**Exhibit 99.01**

 

Cautionary Factors for Louisville Gas and ElectricCompany 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 E.ON AG (“E.ON”),  E.ON U.S. LLC (“E.ON U.S.”),Louisville Gas and Electric Company (“LG&E”) and Kentucky Utilities Company(“KU”) (the latter entities, LG&E and KU, collectively, the “Companies”).Such statements are based on management’s beliefs as well as assumptions madeby and information currently available to management.

 

When used in the Companies’ documents or oralpresentations, the words “anticipate,” “estimate,” “expect,” “objective” andsimilar 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, (a) those factorsdescribed under caption Item 1A. Risk Factors of the Companies’ Annual Reportof Form 10-K for the year ended December 31, 2005 and (b) thefollowing:

 

•                  Increased competition in the utility, naturalgas and 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 ofother factors 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;

 

•                  Legal, regulatory, public policy-related andother developments which may result in re-determination, 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,safety and security and other proceedings or rules applicable to theCompanies;

 

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•                  Legal, regulatory, economic and other factorswhich may result in re-determination or cancellation of revenue paymentstreams under 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 interest rates,inflation rates and monetary or currency 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 demandfor their products or services and supply of labor and materials used increating their products and services;

 

•                  Financial or regulatory accounting principlesor policies imposed by the Public Company Accounting Oversight Board, 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 similar entitieswith regulatory oversight;

 

•                  Availability or cost of capital such aschanges in: interest rates, market perceptions of the utility andenergy-related industries, the Companies or any of their subsidiaries orsecurity ratings;

 

•                  Factors affecting utility operations such asunusual weather conditions; catastrophic weather-related damage; unscheduledgeneration outages, unusual maintenance or repairs; unanticipated changes tofossil fuel, or gas supply costs or availability due to higher demand, shortages,transportation problems or other developments; environmental incidents; orelectric transmission or gas pipeline system constraints;

 

•                  Factors which may affect the Companies’utility operations or the demand for the Companies’ electric power or gas suchas natural disasters, wars, terrorist acts or the effects thereof (includingincreased security costs), embargoes and other catastrophic events;

 

•                  Employee workforce factors including changesin key executives, collective bargaining agreements with union employees, orwork stoppages;

 

•                  Rate-setting policies or procedures ofregulatory entities, including environmental externalities;

 

•                  Social attitudes regarding the utility,natural gas and power industries;

 

•                  Identification of suitable investment opportunitiesto enhance shareholder returns and achieve long-term financial objectivesthrough business acquisitions;

 

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•                  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;

 

•                  The resolution, costs and other effects oflegal and administrative proceedings, settlements, investigations, claims andmatters, including but not limited to those described in Notes 3, 10 and 16(for LG&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 yearended December 31, 2005, and items under the caption Item 3, LegalProceedings;

 

•                  Technological developments, changing marketsand other factors that result in competitive disadvantages and create thepotential for impairment of existing assets;

 

•                  Other business or investment considerationsthat may be disclosed from time to time in the Companies’ Securities andExchange Commission filings or in other publicly disseminated written documents;

 

•                  Factors affecting the realization ofanticipated cost savings associated with the merger between E.ON U.S. (formerlyLG&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;

 

•                  Factors associated with, resulting from oraffecting the acquisitions and operations of E.ON U.S. (formerly LG&EEnergy) by E.ON (or, previously, by Powergen plc), including the integration ofthe existing business and operations of LG&E and KU as part of theE.ON group of companies thereunder, as well as national and internationaleconomic, financial market, regulatory and industry conditions or environmentsapplicable to E.ON and its subsidiaries, including LG&E and KU, in thefuture.

 

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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