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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 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
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 1-905
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
PENNSYLVANIA POWER & LIGHT COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
PP&L RESOURCES, INC.
TWO NORTH NINTH STREET
ALLENTOWN, PENNSYLVANIA 18101-1179
<PAGE> Thirty South Seventeenth Street
Philadelphia, PA 19103-4094
Telephone (215) 575-5000
Price Waterhouse LLP (logo appears here)
Report of Independent Accountants
June 16, 1997
To the Employee Benefit Plan Board of
Pennsylvania Power & Light Company
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
Pennsylvania Power & Light Company Employee Stock Ownership Plan
(the Plan) at December 31, 1996 and 1995, and the changes in net
assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles. 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 generally accepted
auditing standards 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 the
opinion expressed above.
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules of assets held for investment purposes at December 31,
1996 and of reportable transactions for the year ended December
31, 1996 are presented for purposes 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. The
supplemental schedules as of and for the year ended December 31,
1996 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.
(Price Waterhouse signature)
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<TABLE>
PENNSYLVANIA POWER & LIGHT COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1996 AND 1995
<CAPTION>
ASSETS 1996 1995
<S> <C> <C>
INVESTMENT - Common stock of PP&L Resources,
Inc. at fair value;.................................. $135,511,147 $146,285,700
DIVIDENDS RECEIVABLE................................... 2,349,668 2,340,352
137,860,815 148,626,052
LIABILITIES
DIVIDENDS PAYABLE TO PARTICIPANTS.......... 2,349,668 2,340,352
NET ASSETS AVAILABLE FOR BENEFITS
(100% VESTED)........................................ $135,511,147 $146,285,700
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
PENNSYLVANIA POWER & LIGHT COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
1996 1995
<S> <C> <C>
INCREASES:
Employer contributions............................. $6,742,961 $6,706,046
Dividend income.................................... 9,516,873 9,496,308
Net appreciation of investment.................................... 34,173,678
Total increases................................ 16,259,834 50,376,032
DECREASES:
Dividend distributions to participants............. 9,516,873 9,496,308
Distributions of stock and cash to active
and terminated participants...................... 5,076,878 5,568,654
Net depreciation of investment..................... 12,440,636
Total decreases................................ 27,034,387 15,064,962
NET INCREASE(DECREASE) .............................. (10,774,553) 35,311,070
NET ASSETS AVAILABLE FOR BENEFITS AT
BEGINNING OF YEAR.................................. 146,285,700 110,974,630
NET ASSETS AVAILABLE FOR BENEFITS AT
END OF YEAR........................................ $135,511,147 $146,285,700
See accompanying notes to financial statements.
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PENNSYLVANIA POWER & LIGHT COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
1. PLAN DESCRIPTION
The Pennsylvania Power & Light Company Employee Stock Ownership Plan
(Plan) was adopted effective January 1, 1975 and most recently amended
effective January 1, 1996. Effective April 27, 1995, PP&L Resources,
Inc. (Resources), became the parent holding company of Pennsylvania
Power & Light Company (PP&L). As of that date, the holders of PP&L
common stock, including the Plan, became holders of Resources common
stock. The Plan's cost basis for its investment was not affected by
this change from PP&L common stock to Resources' common stock.
Through April 1995, contributions to the Plan were used to purchase
shares of common stock of PP&L for employees. Effective April 27,
1995, amounts contributed to the Plan are used to purchase shares of
common stock of Resources for employees.
The Plan requires that dividends on shares credited to participants'
accounts be paid in cash. Under existing income tax laws, PP&L or
Resources is permitted to deduct the amount of those dividends for
income tax purposes and to contribute the resulting tax savings
(dividend-based contribution) to the Plan. The dividend-based
contribution is used to buy shares of Resources' common stock and is
expressly conditioned upon the deductibility of the contribution for
federal income tax purposes.
Substantially all full-time employees of PP&L who have completed one
year of service are eligible to participate in the Plan. All amounts
contributed to the Plan are invested in shares of common stock of
Resources. The shares of common stock purchased with the dividend-
based contribution 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.
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 the
Trustee.
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 PP&L, 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
PP&L and whose account balance exceeds $3,500 may defer distribution
of the shares of stock in the account until the earlier of age 65 or
death. Participants who terminate service with PP&L 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.
A 10% federal excise tax is applicable to withdrawals from the Plan
made, generally, before a participant reaches age 59-1/2.
Resources 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 a procedure for distribution of all shares to
participants would be established.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974.
2. SIGNIFICANT ACCOUNTING POLICIES
A. The Plan's common stock investment is stated at fair value. Fair
value is the quoted market price of Resources' common stock.
Realized gains and losses from the sale of stock by the Trustee
are based on the average cost of common stock held at the time of
sale.
B. Dividend income and dividend distributions to participants are
recorded on dividend record dates.
C. Distributions of stock and cash to terminated participants not
electing to defer distributions are recorded in the Plan year
during which service is terminated. Otherwise, such distributions
are recorded as stock certificates are issued and cash is paid.
D. Distributions of stock and cash to active participants electing to
withdraw eligible shares are recorded in the Plan year in which
elections are received.
E. As of December 31, 1996 and 1995, net assets available for
benefits did not include any benefits due to participants who have
withdrawn from participation in the Plan.
F. Certain amounts from prior years' financial statements have been
reclassified to conform to the current year presentation.
3. ADMINISTRATION
The Plan is administered by an Employee Benefit Plan Board (Board),
composed of certain PP&L officers, appointed by the Board of Directors
of PP&L. The Board of Directors of PP&L has appointed Mellon Bank as
Trustee of the Plan.
Expenses incurred in the administration of the Plan are paid by PP&L
and the facilities of PP&L are used by the Plan at no charge.
4. 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 409A of the Internal Revenue Code.
Under present Federal income tax laws and regulations, a qualified
plan is not taxed on contributions received from Resources 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 Resources until that participant receives a
distribution from the plan.
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PENNSYLVANIA POWER & LIGHT COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
<CAPTION>
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Identity of Issue,
Borrower, Lessor, Current
or Similar Party Description of Investment Value Cost
<S> <C> <C> <C>
PP&L Resources, Inc. Common Stock - $0.01 par value $135,511,147 $101,125,856
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PENNSYLVANIA POWER & LIGHT COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
<CAPTION>
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
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
CURRENT
VALUE OF
IDENTITY OF TOTAL TOTAL ASSET ON NET
PARTY PURCHASE SELLING COST OF TRANSACTION GAIN
INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C>
The Employee Benefit PP&L Resources, Inc.
Plan Board of Common Stock:
Pennsylvania Power & Purchase of 288,852
Light Company, as shares $6,742,961 $6,742,961
Administrator for the
Pennsylvania Power & Sale of 160,999 shares $3,744,025 $2,452,659 $3,744,025 $1,291,366
Light Company Employee
Stock Ownership Plan
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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.
Pennsylvania Power & Light Company
Employee Stock Ownership Plan
By: (Signed) John M. Chappelear
John M. Chappelear
Chairman, Employee Benefit Plan Board
Pennsylvania Power & Light Company
Dated: June 26, 1997