**Exhibit 99.1**

 

CautionaryFactors for Louisville Gas and Electric Company and Kentucky Utilities Company

 

 

ThePrivate Securities Litigation Reform Act of 1995 provides a “safe harbor” forforward-looking statements to encourage such disclosures without the threat oflitigation providing those statements are identified as forward-looking and areaccompanied by meaningful, cautionary statements identifying important factorsthat could cause the actual results to differ materially from those projectedin the statement. Forward-looking statements have been and will be made inwritten documents and oral presentations of E.ON AG (“E.ON”), Powergen Limited(“Powergen”), LG&E Energy LLC (“LG&E Energy”), Louisville Gas andElectric Company (“LG&E”) and Kentucky Utilities Company (“KU”) (the latterentities, LG&E and KU, collectively, the “Companies”). Such statements arebased on management’s beliefs as well as assumptions made by and informationcurrently available to management. When used in the Companies’ documents ororal presentations, the words “anticipate,” “estimate,” “expect,” “objective”and similar expressions are intended to identify forward-looking statements. Inaddition to any assumptions and other factors referred to specifically inconnection with such forward-looking statements, factors that could cause theCompanies’ actual results to differ materially from those contemplated in anyforward-looking statements include, among others, the following:

 

•                  Increased competition in the utility, natural gasand electric power marketing industries, including effects of: decreasingmargins as a result of competitive pressures; industry restructuringinitiatives; transmission system operation and/or administration initiatives;recovery of investments made under traditional regulation; nature ofcompetitors entering the industry; retail wheeling; a new pricing structure;and former customers entering the generation market;

 

•                  Changing market conditions and a variety of otherfactors associated with physical energy and financial trading activitiesincluding, but not limited to, price, basis, credit, liquidity, volatility,capacity, transmission, currency, interest rate and warranty risks;

 

•                  Risks associated with price risk managementstrategies intended to mitigate exposure to adverse movement in the prices ofelectricity and natural gas on both a global and regional basis;

 

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•                  Legal, regulatory, public policy-related andother developments which may result in redetermination, adjustment orcancellation of revenue payment streams paid to, or increased capitalexpenditures or operating and maintenance costs incurred by, the Companies, inconnection with rate, fuel, transmission, environmental consumer choice, safetyand security and other proceedings or rules applicable to the Companies;

 

•                  Legal, regulatory, economic and other factorswhich may result in redetermination or cancellation of revenue payment streamsunder power sales agreements resulting in reduced operating income andpotential asset impairment related to the Companies’ investments in independentpower production ventures, as applicable;

 

•                  Economic conditions including inflation rates andmonetary fluctuations;

 

•                  Trade, monetary, fiscal, taxation, andenvironmental policies of governments, agencies and similar organizations ingeographic areas where the Companies have a financial interest;

 

•                  Customer business conditions including demand fortheir products or services and supply of labor and materials used in creatingtheir products and services;

 

•                  Financial or regulatory accounting principles orpolicies imposed by the Financial Accounting Standards Board, the Securitiesand Exchange Commission, the Federal Energy Regulatory Commission, state publicutility commissions, state entities which regulate natural gas transmission,gathering and processing and similar entities with regulatory oversight;

 

•                  Availability or cost of capital such as changesin: interest rates, market perceptions of the utility and energy-relatedindustries, the Companies or any of their subsidiaries or security ratings;

 

•                  Factors affecting utility and non-utilityoperations such as unusual weather conditions; catastrophic weather-relateddamage; unscheduled generation outages, unusual maintenance or repairs;unanticipated changes to fossil fuel, or gas supply costs or availability dueto higher demand, shortages, transportation problems or other developments;environmental incidents; or electric transmission or gas pipeline systemconstraints;

 

•                  Employee workforce factors including changes inkey executives, collective bargaining agreements with union employees, or workstoppages;

 

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•                  Rate-setting policies or procedures of regulatoryentities, including environmental externalities;

 

•                  Social attitudes regarding the utility, naturalgas and power industries;

 

•                  Identification of suitable investmentopportunities to enhance shareholder returns and achieve long-term financialobjectives through business acquisitions;

 

•                  Some future project investments made by theCompanies, respectively, as applicable, could take the form of minorityinterests, which would limit the Companies’ ability to control the developmentor operation of the project;

 

•                  Legal and regulatory delays and otherunforeseeable obstacles associated with mergers, acquisitions and investmentsin joint ventures;

 

•                  Costs and other effects of legal andadministrative proceedings, settlements, investigations, claims and matters,including but not limited to those described in Notes 3, 11 and 16 (forLG&E) and Notes 3, 11 and 15 (for KU) of the respective Notes to FinancialStatements of the Companies’ Annual Reports on Form 10-K for the year endedDecember 31, 2003, and items under the caption Commitments and Contingencies;

 

•                  Technological developments, changing markets andother factors that result in competitive disadvantages and create the potentialfor impairment of existing assets;

 

•                  Factors associated with non-regulatedinvestments, including but not limited to: continued viability of partners,foreign government actions, foreign economic and currency risks, politicalinstability in foreign countries, partnership actions, competition, operatingrisks, dependence on certain customers, third-party operators, suppliers anddomestic and foreign environmental and energy regulations;

 

•                  Other business or investment considerations thatmay be disclosed from time to time in the Companies’ Securities and ExchangeCommission filings or in other publicly disseminated written documents;

 

•                  Factors affecting the realization of anticipatedcost savings associated with the merger between LG&E Energy and KU EnergyCorporation including national and regional economic conditions, national andregional competitive conditions, inflation rates, weather conditions, financialmarket

 

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conditions, and synergies resulting from the businesscombination;

 

•                  Factors associated with market conditions in thepipeline construction and repair industry, both national and international,including, general levels of industry activity, fuels and liquids price levels,competition, foreign economic, currency, regulatory and operating risks anddependence on certain customers, suppliers and operators;

 

•                  Factors associated with, resulting from oraffecting the merger transaction between LG&E Energy and Powergen,including the integration of the existing business and operations of LG&Eand KU as part of the Powergen group of companies thereunder, as well asnational and international economic, financial market, regulatory and industryconditions or environments applicable to Powergen and its subsidiaries,including LG&E and KU, in the future.

 

•                  Factors associated with, resulting from oraffecting the acquisition and operation of Powergen and LG&E Energy byE.ON, including the integration of the existing business and operations ofLG&E and KU as part of the E.ON group of companies thereunder, as well asnational and international economic, financial market, regulatory and industryconditions or environments applicable to E.ON and its subsidiaries, includingLG&E and KU, in the future.

 

TheCompanies undertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information, futureevents or otherwise.

 

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