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Press Release
	220 West Main Street Louisville, KY 40232
Media Contact: Chip Keeling
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LG&E Energy Corp. Reports 2001 Utility Earnings

        (LOUISVILLE, KY—February 21, 2002)—LG&E Energy Corp. today reported earnings of its two utility subsidiaries, Louisville Gas and Electric Company and Kentucky Utilities Company, for the year ended December 2001.

Full-Year 2001 Results

Louisville Gas & Electric Company—2001 net income available for common stock was $102 million, down $3 million from the $105 million earned in 2000. Primary factors driving LG&E's 2001 earnings included $20 million higher net revenues from electric and gas sales and $5 million lower interest expense offset by higher other operating and maintenance expenses of approximately $27 million.

        Electric sales margins were higher than in 2000 primarily resulting from the lower cost of power purchased. Gas sales margins increased as a result of a gas rate increase ordered by the Kentucky Public Service Commission in September 2000, partially offset by a decrease in volumes sold.

        Items contributing to the increase in other operating and maintenance expenses included an increase in pension and related benefits expense ($12 million), amortization of deferred costs from the Company's work force transition separation program ($13 million) and increases in bad debt expenses, property insurance, one-utility program cost amortization and maintenance costs ($6 million). These higher costs were offset in part by lower salary and related benefit expenses due to the work force reductions during 2001. The lower interest expense is primarily attributable to reductions in short-term interest rates throughout 2001.

Kentucky Utilities Company—2001 net income available for common stock was $94 million, up $1 million from the $93 million earned in 2000. 2001 net electric revenues were relatively flat when compared to 2000.

        Primary factors driving KU's 2001 earnings included an increase in other operating and maintenance costs of approximately $6 million, non-recurring charges of approximately $7 million as a result of the Company's work force transition separation program, lower depreciation and amortization expense of approximately $8 million mainly resulting from a settlement order in December 2001 from the Kentucky Public Service Commission (KPSC), lower property and other taxes of $3 million and approximately $5 million of lower interest expense resulting from reductions in short-term interest rates throughout the year.

        Items contributing to the increase in other operating and maintenance expenses included an increase in pension and related benefits expense ($7 million), amortization of deferred costs from the Company's work force transition separation program ($5 million), offset in part by lower salary and related benefit expenses resulting from workforce reductions during 2001 and decreased power generation maintenance expenses.

Fourth Quarter 2001 Results

Louisville Gas & Electric Company—LG&E earned $91 million in net income available for common stock in the fourth quarter 2001 representing a $65 million increase over the amount earned during the same period in 2000. Pursuant to the settlement order received from the KPSC in December 2001, LG&E reversed the $144 million non-recurring charge taken earlier in the year by recording a regulatory asset and booked additional operating expense of $13 million representing amortization of the regulatory asset for 2001. Operating revenues were $72 million lower in the fourth quarter 2001

compared to the same period in 2000 primarily due to unseasonably mild weather and lower fuel costs billed.

Kentucky Utilities Company—KU earned $55 million in net income available for common stock in the fourth quarter 2001, an increase of $31 million as compared to the same period in 2000. This increase was primarily due to the effects of the settlement order received from the KPSC in December 2001. Pursuant to the order, KU reversed $57 million of the non-recurring charge taken earlier in the year by recording a regulatory asset, booked additional operating expenses of $5 million representing amortization of the regulatory asset for 2001 and reduced depreciation expense by $6 million.

        LG&E Energy Corp., headquartered in Louisville, Ky., is a diversified energy services company that is a member of the Powergen plc (LSE: NYSE: PWG) family of companies. LG&E Energy owns and operates Louisville Gas and Electric Company, a regulated electric and gas utility serving Louisville, Ky., and 16 surrounding counties and Kentucky Utilities Company, a regulated electric utility, based in Lexington, Ky., which serves customers in 77 Kentucky counties and five counties in Virginia.

Louisville Gas & Electric Company and Subsidiary

Consolidated Income Statements

(In thousands of dollars)

(Unaudited)

			Three Months Ended December 31,						Twelve Months Ended December 31,
			2001			2000			2001		2000
Operating Revenues
	Electric		$	148,034		$	164,620		$	705,925	$	710,958
	Gas			74,669			129,813			290,775		272,489
		Total operating revenues	$	222,703		$	294,433		$	996,700	$	983,447
Operating Expenses
	Fuel for electric generation		$	34,660		$	38,988		$	159,231	$	159,418
	Power purchased			21,824			26,888			81,475		96,894
	Gas supply expenses			48,574			98,732			206,165		196,912
	Non-recurring charges			(144,385	)		(8,141	)		—		—
	Other operating & maintenance expenses			77,465			54,383			226,505		199,652
	Depreciation and amortization			23,173			25,122			100,356		98,291
	Federal and state income taxes			57,813			16,808			63,452		64,425
	Property and other taxes			4,790			4,821			17,743		18,985
		Total operating expenses	$	123,914		$	257,601		$	854,927	$	834,577
Net Operating Income			$	98,789		$	36,832		$	141,773	$	148,870
Other Income—Net				1,212			431			2,930		4,921
Income before Interest Charges			$	100,001		$	37,263		$	144,703	$	153,791
Interest Charges				7,842			10,237			37,922		43,218
Net Income			$	92,159		$	27,026		$	106,781	$	110,573
Dividends on Preferred Stock				1,111			1,367			4,739		5,210
Net Income Available for Common Stock			$	91,048		$	25,659		$	102,042	$	105,363

Kentucky Utilities Company and Subsidiary

Consolidated Income Statements

(In thousands of dollars)

(Unaudited)

			Three Months Ended December 31,						Twelve Months Ended December 31,
			2001			2000			2001		2000
Operating Revenues			$	211,950		$	212,854		$	859,472	$	851,941
Operating Expenses
	Fuel for electric generation		$	59,889		$	56,830		$	236,985	$	219,923
	Power purchased			41,115			44,730			157,161		166,918
	Non-recurring charges			(56,921	)		(11,030	)		6,867		—
	Other operating & maintenance expenses			48,820			45,006			175,380		169,715
	Depreciation and amortization			18,494			24,900			90,299		98,256
	Federal and state income taxes			35,875			15,109			57,482		51,963
	Property and other taxes			1,639			3,999			13,928		17,030
		Total operating expenses	$	148,911		$	179,544		$	738,102	$	723,805
Net Operating Income			$	63,039		$	33,310		$	121,370	$	128,136
Other Income—Net				3,234			1,542			8,932		6,843
Income before Interest Charges			$	66,273		$	34,852		$	130,302	$	134,979
Interest Charges				10,284			9,517			34,024		39,455
Net Income Before Cumulative Effect of Change in Accounting			$	55,989		$	25,335		$	96,278	$	95,524
Cumulative Effect of Change in Accounting for Derivatives, Net of Income Taxes				—			—			136		—
Net Income			$	55,989		$	25,335		$	96,414	$	95,524
Dividends on Preferred Stock				564			564			2,256		2,256
Net Income Available for Common Stock			$	55,425		$	24,771		$	94,158	$	93,268

QuickLinks

LG&E Energy Corp. Reports 2001 Utility Earnings
Full-Year 2001 Results
Fourth Quarter 2001 Results
Louisville Gas & Electric Company and Subsidiary Consolidated Income Statements (In thousands of dollars) (Unaudited)
Kentucky Utilities Company and Subsidiary Consolidated Income Statements (In thousands of dollars) (Unaudited)