GPU Announces Actions to Improve Shareholder Value.

ORLANDO, Fla.--(BUSINESS WIRE)--Oct. 18, 1999--

Commits to more than $100 million in annual operating cost

reductions and $40 -$50 million of investment targeted for

service improvements by 2001

GPU, Inc. today announced a multi-point program it has initiated to enhance shareholder returns, including cost reductions of $100 million during the next two years through increased operating efficiency and investments of $40-$50 million to improve the reliability of its domestic utility electric network.

GPU officers will tell securities analysts today at the Edison Electric Institute Finance Conference here that the objective of the program is to deliver annual earnings at or above expected levels in 2000 and earnings growth of 5 percent per year in the years following 2000. The program also will provide for improved customer service levels.

"GPU is committed to being a first-quartile utility in terms of the returns we will deliver to our owners, and the service we will supply to our customers," said Fred D. Hafer, chairman, president and chief executive officer of GPU. "We are revitalizing this company, and these are the kinds of steps you can expect from us."

Hafer noted that the planned cost reductions consist of cuts of $55 million in 2000 and an additional $45 million in 2001. GPU Energy, the company's electric domestic transmission and distribution subsidiary, is targeting reductions of $30 million in 2000 and an additional $40 million in 2001. The unit will achieve these reductions by using new tools from its SAP enterprise resource planning system to eliminate significant amounts of operational overhead expense and by improving the productivity of all its operations.

Midlands Electricity, GPU's U.K. distribution subsidiary, will make reductions of $25 million in 2000 and an additional $5 million in 2001. Much of these reductions are to off set the financial impact of the 2000 price review. Midlands will eliminate activities not provided for in its new regulated rate level expected to take effect next spring and realize productivity benefits from its new systems and organization.

Concerning GPU's planned investments of $40-$50 million its domestic electric network through 2001, Hafer said, "We are committed to providing quality services for the customers of our infrastructure and utility services businesses. We will focus on improved reliability in peak load conditions and increased telemetry on remote equipment."

In addition to cost reductions and operational improvements, the program includes a rebalancing of the company's capital structure. "We plan to free up at least $500 million in cash from our current investment portfolio by reducing our ownership in non-core and under performing assets. These funds will be used to reduce debt, repurchase common stock and support growth initiatives," Hafer continued.

GPU said it would realize growth from improvements in its current businesses and expansion of its new non-regulated businesses. "Each of our operations areas in the U.S., U.K., Australia and Argentina has several small start-up businesses providing non-regulated services to the communities and industries we serve. These range from metering and energy services in the U.K. to telecom and construction services in Australia and the U.S. to municipal services in Argentina. We expect these businesses to grow and collectively contribute to earnings growth over the new few years."

As for acquisitions, GPU management indicated that the acquisitions completed to date have served to establish operational bases for growth on four continents. Future acquisitions, if made, would likely be small in size and would serve to expand capabilities to grow the non-regulated businesses or provide critical mass to the current portfolio of holdings.

In adopting its goal of 5 percent earnings per share growth, GPU said it would manage the business to provide continued opportunities to increase the common stock dividend.

GPU, Inc. (NYSE:GPU), headquartered in Morristown, NJ, is a registered utility holding company providing utility and utility related services to customers throughout the world. GPU's electric and gas utility companies--GPU Energy, Midlands Electricity, GPUPowerNet, GPU GasNet and Emdersa--serve nearly 6 million customers in the United States, the UK, Australia and Argentina. The company's IPP units own and operate 22 projects in 7 countries and the United States. GPU's 1998 revenues were $ 4.3 billion and its total assets were $16.3 billion. GPU's other subsidiaries include GPU Advanced Resources, Inc., GPU Generation Inc., GPU Nuclear, Inc., GPU Service, Inc. and GPU Telcom Services, Inc. (http://www.gpu.com)

This news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements made that are not historical facts are forward-looking and, accordingly, involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Although such forward-looking statements have been based on reasonable assumptions, there is no assurance that the expected results will be achieved. Some of the factors that could cause actual results to differ materially include, but are not limited to: the effects of regulatory decisions; changes in law and other governmental actions and initiatives; the impact of deregulation and increased competition in the industry; industry restructuring; expected outcomes of legal proceedings; the completion of generation asset divestiture; fuel prices and availability; the effects of the Year 2000 issue; and uncertainties involved with foreign currency fluctuations.