**Exhibit 99.01**

 

Cautionary Factors for Louisville Gas and Electric Company and KentuckyUtilities Company

 

The Private Securities Litigation Reform Act of 1995 provides a “safeharbor” for forward-looking statements to encourage such disclosures withoutthe threat of litigation providing those statements are identified asforward-looking and are accompanied by meaningful, cautionary statementsidentifying important factors that could cause the actual results to differmaterially from those projected in the statement. Forward-looking statementshave been and will be made in written documents and oral presentations of E.ONAG (“E.ON”),  LG&E Energy LLC (“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-lookingstatements, factors that could cause the Companies’ actual results to differmaterially from those contemplated in any forward-looking statements include,among others, the following:

 

•                  Increasedcompetition in the utility, natural gas and electric power marketing industries,including effects of: decreasing margins as a result of competitive pressures;industry restructuring initiatives; transmission system operation and/oradministration initiatives; recovery of investments made under traditionalregulation; nature of competitors entering the industry; retail wheeling; a newpricing structure; and former customers entering the generation market;

 

•                  Changingmarket conditions and a variety of other factors associated with physicalenergy and financial trading activities including, but not limited to, price,basis, credit, liquidity, volatility, capacity, transmission, currency,interest rate and warranty risks;

 

•                  Risksassociated with price risk management strategies intended to mitigate exposureto adverse movement in the prices of electricity and natural gas on both aglobal and regional basis;

 

•                  Legal,regulatory, public policy-related and other developments which may result in re-determination,adjustment or cancellation of revenue payment streams paid to, or increasedcapital expenditures or operating and maintenance costs incurred by, theCompanies, in connection with rate, fuel, transmission, environmental, consumerchoice, safety and security and other proceedings or rules applicable tothe Companies;

 

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•                  Legal,regulatory, economic and other factors which may result in re-determination orcancellation of revenue payment streams under power sales agreements resultingin reduced operating income and potential asset impairment related to theCompanies’ investments in independent power production ventures, as applicable;

 

•                  Economicconditions including interest rates, inflation rates and monetary or currencyfluctuations;

 

•                  Trade,monetary, fiscal, taxation, and environmental policies of governments, agenciesand similar organizations in geographic areas where the Companies have afinancial interest;

 

•                  Customerbusiness conditions including demand for their products or services and supplyof labor and materials used in creating their products and services;

 

•                  Financialor regulatory accounting principles or policies imposed by the Public CompanyAccounting Oversight Board, Financial Accounting Standards Board, theSecurities and Exchange Commission, the Federal Energy Regulatory Commission,state public utility commissions, state entities which regulate natural gastransmission, gathering and processing and similar entities with regulatoryoversight;

 

•                  Availabilityor cost of capital such as changes in: interest rates, market perceptions ofthe utility and energy-related industries, the Companies or any of theirsubsidiaries or security ratings;

 

•                  Factorsaffecting utility operations such as unusual weather conditions; catastrophicweather-related damage; unscheduled generation outages, unusual maintenance orrepairs; unanticipated changes to fossil fuel, or gas supply costs oravailability due to higher demand, shortages, transportation problems or otherdevelopments; environmental incidents; or electric transmission or gas pipelinesystem constraints;

 

•                  Factorswhich may affect the Companies’ utility operations or the demand for theCompanies’ electric power or gas such as natural disasters, wars, terroristacts or the effects thereof (including increased security costs), embargoes andother catastrophic events;

 

•                  Employeeworkforce factors including changes in key executives, collective bargainingagreements with union employees, or work stoppages;

 

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

 

•                  Socialattitudes regarding the utility, natural gas and power industries;

 

•                  Identificationof suitable investment opportunities to enhance shareholder returns and achievelong-term financial objectives through business acquisitions;

 

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•                  Somefuture project investments made by the Companies, respectively, as applicable,could take the form of minority interests, which would limit the Companies’ability to control the development or operation of the project;

 

•                  Legaland regulatory delays and other unforeseeable obstacles associated withmergers, acquisitions and investments in joint ventures;

 

•                  Theresolution, costs and other effects of legal and administrative proceedings,settlements, investigations, claims and matters, including but not limited tothose described in Notes 3, 11 and 17 (for LG&E) and Notes 3, 11 and 16(for KU) of the respective Notes to Financial Statements of the Companies’Annual Reports on Form 10-K for the year ended December 31, 2004, anditems under the caption Item 3, Legal Proceedings;

 

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

 

•                  Otherbusiness or investment considerations that may be disclosed from time to timein the Companies’ Securities and Exchange Commission filings or in otherpublicly disseminated written documents;

 

•                  Factorsaffecting the realization of anticipated cost savings associated with themerger between LG&E Energy and KU Energy Corporation including national andregional economic conditions, national and regional competitive conditions,inflation rates, weather conditions, financial market conditions, and synergiesresulting from the business combination;

 

•                  Factorsassociated with, resulting from or affecting the acquisition and operation ofLG&E Energy by E.ON, 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 publicly update or revise anyforward-looking statements, whether as a result of new information, futureevents or otherwise.

 

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