66960--2/29/2008--AQUILA_

related topics

{cost, operation, labor}

{financial, litigation, operation}

{cost, contract, operation}

{operation, natural, condition}

{debt, indebtedness, cash}

{capital, credit, financial}

{regulation, change, law}

{acquisition, growth, future}

{system, service, information}

We may continue to incur losses in our Merchant Services business. Our non-investment grade credit ratings have an adverse effect on our liquidity and borrowing costs. Our ability to refinance debt or raise new capital could be restricted by the terms of our finance agreements and our regulatory orders. Regulatory commissions may refuse to approve some or all of the utility rate increases we may request in the future. Our operating results can be adversely affected by milder weather. Our utility business is subject to complex government regulations and changes in these regulations or in their implementation may affect the costs of operating our businesses, which may negatively impact our results of operations. The outcome of legal proceedings cannot be predicted. An adverse finding could have a material adverse effect on our financial condition. Risks Relating to the Merger The Merger may not be completed, which could adversely affect our business operations. We are subject to business uncertainties and contractual restrictions while the Merger is pending that could adversely affect our business. We will incur significant costs in connection with the Merger.

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66960--2/29/2008--AQUILA__INC