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.: 333-46444
Subject Company: FirstEnergy Corp.
FirstEnergy Corp. FOR RELEASE: October 17, 2000
76 South Main Street
Akron, Ohio 44308
www.firstenergycorp.com
News Media Contact:
David C. Poeppelmeier
(330) 384-5813
FIRSTENERGY REPORTS HIGHER THIRD QUARTER EARNINGS
FirstEnergy Corp. (NYSE: FE) today reported that net income
in the third quarter of 2000 was $198.2 million, or 89 cents per
share of common stock, compared with net income of $185.8
million, or 82 cents per share, in the third quarter of 1999.
For the nine months ended September 30, 2000, net income was
$473.7 million, or $2.12 per share, compared with $447.9 million,
or $1.97 per share, for the nine months ended September 30, 1999.
Improved earnings results reflect the addition of nearly
30,000 new electricity customers in FirstEnergy's regulated
service area during the nine-month period, and a near tripling of
power sales to customers in unregulated energy markets, including
Pennsylvania, New Jersey and Delaware. Total generation
kilowatt-hour sales were up 1.2 percent for the quarter, despite
a 2.2 percent decline in power deliveries to customers in its
regulated service area. Although power deliveries to industrial
customers were up 1.4 percent, commercial sales were flat and
deliveries to residential customers were down 9.4 percent. The
drop in sales was primarily due to milder weather during the
quarter, resulting in lower air-conditioning load.
The company's financial performance also was enhanced by the
sale of sulfur dioxide emission allowances in the third quarter,
which were partially offset by increased operating costs
resulting from the nuclear refueling outage of Unit 2 at the
Beaver Valley Power Station and the cost of installing additional
peaking generation this year.
Total revenues for the third quarter were $1.9 billion,
compared with $1.7 billion for the year-earlier quarter. For the
nine-month period this year, revenues were $5.2 billion, compared
with $4.7 billion for the same period in 1999.
<PAGE>
2
-more-
FirstEnergy continued its aggressive efforts to retire and
refinance long-term debt. Debt reductions during the first nine
months of 2000 totaled $382.7 million, which will produce annual
interest savings of $27.1 million. Also during the period,
refinancing and repricing of debt totaled $448.5 million and will
reduce interest expense by $4.0 million annually.
Since January 1999, the company also repurchased
approximately 11.1 million shares of common stock under its
program to buy back up to 15 million shares during a three-year
period ending next year. Outstanding shares of common stock
totaled 221.4 million on September 30, 2000, compared to 226.0
million shares on September 30, 1999.
On July 19, FirstEnergy received approval of its amended
Transition Plan from the Public Utilities Commission of Ohio.
The plan was filed as required under an Ohio electric utility
industry restructuring law passed last year. Under the plan's
provisions, the company will have the opportunity to recover $6.9
billion in transition costs, which were incurred for the
construction of facilities and purchase of equipment under a
regulated environment. Approval of the plan was a key reason
that led Moody's Investors Service to upgrade, on September 27,
the debt ratings of FirstEnergy's four electric utility operating
companies.
In a strategic move that is key to FirstEnergy's vision of
being the premier energy and related services provider in the
northeast quadrant of the United States, the company announced on
August 8 that it had entered into a $4.5 billion merger agreement
with Morristown, New Jersey-based GPU, Inc. The merger, which
the company hopes to complete by mid-2001, is expected to be
immediately accretive to cash flow and earnings per share and
produce other benefits including cost savings of at least $150
million annually from the combination of operations and increased
revenue opportunities through its natural gas, telecommunications
and mechanical contracting and construction businesses. With
regulatory approvals, the merger would make FirstEnergy the sixth
largest investor-owned electric system in the nation, based on
serving 4.3 million customers within 37,000 square miles of Ohio,
Pennsylvania and New Jersey.
<PAGE>
3
-more-
In September, FirstEnergy's four electric utility operating
companies completed the transfer of $1.2 billion of transmission
assets to FirstEnergy's new subsidiary, American Transmission
Systems, Inc. The subsidiary owns and operates FirstEnergy's
major high-voltage transmission facilities - approximately 7,100
circuit miles of transmission lines with voltages of 69 kilovolts
and higher, 37 interconnections with 6 neighboring utilities and
approximately 120 transmission substations. This transaction
helps FirstEnergy move forward with its plan to join a for-
profit, independent regional transmission organization.
FirstEnergy is a diversified energy services holding company
with $18 billion in assets and more than $6 billion in annual
revenues. FirstEnergy's electric utility operating companies -
Ohio Edison, The Illuminating Company, Toledo Edison and
Pennsylvania Power - comprise the nation's tenth largest electric
system, serving 2.2 million customers in Ohio and Pennsylvania.
FirstEnergy also is involved in the exploration and
production of oil and natural gas, and the transmission and
marketing of natural gas, including service to more than 40,000
business and residential customers. Its resources include
interests in more than 7,700 oil and gas wells, with proved
reserves of 450 billion cubic equivalent of natural gas and 5,000
miles of pipelines.
FirstEnergy offers a wide array of energy-related products
and services - including heating, ventilating, air conditioning,
refrigeration and energy management services - through its
FirstEnergy Facilities Services Group, Inc., subsidiary, which
includes 11 leading electrical and mechanical enterprises
headquartered in Ohio, Pennsylvania, Indiana, Maryland, New York,
New Jersey and Virginia.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This news release 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 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.
<PAGE>
4
-more-
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger FirstEnergy Corp. and GPU,
Inc. have filed a preliminary joint proxy statement/prospectus
with the SEC. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ
THIS JOINT PROXY STATEMENT/PROSPECTUS AND, WHEN IT BECOMES
AVAILABLE, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS. THE
JOINT PROXY STATEMENT/PROSPECTUS CONTAINS IMPORTANT INFORMATION.
Investors and security holders may obtain a free copy of the
definitive joint proxy statement/prospectus (when available) and
other documents filed by FirstEnergy and GPU with the SEC at the
SEC's Web site at http://www.sec.gov. Free copies of the
definitive joint proxy statement/prospectus, once available, and
each company's other filings with the SEC 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., 310 Madison Avenue,
Morristown, New Jersey 07962. 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 SEC 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.PU, its directors
(Theodore H. Black, Fred D. Hafer (Chairman: CEO and President),
Thomas B. Hagen, Robert Pokelwaldt, John M. Pietruski, Catherine
A. Rein, Bryan S. Townsend, Carlisle A.H. Trost, Kenneth L. Wolfe
and Patrick 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 SEC 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.
-101700-
