**Exhibit 99.01**

 

Cautionary Factors for Louisville Gas andElectric Company and Kentucky Utilities Company

 

 

The Private Securities Litigation Reform Act of1995 provides a “safe harbor” for forward-looking statements to encourage suchdisclosures without the threat of litigation providing those statements areidentified as forward-looking and are accompanied by meaningful, cautionarystatements identifying important factors that could cause the actual results todiffer materially from those projected in the statement. Forward-lookingstatements have been and will be made in written documents and oralpresentations of Powergen plc (“Powergen”), LG&E Energy Corp. (“LG&EEnergy”), Louisville Gas and Electric Company (“LG&E”) and KentuckyUtilities Company (“KU”) (the latter entities, LG&E and KU, collectively,the “Companies”). Such statements are based on management’s beliefs as well asassumptions made by and information currently available to management. Whenused in the Companies’ documents or oral presentations, the words “anticipate,”“estimate,” “expect,” “objective” and similar expressions are intended toidentify forward-looking statements. In addition to any assumptions and otherfactors referred to specifically in connection with such forward-looking statements,factors that could cause the Companies’ actual results to differ materiallyfrom those contemplated in any forward-looking statements include, amongothers, the following:

 

*                 Increasedcompetition in the utility, natural gas and electric power marketingindustries, including effects of: decreasing margins as a result of competitivepressures; industry restructuring initiatives; transmission system operationand/or administration initiatives; recovery of investments made undertraditional regulation; nature of competitors entering the industry; retailwheeling; a new pricing structure; and former customers entering the generationmarket;

 

*                 Changing marketconditions and a variety of other factors associated with physical energy andfinancial trading activities including, but not limited to, price, basis,credit, liquidity, volatility, capacity, transmission, currency, interest rateand warranty risks;

 

*                 Risks associatedwith price risk management strategies intended to mitigate exposure to adversemovement in the prices of electricity and natural gas on both a global andregional basis;

 

*                 Legal, regulatory,public policy-related and other developments which may result inredetermination, adjustment 

 

 

 

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        or cancellation of revenuepayment streams paid to, or increased capital expenditures or operating andmaintenance costs incurred by, the Companies, in connection with rate, fuel,transmission, environmental and other proceedings applicable to the Companies;

 

*                 Legal, regulatory,economic and other factors which may result in redetermination or cancellationof revenue payment streams under power sales agreements resulting in reducedoperating income and potential asset impairment related to the Companies’investments in independent power production ventures, as applicable;

 

*                 Economic conditionsincluding inflation rates and monetary fluctuations;

 

*                 Trade, monetary,fiscal, taxation, and environmental policies of governments, agencies andsimilar organizations in geographic areas where the Companies have a financialinterest;

 

*                 Customer businessconditions including demand for their products or services and supply of laborand materials used in creating their products and services;

 

*                 Financial orregulatory accounting principles or policies imposed by the FinancialAccounting Standards Board, the Securities and Exchange Commission, the FederalEnergy Regulatory Commission, state public utility commissions, state entitieswhich regulate natural gas transmission, gathering and processing and similarentities with regulatory oversight;

 

*                 Availability orcost of capital such as changes in: interest rates, market perceptions of theutility and energy-related industries, the Companies or any of theirsubsidiaries or security ratings;

 

*                 Factors affectingutility and non-utility operations such as unusual weather conditions;catastrophic weather-related damage; unscheduled generation outages, unusualmaintenance or repairs; unanticipated changes to fossil fuel, or gas supplycosts or availability due to higher demand, shortages, transportation problemsor other developments; environmental incidents; or electric transmission or gaspipeline system constraints;

 

*                 Employee workforcefactors including changes in key executives, collective bargaining agreementswith union employees, or work stoppages;

 

*                 Rate-settingpolicies or procedures of regulatory entities, including environmentalexternalities;

 

 

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*                 Social attitudesregarding the utility, natural gas and power industries;

 

*                 Identification ofsuitable investment opportunities to enhance shareholder returns and achievelong-term financial objectives through business acquisitions;

 

*                 Some future projectinvestments made by the Companies, respectively, as applicable, could take theform of minority interests, which would limit the Companies’ ability to controlthe development or operation of the project;

 

*                 Legal andregulatory delays and other unforeseeable obstacles associated with mergers,acquisitions and investments in joint ventures;

 

*                 Costs and othereffects of legal and administrative proceedings, settlements, investigations,claims and matters, including but not limited to those described in Notes 3, 11and 15 (for LG&E) and Notes 3, 11 and 14 (for KU) of the respective Notesto Financial Statements of the Companies’ Annual Reports on Form 10-K for theyear ended December 31, 2002, and items under the caption Commitments andContingencies;

 

*                 Technologicaldevelopments, changing markets and other factors that result in competitivedisadvantages and create the potential for impairment of existing assets;

 

*                 Factors associatedwith non-regulated investments, including but not limited to: continuedviability of partners, foreign government actions, foreign economic andcurrency risks, political instability in foreign countries, partnershipactions, competition, operating risks, dependence on certain customers,third-party operators, suppliers and domestic and foreign environmental andenergy regulations;

 

*                 Other business orinvestment considerations that may be disclosed from time to time in theCompanies’ Securities and Exchange Commission filings or in other publiclydisseminated written documents;

 

*                 Factors affectingthe realization of anticipated cost savings associated with the merger betweenLG&E Energy and KU Energy Corporation including national and regionaleconomic conditions, national and regional competitive conditions, inflationrates, weather conditions, financial market conditions, and synergies resultingfrom the business combination;

 

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*                 Factors associatedwith market conditions in the pipeline construction and repair industry, bothnational and international, including, general levels of industry activity,fuels and liquids price levels, competition, foreign economic, currency, regulatoryand operating risks and dependence on certain customers, suppliers andoperators;

 

*                 Factors associatedwith, resulting from or affecting the merger transaction between LG&EEnergy and Powergen, including the integration of the existing business andoperations of LG&E and KU as part of the Powergen group of companiesthereunder, as well as national and international economic, financial market,regulatory and industry conditions or environments applicable to Powergen andits subsidiaries, including LG&E and KU, in the future.

 

*                 Factors associatedwith, resulting from or affecting the acquisition of Powergen and LG&EEnergy by E.ON AG, including the integration of the existing business andoperations of LG&E and KU as part of the E.ON group of companiesthereunder, as well as national and international economic, financial market,regulatory and industry conditions or environments applicable to E.ON and itssubsidiaries, including LG&E and KU, in the future.

 

The Companies undertake no obligation to publiclyupdate or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise.

 

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