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IMPORTANT LEGAL INFORMATION UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This newsletter 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 SEC.
<PAGE>
MERGER QUESTIONS AND ANSWERS
Here are some questions and answers about the pending merger
between GPU, Inc. and FirstEnergy Corp. as they relate to miscellaneous and
general questions.
o HOW MANY INVESTOR-OWNED UTILITIES ARE IN THE UNITED STATES? IT HAS
BEEN STATED THAT FIRSTENERGY IS 10TH LARGEST, BUT OUT OF HOW MANY?
WHAT IS GPU'S CURRENT RANKING?
The are many electric utilities throughout the United States. The
financial community tracks the performance of approximately 80
utilities. Rankings can be confusing since there are many measures
that can be used. Two common measures are revenue (annual receipts
from sale of electricity and gas) and market capitalization (the value
of the companies' common stock). Other measures are customer numbers
and megawatt-hour sales. Based on revenue and market capitalization,
FirstEnergy ranks approximately 15th. GPU ranks 23rd. FirstEnergy is
ranked 11th largest when measured in terms of customers. GPU ranks
13th in number of customers.
The combined FirstEnergy organization would be the 6th largest
electric utility in terms of customers and 11th largest in market
value.
o DID GPU TRY TO BUY FIRSTENERGY? DID THEY APPROACH US?
GPU management initiated discussions with FirstEnergy management
regarding a possible merger of the companies.
o IS THERE ANY WAY FOR NATIONAL GRID (UNITED KINGDOM) TO HOLD UP THIS DEAL?
National Gird has had ample time to consider their interest in a
transaction involving GPU. We do not expect them to take any action
that would affect this deal.
o BECAUSE OF DEREGULATION, COULD FIRSTENERGY TERMINATE THE AGREEMENT?
There are only a few conditions under which FirstEnergy or GPU
could terminate the deal. Usually these conditions would occur if
something unexpected occurred that resulted in a material negative
effect on one of the companies. If the unexpected event resulted from
a general regulatory change, termination would be permitted only if
the event would result in a material negative effect on both of the
companies combined. Deregulation, in and of itself, is not expected to
trigger any of the termination rights.
o WE ARE IN SOUTHWESTERN PENNSYLVANIA. WE HAVE HEARD THAT THE LOCAL
RURAL ELECTRIC COMPANIES WERE SENT LETTERS ASKING IF THEY WOULD BE
INTERESTED IN PURCHASING OUR LINES. WERE THE REAS CONTACTED ABOUT
PURCHASING OUR LINES? DOES GPU WANT TO SELL SOME OF OUR LINES TO THEM?
There has been no organized attempt to sell GPU distribution
assets to any REA or other company. Occasionally the company has
considered sale of small portions of lines or service territory to an
REA when that REA may be in a better position to serve those
customers. We will continue to consider such opportunities when they
are identified. Other than these unique situations, there are no plans
to offer for sale any of the GPU distribution or transmission lines.
o DID WE SELL SOME OF OUR FOREIGN INVESTMENTS SO THAT THIS DEAL COULD BE
MADE?
The sale of PowerNet was implemented before any discussions with
FirstEnergy were anticipated. No asset sale was, or is being
considered as a result of the merger.
o HOW DOES THE MERGER WITH FIRSTENERGY AFFECT THE POTENTIAL SALE OF GPU'S
50 PERCENT SHARE OF THE YARDS CREEK STATION TO PSEG?
Under the terms of the merger agreement, FirstEnergy will have to
approve any sale of GPU generation assets. Ongoing negotiations
regarding the sale of Yards Creek will continue subject to final
approval by FirstEnergy. Assets like Forked River and York Haven,
where no active negotiations are underway, will not be offered for
sale during the transition period.
