
|
|
|
By: /s/ Thoburn W. Hatten
|
|
|
|
Thoburn W. Hatten
Chairman, Employee Benefit Plan Board
PPL Services Corporation
|
|
Dated: July 01, 2002
|
|
|
PPL EMPLOYEE STOCK OWNERSHIP
PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 AND INDEPENDENT
ACCOUNTANTS' REPORT
PREPARED FOR FILING AS PART
OF THE ANNUAL RETURN REPORT OF EMPLOYEE BENEFIT PLAN (FORM 5500)
TABLE OF CONTENTS
Report of Independent Accountants'
Financial Statements:
Statements of Net Assets Available for
Benefits at December 31, 2001 and 2000
Statements of Changes in Net Assets Available
for Benefits - Years Ended December 31, 2001 and 2000
Notes to Financial Statements
| |
PricewaterhouseCoopers
LLP
Two Commerce Square, Suite 1700
2001 Market Street
Philadelphia, PA 19103-7042
Telephone (267) 330 3000
Facsimile (267) 330 3300 |
Report of Independent Accountants'
To the Participants and Administrator of the PPL Employee
Stock Ownership Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits present
fairly, in all material respects, the net assets available for benefits of the
PPL Employee Stock Ownership Plan (the "Plan") at December 31, 2001
and 2000, and the changes in net assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these statements
in accordance with auditing standards generally accepted in the United States
of America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) and schedule of reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. These supplemental schedules are the responsibility
of the Plan's management. The supplemental schedules have been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
June 7, 2002
| PPL EMPLOYEE
STOCK OWNERSHIP PLAN |
|
|
|
|
|
| STATEMENTS OF NET ASSETS
AVAILABLE FOR BENEFITS |
|
AT DECEMBER 31, 2001 AND 2000
|
| (Thousands of Dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2001
|
|
2000
|
| Assets |
|
|
|
|
Investment - Common stock of PPL
Corporation
at fair value |
|
$179,159
|
|
$243,014
|
| Dividends receivable |
|
1,334
|
|
1,411
|
| Cash and cash equivalents |
|
|
|
1
|
| Total
assets |
|
$180,493
|
|
$244,426
|
|
|
|
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
| Dividends payable to participants |
|
1,334
|
|
1,411
|
| Total liabilities |
|
1,334
|
|
1,411
|
|
|
|
|
|
Net assets available for benefits
(100% vested) |
|
$179,159
|
|
$243,015
|
| |
|
|
|
|
|
|
|
|
|
|
| The accompanying notes are an integral
part of these financial statements. |
| PPL
EMPLOYEE STOCK OWNERSHIP PLAN |
|
|
|
|
|
|
|
|
|
| STATEMENTS OF CHANGES IN NET
ASSETS AVAILABLE FOR BENEFITS |
FOR THE YEARS ENDED DECEMBER
31, 2001 AND 2000
|
| (Thousands of Dollars) |
|
|
|
|
|
|
|
|
|
|
|
2001
|
|
2000
|
| Additions to net assets attributed
to: |
|
|
|
|
| Investment Income: |
|
|
|
|
| Net
(depreciation) appreciation of investment |
$(51,308)
|
|
$121,306
|
| Dividend income |
|
5,461
|
|
5,805
|
| Employer contributions |
|
3,927
|
|
4,097
|
| Miscellaneous loss |
|
|
|
(3)
|
| Total
additions |
|
(41,920)
|
|
131,205
|
|
|
|
|
|
| Deductions from net assets
attributed to: |
|
|
|
|
| Distributions of dividends to
participants |
|
(5,461)
|
|
(5,805)
|
| Distributions of stock and cash
to participants |
|
(16,475)
|
|
(12,433)
|
| Total
deductions |
|
(21,936)
|
|
(18,238)
|
|
|
|
|
|
| Net (decrease) increase |
|
(63,856)
|
|
112,967
|
|
|
|
|
|
| Net assets available for benefits: |
|
|
|
|
| Beginning of year |
|
243,015
|
|
130,048
|
| End of year |
|
$179,159
|
|
$243,015
|
|
|
|
|
|
|
|
| The accompanying notes are an
integral part of these financial statements. |
PPL EMPLOYEE
STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
-
PLAN DESCRIPTION
The PPL Employee Stock Ownership Plan (the "Plan") was
adopted effective January 1, 1975 to provide for employee ownership in PPL
Corporation (PPL). The Plan is currently sponsored by PPL Services Corporation
(the "Company"), an unregulated subsidiary of PPL. Amounts contributed to
the Plan are used to purchase shares of common stock of PPL. The following
description of the Plan provides only general information. Participants
should refer to the Plan agreement for a more complete description of the
Plan provisions.
Employees of participating PPL companies, as defined in
the Plan agreement, who have completed one year of credited service are
eligible to participate in the Plan.
The shares of common stock allocated to a participant's account may not exceed
the maximum permitted by law. All shares of common stock credited to a participant's
account are 100% vested and nonforfeitable, but cannot be pledged as security
by the employee. Stock certificates representing shares in the Plan are held
by Mellon Bank (the "Trustee").
The Plan requires that dividends on shares credited to participants' accounts
be paid in cash. Under existing income tax laws, PPL is permitted to deduct
the amount of those dividends for income tax purposes on its consolidated
Federal income tax return and to contribute the resulting tax savings (dividend-based
contribution) to the Plan. The dividend-based contribution is used to buy
shares of PPL's common stock and is expressly conditioned upon the deductibility
of the contribution for federal income tax purposes. Shares are allocated
to participants' accounts, 75% on the basis of shares held in a participant's
account and 25% on the basis of the participant's compensation.
Participants may elect to withdraw from their accounts common stock which
has been allocated with respect to a Plan year ending at least 84 months prior
to the end of the Plan year in which the election is made. Participants so
electing may receive cash or stock certificates for the number of whole shares,
cash for any fractional shares available for withdrawal or may make a rollover
to a qualified plan.
Participants who have attained age 55 and have completed ten years of participation
in the Plan may elect to withdraw a limited number of shares added to their
accounts after December 31, 1986. For the first five years after meeting the
requirement, participants may withdraw up to an aggregate of 25% of such shares.
In the sixth year, qualified participants may withdraw up to an aggregate
of 50% of such shares.
Upon termination of service with a participating company, participants are
entitled to receive cash or stock certificates for the number of whole shares,
cash for any fractional shares allocated to them or may make a rollover to
a qualified plan. Participants who terminate service with a participating
company and whose account balance exceeds, or exceeded at the time of any
prior distribution, $5,000, may defer distribution of the shares of stock
in the account until the earlier of age 65 or death. Participants who terminate
service with a participating company on or after age 55 may defer distribution
of the shares of stock in the account up to April 1 of the year following
the year in which the participant attains the age of 70-1/2.
The Company has reserved the right to amend or terminate the Plan at any time
by or pursuant to action of its Board of Directors. Upon termination of the
Plan the interests of Plan participants, their estates and beneficiaries shall
be nonforfeitable and shall be fully vested. Distributions shall be made to
those eligible under Plan provisions in full shares of stock and cash in lieu
of fractional shares. No stock may be distributed to a participant within
seven years after the month in which such stock was allocated to a participant's
account except in the case of the participant's retirement. Such stock will
be held by the trustee until the participant satisfies the seven year holding
period.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended.
- SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared under the accrual
basis of accounting.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases during the reporting period. Actual results could differ from those
estimates.
The Plan's common stock investment is stated at fair value. Fair value is
the quoted market price of PPL's common stock at the end of the year. Realized
gains and losses from the sale or distribution of stock by the Trustee are
based on the average cost of common stock held at the time of sale. Net appreciation/depreciation
as reported in the accompanying financial statements includes both realized
and unrealized gains and losses.
Dividend income and dividend distributions to participants are recorded on
dividend record dates.
- ADMINISTRATION
The Plan is administered by the Employee Benefit Plan Board, composed of certain
PPL officers appointed by the Board of Directors of PPL.
Expenses incurred in the administration of the Plan are paid by the Company,
and the facilities of the Company are used by the Plan at no charge.
- INVESTMENTS
The plan's investments, at December 31, are presented in the following table:
|
|
2001
|
|
|
2000
|
| PPL Corporation |
|
|
|
|
|
| Common Stock: |
|
|
|
|
|
| |
|
|
|
|
|
| Number of Shares |
|
5,140,869
|
|
|
5,377,849
|
| Cost |
|
$99,417,121
|
|
|
$101,440,208
|
| Fair Value |
|
$179,159,285
|
|
|
$243,014,241
|
The fair value per share of PPL Corporation common stock at December 31,
2001 and 2000 was $34.85 and $45.188, respectively.
- TAX STATUS
In 1995, the Internal Revenue Service (IRS) issued a determination letter
that the Plan, as amended through December 20, 1994, continues to be qualified
under Section 401(a) of the Internal Revenue Code as a stock bonus plan and
constitutes an employee stock ownership plan under Section 409 of the Internal
Revenue Code. The Plan has been amended since receiving the determination
letter; however, the Plan administrator believes that the Plan is designed
and is currently operated in compliance with the applicable requirements of
the Internal Revenue Code.
Under present Federal income tax laws and regulations, a qualified plan is
not taxed on contributions received from PPL or participants, on dividend
income, on realized gains from the sale of stock or on any unrealized appreciation
of investments. A participant in a qualified plan is not subject to Federal
income tax on amounts contributed by PPL until that participant receives a
distribution from the Plan.
| PPL EMPLOYEE STOCK OWNERSHIP PLAN |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Schedule H, Line 4i - SCHEDULE OF
ASSETS (Held at end of year) |
DECEMBER 31, 2001
|
|
|
|
|
|
|
|
|
|
|
|
Identity of Issue,
|
|
|
|
|
|
|
|
|
Borrower, Lessor,
|
|
.
|
|
|
|
Current
|
| |
|
or Similar Party
|
|
Description of Investment
|
|
Cost
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,140,869 Shares of PPL Corp |
|
|
|
|
|
*
|
|
PPL Corporation
|
|
Common Stock - $0.01 par value |
|
$99,417,121
|
|
$179,159,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* = Represents a Party-In-Interest |
|
|
|
|
| PPL EMPLOYEE STOCK
OWNERSHIP PLAN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Schedule H, Line
4j - SCHEDULE OF REPORTABLE TRANSACTIONS |
YEAR ENDED DECEMBER
31, 2001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERIES OF TRANSACTIONS,
INVOLVING SECURITIES OF THE SAME ISSUE, IN EXCESS OF 5% OF THE CURRENT VALUE
OF NET ASSETS AVAILABLE FOR BENEFITS AT THE BEGINNING OF THE PLAN YEAR
|
| |
|
IDENTITY OF PARTY INVOLVED
|
|
DESCRIPTION OF ASSET
|
|
TOTAL PURCHASE PRICE
|
|
TOTAL SELLING PRICE
|
|
EXPENSE INCURRED WITH TRANSACTION
|
|
COST OF ASSET
|
|
CURRENT VALUE OF ASSET ON TRANSACTION DATE
|
|
NET GAIN (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| The Employee Benefit
Plan Board of the PPL Corporation as Administrator of the PPL Employee Stock
Ownership Plan |
|
PPL Corporation
Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of 112,469
shares |
|
$3,926,966
|
|
|
|
|
|
|
|
$3,926,966
|
|
|
|
Sale of shares 173,998
|
|
|
|
$8,299,058
|
|
|
|
$2,962,664
|
|
$8,299,058
|
|
$5,336,394
|