Filed by FirstEnergy Corp. Pursuant to
Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of
the Securities Exchange Act of 1934
Commission File No.: 333-21011
Subject Company: FirstEnergy Corp.
<PAGE>
FirstEnergy(R) & GPU(SM)
The Premier
Regional Supplier of
Energy and Related Services
August 9, 2000
<PAGE>
SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This presentation contains forward-looking statements within the meaning of the
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking statements
with respect to revenues, earnings, performance, strategies, prospects and other
aspects of the businesses of FirstEnergy Corp. and GPU, Inc. are based on
current expectations that are subject to risks and uncertainties. A number of
factors could cause actual results or outcomes to differ materially from those
indicated by such forward-looking statements. These factors include, but are not
limited to, risks and uncertainties set forth in FirstEnergy's and GPU's filings
with the SEC, including risks and uncertainties relating to: failure to obtain
expected synergies from the merger, delays in obtaining or adverse conditions
contained in any required regulatory approvals, changes in laws or regulations,
economic or weather conditions affecting future sales and margins, changes in
markets for energy services, changing energy market prices, availability and
pricing of fuel and other energy commodities, legislative and regulatory changes
(including revised environmental and safety requirements), availability and cost
of capital and other similar factors. Readers are referred to FirstEnergy's and
GPU's most recent reports filed with the Securities and Exchange Commission.
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
Pete Burg
Chairman and CEO
FirstEnergy Corp.
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
COMMITMENT TO SHAREHOLDER VALUE
- Expected to be accretive to earnings and cash flow
- Enhanced revenue potential
- Substantial cost-reduction opportunities
- Accelerated earnings growth target of 7% - 8%
- Expect to maintain FE's current $1.50 dividend
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
STRATEGIC BENEFITS OF TRANSACTION
CREATES PREMIER SUPPLIER IN 13-STATE REGION
- Scope and scale
- 6th largest customer base nationally
- Broadened unregulated market opportunities
- Helps address GPU's provider of last resort obligation
- Increased efficiency of FE generation portfolio
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
CREATES REGION'S PREMIER SUPPLIER
- Accelerates retail strategy through doubling of customer base - 4.3 Million
U.S. Customers
[Map of Ohio and Pennsylvania]
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
CREATES REGION'S PREMIER SUPPLIER
- Significant geographic presence in three states
[pie chart]
OH 49%
PA 28%
NJ 23%
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
GREATER SCOPE AND SCALE
TARGET REGION
[Map displaying states of Wisconsin, Michigan, Illinois, Indiana, Kentucky,
Ohio, West Virginia, Virginia, New York, Pennsylvania, New Jersey, Maryland,
Delaware]
- 4.3 million U.S. customers
- $12.0 billion in annual sales
- 12,567 MW of installed generating capacity in U.S.
- 4th largest mechanical contracting and construction business
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
Greater Scope and Scale - Customers
CUSTOMER RANKING
[Graph]
RANK COMPANY MM
1 FPL/Entergy 6.3
2 Con Edison/Northeast Utilities 5.0
3 Unicom Corp./PECO Energy 4.9
4 AEP 4.9
5 PG&E 4.5
FIRSTENERGY/GPU 4.3
6 Edison International 4.2
7 Southern 3.8
8 New Century Energies/NSP 2.9
9 CP&L/Florida Progress 2.6
10 Texas Utilities 2.5
11 FIRSTENERGY 2.2
13 GPU 2.1
FIRSTENERGY WILL BE THE 6TH LARGEST ELECTRIC UTILITY BASED ON U.S. CUSTOMERS
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
Greater Scope and Scale - Market Value
MARKET RANKING
[Graph]
RANK COMPANY $MM
1 Duke Energy 24,932
2 Southern 17,189
3 FPL/Entergy 16,551
4 PECO/Unicom 14,946
5 Dominion Resources 11,799
6 AEP 11,220
7 PG&E 10,960
8 Reliant Energy 10,106
9 Con Edison/Northeast Utilities 8,719
10 TXU 8,828
FIRSTENERGY/GPU 8,465
11 NCE/NSP 8,175
12 CP&L/Florida Progress 7,562
13 PSE Group 7,708
14 Edison International 6,854
15 FirstEnergy 6,209
16-25
26 GPU 3,405
FIRSTENERGY WILL BE THE 11TH LARGEST ELECTRIC UTILITY BASED ON MARKET VALUE
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
GPU'S PROVIDER OF LAST RESORT RISK
- FE generation serves as attractive hedge against spot market price
volatility
- FE experienced in managing PA supply requirements
- Decreased reliance on spot purchases
- Continued pursuit of regulatory solution
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
OPTIMIZES FE'S GENERATION PORTFOLIO
- Increased customer load
- Increased utilization of base load units
- Increased efficiency through reduced unit cycling
- Reduced operation and maintenance expenses
- Margin capture opportunities
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
OPTIMIZES FE'S GENERATION PORTFOLIO
- Adding 1,155 MW peaking generation
- 390 MW Richland (2000)
- 425 MW West Lorain (Summer 2001)
- 340 MW Location TBD (Summer 2002)
- Opportunity for 800+ MW of capacity releases
- 380 MW available from OVEC
- 450 MW wholesale contract terminates 2005; three-year call on 150
MW
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
BROADENED MARKET OPPORTUNITIES
- Advances retail strategy and FE brand image
- Leverages relationships across larger customer base
- Wide array of energy-related products and services
-ELECTRICITY
-TELECOMMUNICATIONS
-FACILITIES MANAGEMENT
-UTILITY INFRASTRATURE CONSTRUCTION
-NATURAL GAS
-e-COMMERCE
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
BROADENED MARKET OPPORTUNITIES -
FACILITIES MANAGEMENT AND INFRASTRUCTURE CONSTRUCTION
SERVICES INCLUDE:
- HVAC Construction
- HVAC Service
- Electrical
- Refrigeration
- Utility Infrastructure Construction
- Piping
- Control Systems
- Plumbing
- Roofing
FOURTH LARGEST FACILITIES MANAGEMENT AND CONSTRUCTION COMPANY
$1 BILLION IN ANNUAL SALES
[Graphic]
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
BROADENED MARKET OPPORTUNITIES -
TELECOMMUNICATIONS
- GPU Telcom / Telergy Inc.
- FirstEnergy Telecom Corp.
- First Communications, LLC.
- America's Fiber Network
Services include:
- Fiber network services (carrier's carrier, competitive access, private
network)
- Wireless infrastructure
- Selected retail services (e.g., long-distance, calling cards)
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
BROADENED MARKET OPPORTUNITIES -
AMERICA'S FIBER NETWORK
FirstEnergy Pro Forma
---------------------
- Ownership in excess of 30%
- Will have contributed over 50,000 fiber miles to AFN by year-end
America's Fiber Network
-----------------------
- Super-regional, high speed, fiber optics company
- More than 7,000 route miles (140,000 fiber miles) connecting major and
secondary markets in the eastern U.S.
[Map displaying America's Fiber Network Route Map of AEPC, Allegheny, CFW,
FirstEnergy, GPU, R & B]
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
BROADENED MARKET OPPORTUNITIES -
INTERNET AND TECHNOLOGY APPLICATIONS
- Pantellos - 7.3% equity stake
- Ballard Power Systems
- Powerspan
- APX
- Utility.com
- Other
[Graphics]
Innovative supply chain solutions
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
A COMPELLING STORY
- Shareholder friendly transaction
- Expected to be immediately accretive
- Accelerated earnings growth potential
- Strong cash flow
- Premier supplier in 13-state target region
- Reduces GPU's supply risk and enhances FE's generation utilization
- Broadens unregulated market opportunities
- Accelerates retail strategy deployment and brand image
- Leverage relationship across double customer-base
- Proven management team
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
Fred Hafer
Chairman, President & CEO
GPU Corp.
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
WIN-WIN TRANSACTION
- Merger of FirstEnergy and GPU-- a positive step for all stakeholders:
- Investors
- Employees
- Customers
- Communities
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
MANAGEMENT AND GOVERNANCE
- Management
- Fred Hafer, Chairman
- Pete Burg, Vice-Chairman and CEO; assumes Chairmanship upon Mr.
Hafer's retirement
- Board of Directors
- 10 FE
- 6 GPU
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
MANAGEMENT AND GOVERNANCE
- Integration Activity
- Reports to Pete Burg
- Transition Management Task Force comprised of members from FE and
GPU
- Conduct integration studies and recommend organizational
structure and workforce combination
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
Rich Marsh
Vice President & CFO
FirstEnergy Corp.
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
KEY TRANSACTION TERMS
Consideration: $36.50
Collar: $24.24 - $29.63
50% cash / 50% FE common stock
Accounting Method: Purchase
Approximately $1.1 billion of goodwill based
on current book values; annual amortization
of approximately $28 million
Consideration: $4.5 billion
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
COST SAVING OPPORTUNITIES
- Consistent with savings achieved in other utility combinations
- 5% of non-generation O&M; $150 million annual estimate
- Cost savings will result from:
- Elimination of duplicative activities
- Improved operating efficiencies
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
DRIVERS OF EXPECTED EARNINGS GROWTH
Contributors to EPS Growth Rate
[Graph]
- Utilities . . . . . . . . . . . . . . . . . . 2.0%
- Domestic
- International
- Unregulated Retail. . . . . . . . . . . . . . 4.0 - 4.5%
- Electric
- Natural Gas
- Facility Services
- Unregulated Other . . . . . . . . . . . . . . 1.0 - 1.5%
- Utility Infrastructure Construction
- Telecommunications
- Unregulated International
- Total EPS Growth Rate 7.0 - 8.0%
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
STRATEGIC FOCUS
- Strategy remains focused on 13-state target region
- Support GPU's existing program for divestiture of certain
international assets
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
COMMITMENT TO CREDIT QUALITY
- Initial debt to total capital ratio = 66%; 58% by 2004
- Consistent strategy to improve credit quality
- Debt paydown of $1.8 billion by 2004
- FFO / Interest Coverage greater than 2.8
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
APPROVAL PROCESS
- FE and GPU shareholder approval
- OH, PA, NJ as needed
- FERC, SEC, NRC, FCC, HSR
TARGET COMPLETION: 12 MONTHS
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
FE IS WELL POSITIONED FOR TRANSACTION
- Improved Financial Profile
- Strong operating cash flow
- Reduced leverage: 63% (1997) to 59%
- Reduced payout ratio: 77% (1997) to 58%
- Accelerated depreciation / amortization since 1995: $1.2 billion
- Positive ratings outlook
- Opportunity for full stranded cost recovery
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
MERGER TRACK RECORD -
Ohio Edison/Centerior Merger 1997
PROMISES MADE PROMISES KEPT
- Synergy capture of - $700+ million achieved in under
$1 billion over 10 years 3 years; $350 million annual rate
- Maximize value of - Improved plant availability
generation portfolio
- Debt reduction - Approx. $1.5 billion redeemed
since 1997
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
MERGER TRACK RECORD -
Ohio Edison/Centerior Merger 1997
PROMISES MADE PROMISES KEPT
- PRESERVE VALUE THROUGH
REGULATORY PROCESS
- OE Rate Plan - Benefits preserved
- FE Rate Plan - Implemented
- Stranded Cost Recovery - Opportunity for full
stranded asset recovery
- Transition Plan - Approved
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
Pete Burg
Chairman and CEO
FirstEnergy Corp.
-------------- -------------------------------- -----------------
FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
-------------- -------------------------------- -----------------
<PAGE>
A COMPELLING STORY
- SHAREHOLDER FRIENDLY transaction
- Expected to be immediately accretive
- Accelerated earnings growth potential
- Strong cash flow
- PREMIER SUPPLIER in 13-state target region
- REDUCES GPU'S SUPPLY RISK and enhances
FE's generation utilization
- Broadens unregulated MARKET OPPORTUNITIES
- Accelerates retail strategy deployment and brand image
- Leverage relationship across double customer-base
- PROVEN MANAGEMENT team
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
FirstEnergy(R)
& GPU(SM)
The Premier
Regional Supplier of
Energy and Related Services
August 9, 2000
<PAGE>
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger, FirstEnergy Corp. and GPU, Inc. will
file a joint proxy statement/prospectus with the Securities and Exchange
Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY
STATEMENT / PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of
the joint proxy statement / prospectus (when available) and other documents
filed by FirstEnergy and GPU with the Commission at the Commission's Web site at
http://www.sec.gov. Free copies of the joint proxy statement / prospectus, once
available, and each company's other filings with the Commission may also be
obtained from the respective companies. Free copies of FirstEnergy's filings may
be obtained by directing a request to FirstEnergy Corp., Investor Services, 76
S. Main St., Akron, Ohio 44308-1890, Telephone: 1-800-736-3402. Free copies of
GPU filings may be obtained by directing a request to GPU, Inc., 300 Madison
Ave., Morristown, NJ 07962-1911, Telephone: 1-973-401-8204.
FirstEnergy, its directors, certain executive officers, and certain other
employees (Thomas M. Welsh, manager of Communications, and Kurt E. Turosky,
manager of Investor Relations) may be deemed under the rules of the Commission
to be "participants in the solicitation" of proxies from the security holders of
FirstEnergy in favor of the merger. FirstEnergy's directors, and executive
officers beneficially own, in the aggregate, less than 1% of the outstanding
shares of FirstEnergy common stock. Security holders of FirstEnergy may obtain
additional information regarding the interests of the "participants in the
solicitation" by reading the joint proxy statement/prospectus relating to the
merger when it becomes available.
GPU, its directors (Theodore H. Black, Fred D. Hafer (Chairman; CEO and
President), Thomas B. Hagen, Henry F. Henderson, Jr., John M. Pietruski,
Catherine A. Rein, Bryan S. Townsend, Carlisle A.H. Trost, Kenneth L. Wolfe and
Patricia K. Woolf), certain executive officers (Ira H. Jolles (Senior Vice
President and General Counsel), Bruce L. Levy (Senior Vice President and CFO)
and Carole B. Snyder (Executive Vice President Corporate Affairs)) and certain
other employees (Jeff Dennard (Director of Corporate Communications), Joanne
Barbieri (Manager of Investor Relations) and Ned Raynolds (Manager of Financial
Communications)) may be deemed under rules of the commission to be "participants
in the solicitation" of proxies from the security holders of GPU in favor of the
merger. GPU's directors, and executive officers beneficially own, in the
aggregate, less than 1% of the outstanding shares of GPU common stock. Security
holders of GPU may obtain additional information regarding the interests of
"participants in the solicitation" by reading the joint proxy
statement/prospectus relating to the merger when it becomes available.
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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<PAGE>
APPENDIX
DIRECT INQUIRIES TO:
Kurt E. Turosky
FirstEnergy Corp.
330-384-5500
www.firstenergycorp.com
Joanne M. Barbieri
GPU
(973) 401-8720
www.GPU.com
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FirstEnergy(R) The Premier Regional Supplier of FirstEnergy & GPU
Energy and Related Services
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