8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 11, 2011

Commission File Number	Registrant; State of Incorporation; Address and Telephone Number	IRS Employer Identification No.
1-11459	PPL Corporation (Exact name of Registrant as specified in its charter) (Pennsylvania) Two North Ninth Street Allentown, PA  18101-1179 (610) 774-5151	23-2758192

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

On April 1, 2011, PPL Corporation (“PPL” or the “Company”) reported that it had completed its acquisition (“Acquisition”) of all of the outstanding ordinary share capital of Central Networks East plc and Central Networks Limited, the sole owner of Central Networks West plc, together with certain other related assets and liabilities (collectively, “Central Networks”), from E.ON U.K. plc, a wholly owned subsidiary of E.ON AG.

(a) Financial Statements of Businesses Acquired

In accordance with Rule 3-05(a)(1)(i) of Regulation S-X, filed herewith as Exhibit 99.1 are the Audited Central Networks Combined Financial Statements as of and for the years ended December 31, 2010 and 2009.

(b)  Pro Forma Financial Information

In accordance with Rule 11-01(a)(3) of Regulation S-X, filed herewith as Exhibit 99.2 is unaudited pro forma condensed combined consolidated financial information of PPL, LG&E and KU Energy LLC and Central Networks, giving effect to certain pro forma events related to the Acquisition.  It does not purport to project future financial position or operating results of the post-Acquisition combined company.  The pro forma condensed combined consolidated financial information is as of and for the year ended December 31, 2010.

(d)	Exhibits
	23(a) -	Consent of Independent Accountants (PricewaterhouseCoopers LLP).
	99.1 -	(Audited) Central Networks Combined Financial Statements as of and for the years ended December 31, 2010 and 2009.
	99.2 -	Unaudited Pro forma Condensed Combined Consolidated Financial Information of PPL Corporation, LG&E and KU Energy LLC and Central Networks, consisting of: pro forma condensed combined consolidated statement of income for the year ended December 31, 2010 and pro forma condensed combined consolidated balance sheet as of December 31, 2010.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PPL CORPORATION
By:	/s/ Paul A. Farr
	Paul A. Farr Executive Vice President and Chief Financial Officer

Dated:  April 11, 2011

EX-23.A

Exhibit 23(a)

CONSENTOFINDEPENDENTACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-158200) of PPL Corporation of our report dated April 8, 2011 relating to the combined financial statements of Central Networks Group, which appears in this Current Report on Form 8-K of PPL Corporation dated April 11, 2011.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

East Midlands, United Kingdom

April 8, 2011

EX-99.1

Exhibit 99.1

CENTRAL NETWORKS

COMBINED FINANCIAL STATEMENTS

for the years ended 31 December 2010 and 31 December 2009

CENTRAL NETWORKS

Combined Financial Statements

for the years ended 31 December 2010 and 2009

Contents

	Page
Profit and loss account	3
Balance sheet	4
Cash flow statement	5
Notes to the financial statements and accounting policies	6
Independent auditors’ report	26

Purpose of financial statements

On 1 April 2011, the Central Networks Group of companies was acquired from E.ON UK plc by PPL Corporation. These financial statements represent the combined financial statements for that group for the two years ended 31 December 2010 (see note 1) and have been prepared to allow PPL Corporation to meet various regulatory and other reporting requirements.

These financial statements have been prepared in accordance with Generally Accepted Accounting Practices in the United Kingdom (UK GAAP) but include a summary of the adjustments that would be necessary in order to present the financial statements in accordance with Generally Accepted accounting Practices in the United States (US GAAP).

These financial statements do not constitute statutory financial statements. Statutory financial statements for each of the individual companies within the Central Networks group have been delivered to the Registrar and include unmodified auditors’ reports.

CENTRAL NETWORKS

Combined Profit and Loss Account

for the years ended 31 December 2010 and 2009

			Year ended 31 December 2010			Year ended 31 December 2009
	Note			£m			£m
Turnover		2		691.0			651.6
Cost of sales				(33.9	)		(30.7	)
Gross profit				657.1			620.9
Net operating expenses		3		(250.3	)		(245.6	)
Operating profit		4		406.8			375.3
Interest receivable and similar income		6		1.7			3.5
Interest payable and similar charges		7		(25.1	)		(18.9	)
Profit on ordinary activities before taxation				383.4			359.9
Tax on profit on ordinary activities		8		(95.4	)		(28.4	)
Profit for the financial year				288.0			331.5

There are no material differences between the profit for either of the financial years stated above and their historical cost equivalents.

The combined group has no recognised gains and losses other than the profit above and therefore no separate statement of total recognised gains and losses has been presented.

All of the above amounts relate to continuing operations.

CENTRAL NETWORKS

Combined Balance Sheets

as at 31 December 2010 and 2009

			At 31 December 2010			At 31 December 2009
	Note			£m			£m
Fixed assets
Tangible assets		9		3,400.1			3,123.7
Current assets
Stock		10		19.7			23.3
Debtors: amounts falling due within one year		11		1,299.3			791.3
				1,319.0			814.6
Creditors: amounts falling due within one year		12		(1,075.0	)		(1,620.3	)
Net current assets / (liabilities)				244.0			(805.7	)
Total assets less current liabilities				3,644.1			2,318.0
Creditors: amounts falling due after more than one year		13		(1,041.3	)		-
Provisions for liabilities		14		(150.7	)		(153.9	)
Net assets				2,452.1			2,164.1
Total shareholder’s funds		16		2,452.1			2,164.1

These financial statements were approved by the Board of Directors on 8 April 2011 and signed on its behalf by:

/s/  D G Harris

D G Harris

Director

8 April 2011

CENTRAL NETWORKS

Combined Cash Flow Statements

for the years ended 31 December 2010 and 2009

			Year ended 31 December 2010			Year ended 31 December 2009
	Note			£m			£m
Net cash inflow from operating activities		17		468.7			472.2
Debt issue costs				(8.7	)		-
Interest paid				(2.9	)		(19.2	)
Returns on investments and servicing of finance				(11.6	)		(19.2	)
Taxation				(142.0	)		(86.0	)
Purchase of tangible fixed assets				(450.9	)		(474.3	)
Customers contribution to tangible fixed    assets				76.1			147.4
Sale of tangible fixed assets				-			0.9
Loans issued				(493.6	)		(88.2	)
Total capital expenditure and financial investment				(868.4	)		(414.2	)
Acquisitions		22		-			-
Net cash (outflow) before financing				(553.3	)		(47.2	)
Financing
Repayment of loans		18		(714.9	)		-
Loans received		18		1,050.0			254.5
Net movement on other amounts owed to E.ON  entities		18		218.2			(207.4	)
Increase/(decrease) in cash and cash equivalents in the year				0.0			(0.1	)

CENTRAL NETWORKS

Notes to the combined financial statements

for the years ended 31 December 2010 and 2009

1   Accounting policies

These financial statements are prepared on the going concern basis, under the historical cost convention, and applicable United Kingdom accounting standards. All accounting policies have been consistently applied. The principal accounting policies are set out below.

(a)   Basis of preparation

The combined financial statements presented are for the Central Networks Group of companies, consisting of the Central Networks Limited group and Central Network East plc (the “Combined Group”). Central Networks Limited including its consolidated subsidiaries as at 31 December 2010; Central Networks West Plc, Central Networks Services Ltd, Cell Site Connection Services Ltd and Central Networks Contracting Ltd have been combined with the financial statements for Central Networks East plc.  Also included in the combined financial statements are certain assets that have been managed as part of the Combined Group but were not included in any of the legal entities which form the Combined Group.  The combined figures have been adjusted for eliminations for intragroup trading during the year, intragroup balances held at the year end and profit or loss on intragroup transactions.

Two subsidiaries that on 1 January 2009 were legally owned by Central Networks Limited, but which were not managed as part of the Combined Group and had substantially different business, were sold in December 2010 to another E.ON group company. These businesses are not considered to be part of the Combined Group and thus have been treated in these financial statements as if the businesses were never part of the Combined Group.

(b)  Tangible fixed assets

Tangible fixed assets are stated at their purchase or production cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is calculated so as to write off the cost of tangible fixed assets, less their estimated residual values, on a straight-line basis over their useful economic lives. Tangible fixed assets are not revalued. The estimated useful economic lives used for the principal categories of fixed assets are as follows:

Distribution network	40 - 70 years
Customer contributions	40 - 70 years
Other assets	Up to 10 years
Plant and machinery	Up to 10 years
Commercial vehicles	Up to 10 years
Meter equipment	15 - 20 years
Computer equipment	3 to 5 years

Assets in the course of construction are not depreciated.

Customer contributions are deducted from the cost of the related distribution network fixed assets. Customers’ contributions towards these assets are credited to the profit and loss account over the life of the distribution network assets to which they relate by virtue of a reduction in the depreciation charge.

When indicators suggest that an asset may be impaired the carrying value of assets are reviewed to see if there has been an impairment.  An impairment charge is calculated as the difference between the carrying value of the asset and its recoverable amount, if lower. Where such an asset does not generate cash flows that are independent from other assets, the Combined Group estimates the recoverable amount of the income generating unit to which the asset belongs.

(c)   Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease.

(d)   Long term contracts

Long term contracts are measured at cost net of amounts transferred to cost of sales after deducting foreseeable losses. These contracts are included in stock as work in progress. The amount by which payments on account exceed turnover is shown under creditors as deferred income. Where it is probable that total contract costs will exceed the total contract revenue, the expected loss is recognised as an expense immediately. Initially, the foreseeable loss is deducted from the work in progress figure of the particular contract, thus reducing it to net realisable value. Any loss in excess of the work in progress figure is classified under ‘Provisions for liabilities’.

(e)   Stocks and stores

Stocks and stores are stated at the lower of cost and net realisable value. Where necessary, provision is made for obsolete, slow moving or defective stocks. Stocks are measured on a weighted average cost basis.

(f)   Pension costs

The Combined Group contributes to a defined contribution pension scheme, and also a defined benefit group pension scheme operated by E.ON UK plc, the assets of which are invested in a separate trustee-administered fund. Further details of these schemes are available in E.ON UK plc’s consolidated financial statements.

The Combined Group is unable to identify its share of the underlying assets and liabilities of the group defined benefit pension scheme. The Combined Group has accounted for its contribution to the group defined benefit pension scheme as if the scheme was a defined contribution scheme and accounts for contributions payable to the group pension scheme in the accounting period in which they fall due.

(g)   Taxation

The tax charge for the year is based on the profits or losses on ordinary activities for the year and takes into account full provision for deferred tax in respect of timing differences on a discounted basis, using the approach set out in Financial Reporting Standard 19 'Deferred tax'. Timing differences arise primarily from the differing treatment for taxation and accounting purposes of provisions and depreciation of fixed assets. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Deferred tax assets are recognised when it is more likely than not that they will be recovered.

Deferred tax is measured at the tax rates that are expected to apply in the periods which the timing differences are expected to reverse, based on tax laws that have been enacted or substantially enacted by the balance sheet date.

(h)   Turnover

Turnover comprises revenue from the distribution of electricity to industrial, commercial and domestic customers and is recognised when supplied. It also includes the value of sales from performing Non Trading Rechargeable activity (‘NTR’) (as defined within the electricity distribution licence). Turnover excludes value added tax.

Turnover relating to the distribution of electricity represents the value of charges for electricity distributed during the year including estimates of the sales value of units distributed to customers between the date of the last meter reading and the year end.

Turnover and profit on NTR schemes is recognised on physical completion of the project. Larger schemes are divided into sections of work with turnover and profit being recognised when work is physically complete for each section. Turnover and profit on service orders is recognised as work is done and services are provided to the customer.

Where payments are received from customers in advance of services provided, the amounts are recorded as Deferred Income and included as part of Creditors due within one year.

(i)   Related party transactions

During the two years ended 31 December 2010, the entities forming the Combined Group were wholly owned subsidiaries of E.ON AG. The Combined Group is exempt under the terms of Financial Reporting Standard 8 from disclosing related party transactions with the E.ON Group or investees of the E.ON Group.

(j)   Provisions

Provisions are recognised in the balance sheet when the Combined Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. A provision for restructuring is recognised when the Combined Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced to those affected by it.

(k)   Borrowings

A financial liability is initially recognised net of issue costs incurred. Costs that are incurred directly in connection with the issue of a capital instrument are netted against the liability and amortised at a constant rate over the life of the underlying instrument.

(l)   Financial instruments

The Combined Group has not adopted Financial Reporting Standard 26 ’Financial instruments: recognition and measurement’ as the current financial instruments are not listed on a regulated market for the purposes of Directive 2004/39/EC.   Therefore the disclosure requirements of Financial Reporting Standard 29 ’Financial instruments: disclosures’ are not applicable.

(m)   Going concern

The directors have prepared the financial statements on the going concern basis. The directors have given due consideration to this matter and consider that the Combined Group is in a position to continue to trade and meet all of its liabilities for at least twelve months from the date of the directors’ approval of these financial statements.

2           Turnover

The Combined Group’s turnover, all of which arises in the course of the Combined Group’s principal activity, arises in the UK.

3           Net operating expenses

	Year ended  31 December 2010		Year ended 31 December 2009
		£m		£m
Employee costs (note 5)		82.6		75.8
Depreciation (note 9)		90.4		89.5
Other operating charges		77.3		80.3
		250.3		245.6

4           Operating profit

Operating profit is stated after charging:

	Year ended 31 December 2010		Year ended 31 December  2009
		£m		£m
Depreciation of tangible fixed assets:
Owned assets		90.4		89.5
Loss on disposal of tangible fixed assets		3.2		0.4
Operating lease charges:
Vehicles		7.3		6.7
Auditors’ remuneration:
Audit services		0.3		0.3

Non-audit fees of £0.1m were incurred during the year (2009: £0.1m) relating to regulatory audit and reporting.

5           Employee information

The average monthly number of persons (including executive directors) employed by the Combined Group during the year was:

By activity	Year ended 31 December 2010		Year ended 31 December 2009
Industrial		2,411		2,306
Non-industrial		1,103		1,129
		3,514		3,435

The salaries and related costs of employees, including directors, were:

	Year ended 31 December 2010			Year ended 31 December 2009
		£m			£m
Wages and salaries		129.6			123.9
Social security costs		12.0			11.1
Other pension costs		23.7			18.7
		165.3			153.7
Less: capitalised in tangible fixed assets		(82.7	)		(77.9	)
		82.6			75.8

6           Interest receivable and similar income

	Year ended 31 December 2010		Year ended 31 December 2009
		£m		£m
Interest receivable and similar income		1.7		3.5

7           Interest payable and similar charges

	Year ended 31 December 2010		Year ended 31 December 2009
		£m		£m
Interest payable on other loans		1.6		-
Interest payable to group undertakings		23.5		18.9
Total interest payable and similar charges		25.1		18.9

8           Tax on profit on ordinary activities

	Year ended 31 December 2010			Year ended 31 December 2009
		£m			£m
Current tax:
UK corporation tax on profits for the year		94.3			92.3
Adjustment in respect of previous periods		0.5			(6.3	)
Total current tax charge		94.8			86.0
Deferred tax:
Origination and reversal of timing differences		12.8			8.9
Movement in deferred tax discount		4.5			(61.1	)
Changes in tax law and rates		(7.0	)		-
Adjustment in respect of previous periods		(9.7	)		(5.4	)
Total deferred tax credit (note 15)		0.6			(57.6	)
Tax on profit on ordinary activities		95.4			28.4

The difference between the tax on the profit on ordinary activities for the year and the tax assessed on the profit on ordinary activities for the year assessed at the standard rate of corporation tax in the UK at 28% can be explained as follows:

	Year ended 31 December 2010			Year ended 31 December 2009
		£m			£m
Profit on ordinary activities before tax		383.4			359.9
Tax on profit on ordinary activities before tax at 28% (2009: 28%)		107.4			100.8
Effects of:
Permanent differences		-			0.1
Capital allowances in excess of depreciation		(10.3	)		(8.6	)
Adjustment in respect of previous periods		0.5			(6.3	)
Elimination of transactions with E.ON entities		(2.8	)		-
Current tax charge for the year		94.8			86.0

During the year, as a result of the change in the UK main corporation tax rate from 28% to 27% that was substantively enacted on 20 July 2010 and that will be effective from 1 April 2011, the relevant deferred tax balances have been re-measured.

Further reductions to the UK corporation tax rate were announced in the June 2010 Budget. These changes, which are expected to be enacted separately each year, propose to reduce the rate by 1% per annum to 24% by 1 April 2014. The Budget also included measures to reduce the rate of writing-down allowances on the main pool of plant and machinery expenditure to 18% and on the special rate pool to 8%, both with effect from 1 April 2012.

In addition to the changes in rates of Corporation tax disclosed above, a number of further changes to the UK Corporation tax system were announced in the March 2011 UK Budget Statement. A resolution passed by Parliament on 29 March 2011 has reduced the main rate of corporation tax to 26% from 1 April 2011. Legislation to reduce the main rate of corporation tax from 26% to 25% from 1 April 2012 is expected to be included in the Finance Act 2011. Further reductions to the main rate are proposed to reduce the rate by 1% per annum to 23% by 1 April 2014.

The effect of the changes enacted by Parliament on 29 March 2011 is to reduce the deferred tax liability provided at the balance sheet date by £5.5m. This £5.5mdecrease in the deferred tax liability, would increase profit by £5.5m. This decrease in the deferred tax liability is due to the additional reduction in the corporation tax rate to 26% with effect from 1 April 2011.

The effect of the changes expected to be enacted in the Finance Act 2011 would be to further reduce the deferred tax liability provided at the balance sheet date by £5.5m. This £5.5mdecrease in the deferred tax liability would increase profit by £5.5m. This decrease in the deferred tax liability is due to the reduction in the corporation tax rate from 26% to 25 per cent with effect from 1 April 2012.

The proposed reductions of the main rate of corporation tax by 1% per year to 23% by 1 April 2014 are expected to be enacted separately each year. The overall effect of the further changes from 25% to 23% and the changes in capital allowance rates, if these applied to the deferred tax balance at the balance sheet date, would be to reduce the deferred tax liability by £10.9m.

9           Tangible fixed assets

As at 31 December 2009

	Distribution networks			Customer contributions			Other assets			Assets under construction		Total
		£m			£m			£m			£m		£m
Cost:
At 1 January 2009		5,623.6			(1,363.5	)		31.3			-		4,291.4
Acquisitions		-			-			4.4			-		4.4
Additions		400.4			(147.4	)		6.6			58.8		318.4
Disposals		(2.7	)		-			(0.3	)		-		(3.0	)
At 31 December 2009		6,021.3			(1,510.9	)		42.0			58.8		4,611.2
Accumulated depreciation:
At 1 January 2009		1,757.2			(370.3	)		12.8			-		1,399.7
Charge for the years		109.4			(27.1	)		7.2			-		89.5
Disposals		(1.4	)		-			(0.3	)		-		(1.7	)
At 31 December 2009		1,865.2			(397.4	)		19.7			-		1,487.5
Net book value:
At 31 December 2009		4,156.1			(1,113.5	)		22.3			58.8		3,123.7
At 31 December 2008		3,866.4			(993.2	)		18.5			-		2,891.7

As at 31 December 2010

	Distribution networks			Customer contributions			Other assets			Assets under construction			Total
		£m			£m			£m			£m			£m
Cost:
At 1 January 2010		6,021.3			(1,510.9	)		42.0			58.8			4,611.2
Additions		302.6			(76.1	)		36.6			106.9			370.0
Disposals		(3.5	)		-			(1.9	)		-			(5.4	)
Transfers		97.1			-			-			(97.1	)		-
At 31 December 2010		6,417.5			(1,587.0	)		76.7			68.6			4,975.8
Accumulated depreciation:
At 1 January 2010		1,865.2			(397.4	)		19.7			-			1,487.5
Charge for the years		112.1			(29.3	)		7.6			-			90.4
Disposals		(1.9	)		-			(0.3	)		-			(2.2	)
At 31 December 2010		1,975.4			(426.7	)		27.0			-			1,575.7
Net book value:
At 31 December 2010		4,442.1			(1,160.3	)		49.7			68.6			3,400.1
At 31 December 2009		4,156.1			(1,113.5	)		22.3			58.8			3,123.7

10           Stocks

	At 31 December 2010			At 31 December 2009
		£m			£m
Stocks and stores		10.6			9.8
Work in progress		9.6			13.8
Foreseeable losses on work in progress		(0.5	)		(0.3	)
		19.7			23.3

11           Debtors: amounts falling due within one year

	At 31 December 2010		At 31 December 2009
		£m		£m
Trade debtors		76.7		69.8
Amounts owed by E.ON entities		1,160.2		703.0
Other debtors		5.0		9.9
Corporation tax		47.2		-
Prepayments and accrued income		10.2		8.6
		1,299.3		791.3

The Combined Group has a £600.0m rolling loan to E.ON UK plc, which expires on 30 November 2014. The drawn amount relating to this facility at 31 December 2010, included within amounts owed by E.ON entities, is £268.0m (2009: £266.3m). This loan is unsecured and bears interest at 0.05% below LIBOR per annum.

During 2010 the Combined Group made loans to E.ON UK plc of £491.9m, (2009: £nil) included within amounts owed by E.ON entities.  These loans are unsecured and bear interest at 0.03% below LIBOR per annum.

Other amounts owed by E.ON entities, are unsecured, interest free and are repayable on demand.

12           Creditors: amounts falling due within one year

	At 31 December 2010		At 31 December 2009
		£m		£m
Bank loans and overdrafts		2.4		2.4
Trade creditors		38.7		27.1
Amounts owed to E.ON entities		876.5		1,409.6
Other creditors		13.4		31.7
Accruals		72.1		73.7
Deferred income		71.9		75.8
		1,075.0		1,620.3

The Combined Group has the following rolling loan facilities with E.ON UK plc:

					At 31 December 2010		At 31 December 2009
Facility		Interest above LIBOR		Expiry Date		£m		£m
	£575.0m		0.5%	1 October 2011		120.0		318.2
	£500.0m		0.7%	8 July 2013		7.6		508.6
	£90.0m		0.75%	24 March 2014		36.6		52.3
						164.2		879.1

The loans are unsecured, incur interest at the rate indicated above LIBOR and are reviewed on a daily basis.

Other amounts owed to E.ON entities are unsecured, interest free and are repayable on demand.

13           Creditors: amounts falling due after more than one year

	At 31 December 2010		At 31 December 2009
		£m		£m
Amounts owed to E.ON UK plc		550.0		-
Amounts owed to external debt holders
5.75% Sterling bond 2040		244.7		-
5.5% Sterling bond 2025		246.6		-
		1,041.3		-

The Combined Group entered into three new fixed term agreements with E.ON UK plc during 2010 as follows:

·   a £82.5m facility incurring interest at 2.75% which expires on 29 March 2013

·   a £137.5m facility incurring interest at 3.78% which expires on 31 March 2015

·   a £330.0m facility incurring interest at 5.23% which expires on 31 March 2020

All of the above loans are unsecured and were fully drawn down as at 31 December 2010.

The fixed rate sterling bonds are shown net of issue costs. The issue costs are amortised at a constant rate based on the carrying amount of debt over the life of the underlying instruments. Notwithstanding the investor put and issuer call options, the bonds are otherwise due for repayment on 10 December 2040 and 9 May 2025 respectively. Due to the proximity of the year end versus timing of issue there is no material difference between the book value and the fair value.

14           Provisions for liabilities

As at 31 December 2009

	Restructuring	Deferred tax  (note 15)	Contract Loss Provision	Total
	£m	£m	£m	£m
At 1 January 2009	-	204.9	-	204.9
Charged to the profit and loss account	2.1	3.5	4.5	10.1
Movement in discount	-	(61.1)	-	(61.1)
At 31 December 2009	2.1	147.3	4.5	153.9

As at 31 December 2010

	Restructuring	Deferred tax  (note 15)	Contract Loss Provision	Total
	£m	£m	£m	£m
At 1 January 2010	2.1	147.3	4.5	153.9
Charged to the profit and loss account	(0.8)	(3.9)	1.3	(3.4)
Utilised during the year	(0.4)	-	(3.9)	(4.3)
Unwinding of discount	-	4.5	-	4.5
At 31 December 2010	0.9	147.9	1.9	150.7

The restructuring provision relates to the provision for demobilisation costs associated with the introduction of the new Alliancing model to fundamentally change the way the Combined Group works with its contractors.

15           Deferred tax

The deferred tax liability comprises:

	At 31 December 2010			At 31 December 2009
		£m			£m
Accelerated capital allowances		408.6			415.0
Other timing differences		2.2			(0.3	)
Undiscounted liability for deferred tax		410.8			414.7
Discount		(262.9	)		(267.4	)
Discounted liability for deferred tax		147.9			147.3

The opening and closing deferred tax positions can be reconciled as follows:

As at 31 December 2009

	£m
Deferred tax liability at 1 January 2009	204.9
Deferred tax charge to profit and loss account	(52.2)
Adjustment in respect of prior year	(5.4)
Deferred tax liability at 31 December 2009	147.3

Deferred tax balances are measured at the standard rate of corporation tax in the UK of 28% as this is the rate that will apply when these timing differences reverse.  During the year, a new first year rate for capital allowances of 40% was introduced for certain assets and industrial buildings were reduced from 3% to 2%, to be reduced to nil by 2011. The deferred tax provision is not impacted by this change.

The discount for deferred tax has increased by £61.1m in the year, primarily due to an increase in the period over which assets are depreciated for accounts purposes.

As at 31 December 2010

	£m
Deferred tax liability at 1 January 2010	147.3
Deferred tax charge to profit and loss account	10.3
Adjustment in respect of prior years	(9.7)
Deferred tax liability at 31 December 2010	147.9

Deferred tax balances are measured at the standard rate of corporation tax in the UK of 27% that at 31 December 2010 was the rate that was expected to apply when these timing differences reverse.

16           Reconciliation of movements in shareholder’s funds

	Year ended 31 December 2010		Year ended 31 December 2009
		£m		£m
Profit for the financial year		288.0		331.5
Net addition to shareholder’s funds		288.0		331.5
Opening shareholder’s funds		2,164.1		1,832.6
Closing shareholder’s funds		2,452.1		2,164.1

17           Reconciliation of operating profit to net cash inflow from operating

activities

	Year ended 31 December 2010			Year ended 31 December 2009
		£m			£m
Operating profit		406.8			375.3
(Profit) / loss on sale of tangible fixed assets		3.2			0.4
Depreciation charge		90.4			89.5
(Increase) / decrease in stock		3.6			(0.5	)
(Increase)/decrease in external debtors		(3.7	)		0.4
Increase/(decrease) in amounts owed to external creditors		(27.8	)		0.5
Increase / (decrease) in provisions		(3.8	)		6.6
Net cash inflow from operating activities		468.7			472.2

18           Analysis of changes in net debt

As at 31 December 2009

	At 1 January 2009			Movement			At  31 December 2009
		£m			£m			£m
Bank overdraft		(2.3	)		(0.1	)		(2.4	)
Debt due within one year		(624.6	)		(254.5	)		(879.1	)
Other amounts owed to E.ON entities		(301.2	)		207.4			(93.8	)
Net debt		(928.1	)		(47.2	)		(975.3	)

As at 31 December 2010

	At 1 January 2010			Cash flow			Non-cash movement		At  31 December 2010
		£m			£m			£m		£m
Bank overdraft		(2.4	)		-			-		(2.4	)
Debt due within one year		(879.1	)		714.9			-		(164.2	)
Debt due after one year		-			(1,050.0	)		8.7		(1,041.3	)
Other amounts owed to E.ON entities		(93.8	)		(218.2	)		-		(312.0	)
Net debt		(975.3	)		(553.3	)		8.7		(1,519.9	)

Non cash movements comprise deferral of issue costs.

Balances due to and from other E.ON entities that are repayable on demand are deemed to form part of the financing of the Combined Group, and hence the net movements have been presented as financing cash flows.

19           Pension commitments

The Combined Group participates in a funded group pension scheme operated by E.ON UK plc, which is part of an industry wide scheme, the Electricity Supply Pension Scheme. The pension scheme is of the defined benefit type and its assets are held in a separate trustee-administered fund.

The fund is valued every three years by a professionally qualified, independent actuary, the rates of contribution payable being determined by the actuary. In the intervening years the actuary reviews the appropriateness of the rates. The latest published actuarial assessment of the scheme was at 31 March 2007.

Due to the complexity of actuarial calculations and the number of different companies contributing to the scheme, the Combined Group is unable to identify its share of the underlying assets and liabilities in the scheme. Consequently, the Combined Group accounts for the scheme as a defined contribution scheme. The cost of contributions to the scheme in the year amounts to £23.7m (2009: £18.0m).

The deficit on the scheme at 31 December 2009 measured in accordance with IAS19, as disclosed in the E.ON UK plc consolidated financial statements, was £663.0m.  Valuation of the deficit on a UK GAAP (FRS17) basis is not available, and information regarding the deficit at 31 December 2010 has not yet been published by E.ON UK plc.  E.ON UK plc expects to make special contributions of £61.0m per annum until 2013.

Following the acquisition of the Combined Group by PPL Corp an exercise will be performed to separate out the portion of the scheme that relates to employees of the Combined Group. An estimate of the liability at as 31 December 2010 relating to the Combined Group has not been calculated.

On 31 March 2011 the Combined Group made a lump sum contribution of £94.9m.

20           Capital and other commitments

At 31 December 2010, the Combined Group had commitments of £23.8m (2009: £21.2m) for capital expenditure not provided for in these financial statements.

21           Financial commitments

The Combined Group had annual commitments under non-cancellable operating leases in respect of commercial vehicles expiring as follows:

	At 31 December 2010		At 31 December 2009
		£m		£m
within one year		1.9		0.3
within two to five years		5.2		6.9
		7.1		7.2

22           Acquisitions

On 1 January 2009, the Combined Group purchased the trade and assets of the new connections business from E.ON UK Energy Services Limited.  The business transfer was settled for consideration equal to book value, and comprised assets and liabilities with a net liability value of £100.7m.  The principal activity of the acquired business is the connection of external customers to the electricity distribution network.

	Book value	Fair value
	£m	£m
Tangible fixed assets	4.4	4.4
Current assets	90.3	90.3
Current liabilities	(195.4)	(195.4)
	(100.7)	(100.7)
Goodwill arising on acquisition		-
Net liabilities acquired		(100.7)
Satisfied by:
Inter-company loan		(100.7)
Directly attributable costs		-
		(100.7)

The inter-company loan is unsecured, interest free and repayable on demand.

The impact of the acquired business on the Combined Group is as follows:

	12 months ended 31 December 2009
		£m
Turnover		24.4
Cost of sales		(14.9	)
Gross profit		9.5
Net operating expenses		(9.0	)
Operating profit		0.5

All the above amounts relate to continuing, acquired operations.

23           Subsequent events

On 28 February 2011 Central Networks West plc declared a dividend of £442m to Central Networks Limited, settled by the issue of a loan note.

On the same date, Central Networks Limited declared a dividend of £442m to its shareholder Avon Energy Partner Holdings, settled by the assignment of the loan note issued by Central Networks West plc to Central Networks Limited.

On 28 February 2011 Central Networks East plc declared a dividend of £311m to its shareholder East Midlands Electricity Distribution Holdings, settled by the issue of a loan note.

On 2 March 2011 an announcement was made that E.ON had signed an agreement to sell the Combined Group to PPL Corporation. The completion of this sale occurred on 1 April 2011.  As part of the consideration, all balances with other E.ON entities were settled on behalf of the Combined Group by PPL Corporation.

On 1 April 2011 the entities within the Combined Group changed names as follows:

Former Name	Current Name
Central Networks Limited	WPD Midlands Holdings Limited
Central Networks West plc	Western Power Distribution (West Midlands) plc
Central Networks Services Limited	WPD Midlands Networks Services Limited
Cell Site Connection Services Limited	Cell Site Connection Services Limited
Central Networks Contracting Limited	WPD Midlands Networks Contracting Limited
Central Networks East plc	Western Power Distribution (East Midlands) plc

24           Reconciliation to US GAAP

The combined financial statements are prepared in accordance with UK GAAP which differs in certain significant respects from US GAAP.  The effect of the US GAAP adjustments to profit for the financial years and equity shareholder’s funds are set out in the tables below.

Reconciliation of profit for the financial year to US GAAP

	Note		Year ended 31 December 2010			Year ended 31 December 2009
				£m			£m
Profit for the financial year under UK GAAP				288.0			331.5
Reconciling items:
Asset retirement obligations		a		(2.7	)		(3.1	)
Regulatory over-recovery		b		(7.4	)		(38.2	)
Capitalised interest		c		5.7			6.1
Deferred tax on US GAAP adjustments				0.2			9.8
Deferred tax due to US GAAP tax differences		d		4.5			(61.1	)
Net income for the financial year under US GAAP				288.3			245.0

Reconciliation of equity shareholder’s funds to US GAAP

	Note		Year ended 31 December 2010			Year ended 31 December 2009
				£m			£m
Closing shareholders funds under UK GAAP				2,452.1			2,164.1
Reconciling items:
Asset retirement obligations		a		(24.4	)		(21.7	)
Regulatory over-recovery		b		(74.1	)		(66.8	)
Capitalised interest		c		81.7			76.0
Deferred tax on US GAAP adjustments				3.7			3.5
Deferred tax due to US GAAP tax differences		d		(262.8	)		(267.2	)
Closing shareholders funds under US GAAP				2,176.2			1,887.9

Notes

(a)   Asset retirement obligations

US GAAP (ASC 410) requires the current recognition of the fair value of future asset retirement obligations (AROs). Under UK GAAP, no equivalent liability has been recognised.  Three asset types have been recognised as creating material AROs; poles, fluid filled cables and switchgear units which use SF6 gas as an insulator.  The future years’ liabilities are valued at current prices and the annual charges and movements in relation to these balances are calculated.  This adjustment has been backdated to 2001, the date that the Combined Group acquired the assets, to calculate the impact on the opening shareholders’ funds at 1 January 2009.

(b)   Regulatory over-recovery

US GAAP requires any regulatory over-recovery to be recognised as a liability.  The position at the end of the previous 5 year price control period (DPCR4) is ring fenced and the liability adjusted as more accurate data is obtained. Any over-recovery generated since then is recognised at the end of the relevant regulatory year and is released on a straight line basis over the following year to offset the reduction income factored into tariffs. Under UK GAAP any income received or receivable in the period the service is provided, in excess of the maximum allowable revenue under the terms of the relevant regulatory regime, is recognised as income.

(c)   Capitalised interest

US GAAP requires that interest is capitalised in relation to capital work in progress. Under UK GAAP, the Combined Group has elected not to capitalise interest.  A representative interest rate is charged on the average of the opening and closing work in progress figures for each year.  This adjustment has been backdated to 2001 to calculate the impact on the opening shareholders’ funds at 1 January 2009.

(d)   Deferred tax

The deferred tax charge has been revised in line with US GAAP which does not allow discounting of the balance.

(e)   Easements reclassification

There is a requirement under US GAAP to classify Easements as intangible assets.  Under UK GAAP these are included as tangible assets.  Therefore a balance sheet reclassification has been calculated.  As at 31 December 2010 this value is £58.3m (2009: £51.4m).  This has no impact on equity shareholders’ funds.

(f)   Debt issue costs reclassification

US GAAP requires debt issue costs to be presented as non-current assets.  In UK GAAP these costs are offset against the debt carrying amount.  Therefore a balance sheet reclassification of £8.7m at 31 December 2010 has been calculated.  This has no impact on equity shareholders’ funds.

(g)   Cash flow statement

The cash flow statement presented in a US GAAP format is summarised below.

	Year ended 31 December 2010			Year ended 31 December 2009
		£m			£m
Operating cash flows		323.8			367.0
Investing cash flows		(868.4	)		(414.2	)
Financing cash flows		544.6			47.2
		0.0			0.0

Under US GAAP movements on overdraft facilities are classified as financing.

CENTRAL NETWORKS

Report of Independent Auditors

To the Members of the Central Networks Group

In our opinion, the accompanying combined balance sheets and the related combined profit and loss accounts and combined cash flow statements present fairly, in all material respects, the combined financial position of the Central Networks Group at 31 December 2010 and 31 December 2009, and the results of their operations and their cash flows for each of the two years in the period ended 31 December 2010 in conformity with accounting principles generally accepted in the United Kingdom.  These financial statements are the responsibility of the Company’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 the standards of the American Institute of Certified Public Accountants (United States).  Those standards 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.

Accounting principles generally accepted in the United Kingdom vary in certain significant respects from accounting principles generally accepted in the United States of America.  Information relating to the nature and effect of such differences is presented in note 24 to the combined financial statements.

/s/  PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

East Midlands, United Kingdom

8 April 2011

EX-99.2

Exhibit 99.2

PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION

PPL CORPORATION, LG&E AND KU ENERGY LLC AND CENTRAL NETWORKS

(UNAUDITED)

On April 1, 2011, PPL Corporation (PPL) completed its acquisition (CN acquisition) of all of the shares of Central Networks Limited and Central Networks East plc, together with certain other assets and liabilities, collectively representing the electricity distribution businesses of Central Networks East and Central Networks West (collectively referred to herein as Central Networks) from E.ON UK plc, a wholly owned subsidiary of E.ON AG. Central Networks’ regulated distribution operations serve 5 million customers in the Midlands area of England. PPL also provides regulated electricity distribution services to 2.6 million customers in southwest England and south Wales through Western Power Distribution (South West) plc and Western Power Distribution (South Wales) plc (collectively referred to herein as WPD). The WPD and Central Networks service territories are contiguous. While synergies are expected from the combined operations, these are not reflected in the Unaudited Pro Forma Condensed Combined Consolidated Financial Information.

The purchase price for the CN acquisition consisted of £3.6 billion (approximately $5.7 billion at April 1, 2011) of cash consideration, including the £1.0 billion (approximately $1.6 billion at April 1, 2011) repayment of affiliate indebtedness, and the assumption of £500 million (approximately $800 million at April 1, 2011) of existing public debt. The cash consideration was primarily funded from borrowings under a Senior Bridge Term Loan Credit Facility (bridge loan).

The Unaudited Pro Forma Condensed Combined Consolidated Financial Information (pro forma financial statements) have been derived from the historical consolidated financial statements of PPL, LG&E and KU Energy LLC (LKE), PPL’s wholly owned subsidiary acquired on November 1, 2010 (LKE acquisition), and the combined financial statements of Central Networks, including additional assets acquired and liabilities assumed as part of the CN acquisition. The pro forma financial statements include an additional ten months of operations of LKE to reflect the results of LKE for the twelve month period ended December 31, 2010, as the Consolidated Statement of Income included in PPL’s annual report on Form 10-K for the year ended December 31, 2010 included only two months of LKE’s results from the date of the LKE acquisition through December 31, 2010.

The Unaudited Pro Forma Condensed Combined Consolidated Statement of Income (pro forma statement of income) for the year ended December 31, 2010 give effect to the CN acquisition and the LKE acquisition as if each was completed on January 1, 2010. The Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet (pro forma balance sheet) as of December 31, 2010 gives effect to the CN acquisition as if it was completed on December 31, 2010.

The historical consolidated financial information has been adjusted in the pro forma financial statements to give effect to pro forma events that are: (1) directly attributable to the CN acquisition; (2) factually supportable; and (3) with respect to the statement of income, expected to have a continuing impact on our results. The pro forma financial statements also include adjustments to reflect the proposed issuance of common stock and equity units, bridge loan borrowings and related fees, and the repayment of the indebtedness owed to E.ON UK plc in connection with the CN acquisition.

Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the pro forma financial statements. Generally accepted accounting principles in the United States permit adjustments to the purchase price adjustments during the measurement period, which may be up to one year from the date of the CN acquisition; therefore, the final amounts recorded as of the date of the CN acquisition may differ materially from the information presented in these pro forma financial statements. These estimates are subject to change pending further review of the assets acquired and liabilities assumed.

The pro forma financial statements have been presented for illustrative purposes only and are not necessarily indicative of the results of operations and financial position that would have been achieved had the pro forma events taken place on the dates indicated, or the future consolidated results of operations or financial position of PPL.

The following pro forma financial statements should be read in conjunction with:

• the accompanying notes to the pro forma financial statements;

• the consolidated financial statements of PPL as of and for the year ended December 31, 2010 which were included in PPL’s annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 28, 2011;

• the unaudited pro forma condensed combined consolidated financial information as of and for the nine months ended September 30, 2010, and the accompanying notes to the pro forma financial statements related to the LKE acquisition included in PPL’s current report on Form  8-K/A filed with the SEC on January 14, 2011;

• the unaudited condensed consolidated financial statements of LKE as of and for the nine months ended September 30, 2010 which were included in PPL’s current report on Form 8-K/A filed with the SEC on November 5, 2010; and

• the audited combined financial statements of Central Networks for the years ended December 31, 2010 and 2009, contained in this current report on Form 8-K.

Pro Forma Condensed Combined Consolidated Statement of Income
(Unaudited)
(Millions of dollars)
	Year ended December 31, 2010
	PPL Corporation (a)			LKE 10 Months Ended October 31, 2010 (a,b)			Pro Forma Adjustments				Pro Forma PPL Corporation			Central Networks (a)		Pro Forma Adjustments				Pro Forma Combined Entity
Operating Revenues
Utility	$	3,668		$	2,121						$	5,789		$	1,052					$	6,841
Unregulated retail electric and gas		415										415									415
Wholesale energy marketing
Realized		4,832			118							4,950									4,950
Unrealized economic activity		(805	)									(805	)								(805	)
Net energy trading margins		2										2									2
Energy-related businesses		409										409									409
Total Operating Revenues		8,521			2,239							10,760			1,052						11,812
Operating Expenses
Operation
Fuel		1,235			710							1,945									1,945
Energy purchases
Realized		2,773			243							3,016									3,016
Unrealized economic activity		(286	)									(286	)								(286	)
Other operation and maintenance		1,756			591							2,347			202		(11	)	(f)		2,538
Depreciation		556			238							794			139		(14	)	(g)		919
Taxes, other than income		238			21							259			100						359
Energy-related businesses		383										383									383
Total Operating Expenses		6,655			1,803							8,458			441		(25	)			8,874
Operating Income		1,866			436							2,302			611		25				2,938
Other Income (Expense) - net		(31	)		(1	)	$	60		(c)		28			3						31
Other-Than-Temporary Impairments		3										3									3
Interest Expense		593			3			34		(c,d)		630			3		113		(h)		746
Interest Expense - Affiliates					131			(131	)	(d)					27		(27	)	(h)
Income (Loss) from Continuing Operations Before Income Taxes	$	1,239		$	301		$	157			$	1,697		$	584	$	(61	)		$	2,220

The accompanying Notes to Pro Forma Condensed Combined Consolidated Financial Statements are an integral part of these pro forma financial statements. See Note 3 for information on pro forma adjustment references.

Pro Forma Condensed Combined Consolidated Statement of Income
(Unaudited)
(Millions of dollars, except share data)
	Year ended December 31, 2010
	PPL Corporation (a)		LKE 10 Months Ended October 31, 2010 (a)		Pro Forma Adjustments			Pro Forma PPL Corporation		Central Networks (a)		Pro Forma Adjustments				Pro Forma Combined Entity
Income Taxes	$	263	$	110	$	61	(e)	$	434	$	140	$	(20	)	(i)	$	554
Income (Loss) from Continuing Operations After Income Taxes		976		191		96			1,263		444		(41	)			1,666
Income from Continuing Operations After Income Taxes Attributable to Noncontrolling Interests		21							21								21
Income (Loss) from Continuing Operations After Income Taxes Attributable to PPL Corporation	$	955	$	191	$	96		$	1,242	$	444	$	(41	)		$	1,645

Earnings Per Share of Common Stock
Income (Loss) from Continuing Operations After Income Taxes Available to PPL Corporation Common Shareowners:
Basic	$2.21			$2.57					$2.92
Diluted	$2.20			$2.57					$2.92
Weighted-Average Shares of Common Stock Outstanding (in thousands)
Basic	431,345	51,800	(j)		483,145	80,000	(j)	563,145
Diluted	431,569	51,800	(j)		483,369	80,000	(j)	563,369

The accompanying Notes to Pro Forma Condensed Combined Consolidated Financial Statements are an integral part of these pro forma financial statements. See Note 3 for information on pro forma adjustment references.

Pro Forma Condensed Combined Consolidated Balance Sheet
(Unaudited)
(Millions of dollars)
	December 31, 2010
	PPL Corporation (a)			Central Networks (a)	Pro Forma Adjustments				Pro Forma Combined Entity
Current Assets
Cash and cash equivalents	$	925			$	(111	)	(k)	$	814
Short-term investments		163								163
Restricted cash and cash equivalents		28								28
Accounts receivable		742	$	1,800		(1,786	)	(l)		756
Unbilled revenues		789		105						894
Fuel, materials and supplies		643		30						673
Prepayments		435		16						451
Price risk management assets		1,918								1,918
Other intangibles		70								70
Assets held for sale		374								374
Regulatory assets		85								85
Other current assets		16		80						96
Total Current Assets		6,188		2,031		(1,897	)			6,322
Investments
Nuclear plant decommissioning trust funds		618								618
Other investments		75								75
Total Investments		693								693
Property, Plant and Equipment, net		20,858		5,287		(527	)	(m)		25,618
Regulatory and Other Noncurrent Assets
Regulatory assets		1,145								1,145
Goodwill		1,761				2,563		(n)		4,324
Other intangibles		966		90		16		(o)		1,072
Price risk management assets		655								655
Other noncurrent assets		571		14		4				589
Total Regulatory and Other Noncurrent Assets		5,098		104		2,583				7,785
Total Assets	$	32,837	$	7,422	$	159			$	40,418

The accompanying Notes to Pro Forma Condensed Combined Consolidated Financial Statements are an integral part of these pro forma financial statements. See Note 3 for information on pro forma adjustment references.

Pro Forma Condensed Combined Consolidated Balance Sheet
(Unaudited)
(Millions of dollars)
		December 31, 2010
		PPL Corporation (a)			Central Networks (a)		Pro Forma Adjustments				Pro Forma Combined Entity
Liabilities and Equity
Current Liabilities
	Short-term debt	$	694		$	4	$	3,035		(q)	$	3,733
	Long-term debt		502									502
	Short term debt - affiliate					1,350		(1,350	)	(l)
	Accounts payable		1,028			281						1,309
	Taxes		134					(13	)	(p)		121
	Interest		166									166
	Dividends		174									174
	Price risk management liabilities		1,144									1,144
	Counterparty collateral		338									338
	Regulatory liabilities		109									109
	Other current liabilities		925			146		(3	)			1,068
	Total Current Liabilities		5,214			1,781		1,669				8,664
Long-term Debt			12,161			771		776		(q)		13,708
Long-term Debt - Affiliates						847		(847	)	(q)
Deferred Credits and Other Noncurrent Liabilities
	Deferred income taxes		2,563			627		(237	)	(u)		2,953
	Investment tax credit		237									237
	Price risk management liabilities		470									470
	Accrued pension obligations		1,496					256		(r)		1,752
	Asset retirement obligations		435			41						476
	Regulatory liabilities		1,031									1,031
	Other deferred credits and noncurrent liabilities		752			4		106		(s)		862
	Total Deferred Credits and Other Noncurrent Liabilities		6,984			672		125				7,781
Commitments and Contingent Liabilities
Equity
	Common stock - $0.01 par value		5					1		(t)		6
	Membership units
	Capital in excess of par value		4,602			416		1,472		(t)		6,490
	Earnings reinvested		4,082			2,935		(3,037	)	(t)		3,980
	Accumulated other comprehensive loss		(479	)								(479	)
	Total Equity Excluding Noncontrolling Interests		8,210			3,351		(1,564	)			9,997
	Noncontrolling Interests		268									268
	Total Equity		8,478			3,351		(1,564	)			10,265
Total Liabilities and Equity		$	32,837		$	7,422	$	159			$	40,418

The accompanying Notes to Pro Forma Condensed Combined Consolidated Financial Statements are an integral part of these pro forma financial statements.  See Note 3 for information on pro forma adjustment references.

NOTES TO PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.   Basis of Pro Forma Presentation

The Unaudited Pro Forma Condensed Combined Consolidated Financial Information (pro forma financial statements) have been derived from the historical consolidated financial statements of PPL, LG&E and KU Energy LLC (LKE), PPL’s wholly owned subsidiary acquired on November 1, 2010 (LKE acquisition), and the combined financial statements of Central Networks, including additional assets acquired and liabilities assumed as part of the CN acquisition. The pro forma financial statements include an additional ten months of operations of LKE to reflect the results of LKE for the twelve month period ended December 31, 2010, as the Consolidated Statement of Income included in PPL’s annual report on Form 10-K for the year ended December 31, 2010, included only two months of LKE’s results from the date of the LKE acquisition through December 31, 2010.

The Unaudited Pro Forma Condensed Combined Consolidated Statement of Income (pro forma statement of income) for the year ended December 31, 2010 give effect to the CN acquisition and the LKE acquisition as if each was completed on January 1, 2010. The Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet (pro forma balance sheet) as of December 31, 2010 gives effect to the CN acquisition as if it was completed on December 31, 2010.

The historical consolidated financial information has been adjusted in the pro forma financial statements to give effect to pro forma events that are: (1) directly attributable to the CN acquisition; (2) factually supportable; and (3) with respect to the statement of income, expected to have a continuing impact on our results. The pro forma financial statements also include adjustments to reflect the proposed issuance of common stock and equity units, bridge loan borrowings and related fees, and the repayment of the indebtedness owed to E.ON UK plc in connection with the CN acquisition.

Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the pro forma financial statements. Generally accepted accounting principles in the United States permit adjustments to the purchase price adjustments during the measurement period, which may be up to one year from the date of an acquisition; therefore, the final amounts recorded as of the date of the CN acquisition may differ materially from the information presented in these pro forma financial statements. These estimates are subject to change pending further review of the assets acquired and liabilities assumed.

In accordance with current accounting guidance, the assets acquired and the liabilities assumed have been measured at fair value by PPL and the difference between the net assets and the CN acquisition purchase price has been recorded as goodwill (this process is generally referred to as a purchase price allocation). The fair value measurements utilize estimates based on key assumptions of the CN acquisition and historical and current market data. These fair value measurements and the related pro forma adjustments included herein may be revised as additional information becomes available and as additional analyses are performed. Therefore, the final purchase price allocation may differ materially from the information presented. The pro forma financial statements also include adjustments to reflect the proposed issuance of common stock and equity units, bridge loan borrowings and related fees, and the repayment of the indebtedness owed to E.ON UK plc in connection with the CN acquisition. The preliminary result of all these adjustments is presented in Note 2.

For the purpose of measuring the estimated fair value of the assets acquired and liabilities assumed, PPL has applied the accounting guidance for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For purposes of measuring the fair value of the majority of property, plant and equipment acquired in the CN acquisition, as reflected in the pro forma financial statements, PPL has determined that fair value equaled the Regulatory Asset Value (RAV) since operations are conducted in a UK regulated environment. RAV is a measure of the value of the capital employed in the regulated network business. It is also a financial construct based on historical costs, adjusted for inflation and represents the value upon which Central Networks earns a return in accordance with the regulatory cost of capital and receives a regulatory depreciation allowance. Because PPL believes there is no current prospect for deregulation in the United Kingdom, it is expected that these operations will remain in a regulated environment for the foreseeable future and this presentation represents the highest and best use of these assets.

The amounts utilized in determining the pro forma adjustments presented on the Pro Forma Condensed Consolidated Financial Statements are also set forth and described in Note 3.

Certain items normally included in the statement of income have been excluded from the pro forma statement of income, including discontinued operations of PPL, the effects of synergies, and certain non-recurring LKE acquisition-related costs incurred during 2010.

Note 2.   Preliminary Purchase Price Allocation and Funding Sources and Uses

Preliminary Purchase Price Allocation

The preliminary allocation of the CN acquisition purchase price to the fair value of assets acquired and liabilities assumed includes pro forma adjustments primarily related to the fair value of property, plant and equipment, pension and other noncurrent liabilities, long-term debt and related deferred income taxes. The preliminary allocation of the purchase price and the resulting goodwill is as follows (in millions):

Working capital	$	(184	)
Property, plant and equipment		4,760
Other noncurrent assets		120
Goodwill		2,563
Long-term debt (a)		(2,467	)
Other noncurrent liabilities		(705	)
Equity purchase price of CN acquisition	$	4,087

(a)     Does not reflect the repayment of affiliated debt

Funding Sources and Uses

Set forth below are the assumed sources and uses (in millions) used in the pro forma financial statements:

Sources			Uses
Common stock	$	2,070	Equity purchase price of CN acquisition	$	4,087
Equity units		750	Repayment of affiliated debt		1,670
Assumed debt		771	Assumed debt		771
Bridge loan		3,035	Estimated transaction costs		209
Cash		111
Total	$	6,737	Total	$	6,737

On April 1, 2011, PPL borrowed £3.6 billion (approximately $5.7 billion at April 1, 2011) under its bridge loan to fund the CN acquisition. The bridge loan borrowings included in these pro forma financial statements assume that the proceeds from the proposed issuance of common stock and equity units were utilized to repay a portion of the bridge loan.

For purposes of these pro forma financial statements pursuant to SEC rules, PPL has assumed that it will raise $2,070 million from the sale of 80 million shares of common equity (at an assumed price of $25.87 per share), $750 million from the sale of equity units (consisting of units with junior subordinated notes bearing interest at an assumed interest rate of 4.0% and purchase contracts for common stock with quarterly contract adjustment payments at a rate of 5.0%), and $3,035 million from borrowings under the bridge loan at an interest rate of 2.6%. A 1/8% change in assumed interest rates would change pre-tax annual interest expense by approximately $4 million. A $1 change in PPL's common stock price (holding the amount of shares from the equity offering constant) would change the amount of the common stock proceeds by approximately $80 million.

The actual sources of permanent debt financing for the CN acquisition are likely to differ from the assumptions set forth above in that PPL does not currently intend to maintain long-term borrowings under the bridge loan, but instead (in lieu thereof) plans to repay the borrowings under the bridge loan by issuing long-term debt securities in one or more offerings in the future as market conditions permit. Such permanent debt financing is not considered in these pro forma financial statements.

Note 3.   Pro Forma Adjustments

The adjustments included in the pro forma financial statements are as follows:

Reclassifications

(a) PPL, LKE 10 months ended October 31, 2010, and Central Networks historical presentation — Certain financial statement line items in the LKE 10 months ended October 31, 2010, and Central Networks statements of operations  have been reclassified to corresponding line items as included in PPL's historical presentation. Certain financial statement line items in the balance sheet of Central Networks have also been reclassified to corresponding line items as included in PPL’s historical presentation. These reclassifications do not have a material impact on the historical operating income, income from continuing operations after income taxes, total assets, total liabilities or equity reported by LKE or Central Networks. In addition, certain line items have been condensed for purposes of the pro forma presentation.

Adjustments to PPL Pro Forma Statement of Income

(b) LKE 10 months ended October 31, 2010 — Reflects an adjustment to include the results of LKE for a twelve month period ended December 31, 2010, as the 2010 Statement of Income included in PPL’s annual report on Form 10-K included only two months of results from the date of the LKE acquisition at November 1, 2010. The PPL balance sheet at December 31, 2010 includes the balances of LKE.

(c) LKE acquisition-related costs — Reflects an adjustment to eliminate LKE acquisition-related costs including a bridge loan facility in support of the LKE acquisition, losses incurred in connection with the termination of interest rate swaps, and other third-party transaction costs. See PPL’s annual report on Form 10-K for the year ended December 31, 2010 filed with the SEC on February 28, 2011 for further discussion of these items.

(d) Interest expense — Reflects a decrease in interest expense from the extinguishment of affiliate indebtedness to subsidiaries of E.ON AG, and replacement of interest expense related to the issuance of senior notes by LKE and first mortgage bonds by KU and LG&E, wholly-owned subsidiaries of LKE, in 2010. These decreases were offset by additional interest expense related to the June 2010 issuance of equity units, amortization of debt issuance costs and the effects of related interest rate swaps. The corresponding impact to utility revenues resulting from the decrease in interest expense was not reflected for purposes of this pro forma statement of income.

(e) Income taxes — Reflects the income tax effect of the pro forma adjustments, which was calculated using an estimated composite statutory income tax rate. Income tax expense includes adjustments for state taxes and certain federal income tax items that are calculated on a combined or consolidated basis. 

Adjustments to Pro Forma Condensed Combined Consolidated Statement of Income

(f) Other operation and maintenance — Reflects adjustments to eliminate the multi-employer pension expense previously recorded by Central Networks and include the estimated net periodic pension cost under US generally accepted accounting principles, including the effect of updated actuarial assumptions.

(g) Depreciation — Reflects a reduction to depreciation expense resulting from the fair value adjustment related to property, plant, and equipment, net.

(h) Interest expense — Reflects a $33 million increase in interest expense from the proposed issuance of equity units, a $80 million increase in interest expense related to borrowings under the bridge loan and a decrease of $27 million in interest expense related to the repayment of affiliate indebtedness to E.ON UK plc.

(i) Income taxes — Reflects the income tax effect of the pro forma adjustments, which was calculated using an estimated UK statutory income tax rate for items directly related to Central Networks and an estimated US statutory income tax rate for items directly related to PPL.

(j) Common stock outstanding —The pro forma weighted-average number of basic and diluted shares of common stock outstanding represents PPL's weighted-average number of basic and diluted shares of common stock outstanding for the year ended December 31, 2010, plus 51.8 million shares to give effect to the 103.5 million shares of PPL common stock issued in June 2010 to be outstanding for the entire year plus an estimated 80.0 million shares of PPL common stock proposed to be issued to repay a portion of borrowings under the bridge loan incurred to pay the purchase price of the CN acquisition.

	December 31, 2010
Basic (in thousands):
PPL weighted-average shares of common stock outstanding	431,345
Effect of June 2010 PPL common stock issuance to be outstanding for the entire year	51,800
Estimated effect of the proposed PPL common stock issuance in connection with the CN acquisition	80,000
	563,145
Diluted (in thousands):
PPL weighted-average shares of common stock outstanding	431,569
Effect of June 2010 PPL common stock issuance to be outstanding for the entire year	51,800
Estimated effect of the proposed PPL common stock issuance in connection with the CN acquisition	80,000
	563,369

Adjustments to Pro Forma Condensed Combined Consolidated Balance Sheet

(k) Cash — Reflects $2,820 million of gross proceeds from the proposed issuance of common stock and equity units and proceeds of $3,035 million from borrowings under the bridge loan. These cash proceeds plus an estimated $111 million of cash on hand were used to pay the $4,087 million equity purchase price, $1,670 million repayment of affiliate indebtedness owed to E.ON UK plc at closing, and approximately $209 million in costs related to bridge loan borrowings, proposed common stock and equity unit issuances, and other CN acquisition related costs.

(l) Accounts receivable and Short-term debt - affiliate — Reflects the elimination of a net receivable balance due from E.ON UK plc, which was settled upon acquisition.

(m) Property, Plant, and Equipment, net— Reflects an adjustment to record the tangible fixed assets related to the regulated operations at fair value. PPL has determined that fair value for a majority of the tangible fixed assets equaled RAV since operations are conducted in a regulated environment. RAV is a measure of the value of the capital employed in the regulated network business. It is also a financial construct based on historical costs, adjusted for inflation and represents the value upon which Central Networks earns a return in accordance with the regulatory cost of capital and receives a regulatory depreciation allowance. Since there is no current prospect for deregulation in the United Kingdom, it is expected that these operations will remain in a regulated environment for the foreseeable future and this presentation represents the highest and best use of these assets.

(n) Goodwill — Reflects the preliminary estimate of the excess of the CN acquisition purchase price paid over the net fair value of Central Network’s assets acquired and liabilities assumed.

(o) Other intangibles — Reflects the preliminary estimate of the fair value of certain contracts acquired in connection with the CN acquisition.

(p) Taxes — Reflects a decrease in taxes payable related to the estimated tax benefit of certain CN acquisition costs that are required to be expensed as incurred.

(q) Short-term debt, Long-term Debt and Long-term Debt - Affiliates— The increase in short-term debt reflects an adjustment to recognize $3,035 million in borrowings under the bridge loan to fund the CN acquisition. The increase in long-term debt reflects adjustments to recognize $750 million of equity units classified as debt on the pro forma balance sheet and an increase of $26 million to recognize the preliminary estimate of the fair value of assumed debt. The decrease in long-term debt – affiliates reflects an adjustment to fully repay affiliate indebtedness owed to E.ON UK plc at the date of the CN acquisition, in accordance with the purchase agreement.

(r) Accrued pension obligations — Reflects an adjustment to recognize a liability for the unfunded status of the defined benefit pension plan transferred by E.ON UK plc to PPL in connection with the CN acquisition, in accordance with US generally accepted accounting principles.

(s) Other deferred credits and noncurrent liabilities — Represents the present value of the contract adjustment payments that are payable in accordance with the proposed issuance of the equity units.

(t) Equity — The pro forma balance sheet reflects the elimination of $3,351 million of Central Networks' adjusted equity balances and the recognition of $2,070 million from the proposed sale of PPL common stock to repay a portion of borrowings under the bridge loan to pay the purchase price of the CN acquisition. Capital in excess of par has been reduced by $62 million for common stock issuance costs and $12 million, net of a $7 million tax benefit, for issuance costs related to the common stock purchase contracts portion of the equity units. The remaining estimated CN transaction-related costs of $103 million, net of a $21 million tax benefit, are shown as an adjustment to earnings reinvested to reflect the impact of accounting guidance applicable to business combinations, which requires that these costs be expensed as incurred (the transaction-related costs include non-recurring charges of approximately $30 million, net of a $13 million tax benefit, which would be charged to interest expense). In addition, the equity adjustment includes a reduction of approximately $106 million reflecting the estimated fair value of the common stock purchase contracts based on the present value of the contract adjustment payments that are payable in accordance with the proposed issuance of the equity units.

(u) Deferred income tax assets and liabilities — Represents a $237 million adjustment to decrease net deferred tax liabilities for certain adjustments related to the assets acquired and liabilities assumed, excluding goodwill, and transaction costs using an estimated UK statutory income tax rate for items directly related to Central Networks and an estimated US statutory income tax rate for items directly related to PPL.