Regulated electric and gas operations in generally supportive regulatory environments; Large and diverse service territory with generally attractive markets and above-average customer growth; Large and efficient regulated power generation fleet with well-managed nuclear and coal plants affording some fuel diversity, and providing for low-cost power and leading to above-average competitive position; and Significantly reduced scope of unregulated operations. Low business risk, stable-cash flow gas transmission and distribution operations will be separated from consolidated entity starting 2007; Uncertainty as to how the regulatory environment will evolve in Ohio subsequent to 2008, once Cincinnati Gas&Electric Co.'s rate-stabilization plan ends; Significant capital spending to address environmental needs necessitates timely recovery of expenses; International operations introduce political and currency risk; and Some
