<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
-----------------------
Date of Report (Date of earliest event reported):
January 21, 1994
USX Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-5153 25-0996816
--------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
</TABLE>
<TABLE>
<S> <C>
600 Grant Street, Pittsburgh, PA 15219-4776
- ------------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
</TABLE>
(412) 433-1121
-----------------------
(Registrant's telephone number,
including area code)
<PAGE> 2
Item 5. Other Events
On January 21, 1994, the Registrant reported unaudited results
for the fourth quarter and year ended December 31, 1993 for each of the
Marathon Group, the U. S. Steel Group and the Delhi Group of USX
Corporation and consolidated results for USX Corporation and
subsidiary companies. The press releases announcing these results and
including condensed financial and operating data are filed herewith as
exhibits.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Exhibits.
99.1 Press Release dated January 21, 1994 with respect to
the Marathon Group of USX Corporation and summary
financial and operating data.
99.2 Press Release dated January 21, 1994 with respect to
the U. S. Steel Group of USX Corporation and summary
financial and operating data.
99.3 Press Release dated January 21, 1994 with respect to
the Delhi Group of USX Corporation and summary
financial and operating data.
Condensed consolidated financial data with respect to
USX and subsidiary companies is included with each
press release.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
USX CORPORATION
By s/Lewis B. Jones
--------------------
Vice President
& Comptroller
Dated: January 24, 1994
<PAGE> 1
EXHIBIT 99.1
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX ANNOUNCES FOURTH QUARTER AND FULL YEAR
MARATHON GROUP FINANCIAL RESULTS
PITTSBURGH, January 21, 1994 -- USX Corporation reported
a significant improvement in its Marathon Group's (NYSE:MRO)
fourth quarter 1993 downstream operating results, compared to
the same period in 1992. However, an inventory market
valuation charge and certain environmental remediation charges
resulted in a fourth quarter 1993 Marathon Group net loss of
$88 million, or $.31 per share. These charges, combined with
the positive effects of certain asset sales, reduced net income
by an estimated $117 million. Comparable results in the fourth
quarter of 1992 reflected a net loss of $120 million, or $.42
per share, which included an estimated net charge of
$62 million for the aftertax effect of an inventory market
valuation charge, certain litigation accruals, and a benefit
from a natural gas contract settlement.
Sales were $2.9 billion in the fourth quarter of 1993,
compared with $3.2 billion in the fourth quarter of 1992.
Sales for the year 1993 totaled $12.0 billion, compared with
$12.8 billion in 1992.
For the fourth quarter of 1993 the Marathon Group
reported an operating loss of $115 million, compared with a
restated operating loss of $104 million in the fourth quarter
of 1992. The operating losses in the 1993 and 1992 fourth
quarters reflected increases in the inventory market valuation
reserve of $187 million and $98 million, respectively. Total
year 1993 operating income was $169 million, compared with
restated operating income of $304 million in 1992. Operating
income in 1993 included a $241 million charge for an increase
in the inventory market valuation reserve, while 1992 total
year operating income included a $62 million credit for a
decrease in the reserve and a production tax refund of $119
million, partially offset by a restructuring charge of
$115 million related to the disposition of certain domestic
exploration and production properties.
<PAGE> 2
USX Corporation Board Chairman Charles A. Corry
commented, "Downstream results for both the fourth quarter and
total year showed strong improvement from comparable periods
last year, despite little improvement in the economy.
Upstream results reflected the depressed prices which
prevailed in world crude markets."
Operating income from refining, marketing and
transportation, or downstream operations totaled $111 million
in the fourth quarter of 1993 and $407 million for the year
1993, compared with $3 million and $128 million for the fourth
quarter and total year 1992, respectively. Downstream
operating income in 1993 included a fourth quarter charge for
environmental remediation of $17 million.
Corry noted, "The improvement in our fourth quarter
downstream results stemmed from higher refined product margins
reflecting lower crude costs, stronger retail margins and
decreased refinery maintenance costs for turnaround activity
which were partially offset by lower refined product prices."
<PAGE> 3
Worldwide exploration and production, or upstream
operations, reported an operating loss of $19 million in the
fourth quarter of 1993 and operating income for the year of
$80 million, compared with operating income of $28 million and
$172 million for the fourth quarter and total year 1992,
respectively. Domestic upstream reported operating income of
$3 million for the fourth quarter of 1993, compared with $27
million in the fourth quarter of 1992. Domestic upstream
operating income for the year 1993 was $117 million, versus
$123 million in the prior year. Excluding the effects of a $5
million fourth quarter 1993 charge for environmental
remediation accruals, and a $20 million gain recognized as a
result of a natural gas contract settlement in the fourth
quarter of 1992, domestic upstream operating income improved
in the fourth quarter and total year 1993 primarily reflecting
lower production and depletion expenses and higher natural gas
prices, partially offset by lower crude oil prices and
volumes.
During the fourth quarter of 1993, Marathon began to
benefit from an aggressive domestic natural gas development
program in which net wells drilled in 1993 were nearly double
that of 1992 activity. This level of development will
continue in 1994.
International upstream reported operating losses of
$22 million in the fourth quarter of 1993 and $37 million for
the total year 1993, compared with operating income of $1
million and $49 million, respectively, in 1992. The declines
for the fourth quarter and year 1993 resulted mainly from
lower average international crude oil prices, reduced average
natural gas prices and decreased liquid hydrocarbon liftings
from the United Kingdom sector of the North Sea. The total
year results for 1993 included a $17 million charge recorded
in the third quarter related to the relinquishment of
Marathon's interest in the Arzanah Oil Field, Abu Dhabi.
The East Brae field in the U.K. North Sea was brought on
stream by Marathon in late December. East Brae liquids
production is expected to peak at 115,000 barrels daily in
November 1994. Marathon's interest in East Brae is approximately 36%.
<PAGE> 4
Other income in the fourth quarter of 1993 included
pretax gains of $25 million for the disposal of assets,
including the sale of two tug/barge units and the assets of
the Bosart Co. subsidiary.
Marathon Group cash flow from operations before the
effects of working capital changes was $910 million for the
year 1993.
For the year 1993, the Marathon Group recorded a loss
before the cumulative effect of changes in accounting
principles of $6 million, or $.04 per share, compared with
income before the cumulative effect of changes in accounting
principles of $109 million, or $.37 per share, in 1992.
The Marathon Group recorded a total year 1993 net loss of
$29 million, or $.12 per share, which included the $17 million
unfavorable cumulative noncash effect of adopting Statement of
Financial Accounting Standards (SFAS) No. 112 -- Employers'
Accounting for Postemployment Benefits and the $6 million
unfavorable cumulative effect of adopting Emerging Issues Task
Force Consensus No. 93-14 -- Accounting for Multiple-Year
Retrospectively Rated Insurance Contracts. The cumulative
effect of adopting these standards was reported as a change in
accounting principles and reflected as a restatement of the
Marathon Group's previously reported first quarter 1993 net
income.
<PAGE> 5
The net loss in 1993 included the effects of the
previously mentioned accounting changes, an inventory market
valuation charge, certain environmental remediation charges, a
charge related to the relinquishment of an interest in Abu
Dhabi and the remeasurement of deferred tax liabilities
associated with the increase in the federal income tax rate.
These charges, combined with the positive effects of certain
asset sales, and tax adjustments related to USX's ability to
elect to credit, rather than deduct, certain foreign income
taxes for U. S. income tax purposes, had an estimated
unfavorable aftertax effect of $154 million. For the year
1992 the Marathon Group had a net loss of $222 million, or
$.80 per share which included the combined unfavorable
cumulative noncash effect of adopting SFAS No. 106 and
SFAS No. 109, certain restructuring and litigation charges, a
charge for the impairment of an investment and the benefits of
an inventory market valuation credit, a refund of prior years'
production taxes and a natural gas contract settlement. The
estimated unfavorable aftertax effect of these items on 1992
net income was $190 million.
* * * * * * * *
Supplemental information and statistics and condensed
financial statements for the Marathon Group and condensed
consolidated financial statements for USX Corporation are
attached.
<PAGE> 6
<TABLE>
MARATHON GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992* 1993 1992*
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,922 $ 3,238 $11,962 $12,782
Total operating costs . . . . . . . . . . . . . . . . . . . . (3,037) (3,342) (11,793) (12,478)
------ ------ ------- -------
Operating income (loss) . . . . . . . . . . . . . . . . . . . (115) (104) 169 304
Other income (loss) . . . . . . . . . . . . . . . . . . . . . 25 (4) 46 (7)
Net interest and other financial costs. . . . . . . . . . . . (71) (73) (270) (96)
------ ------ -------- -------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES . . . . . . . . . . . . . . . . . . . (161) (181) (55) 201
Less provision (credit) for estimated
income taxes
- United States . . . . . . . . . . . . . . . . . . . . . . (138) (71) (133) 59
- Foreign . . . . . . . . . . . . . . . . . . . . . . . . 65 10 84 33
------ ------ ------- -------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING
PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . . (88) (120) (6) 109
Cumulative effect of changes in
accounting principles . . . . . . . . . . . . . . . . . . . - - (23) (331)
------ ------ ------- -------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . (88) (120) (29) (222)
Dividends on preferred stock . . . . . . . . . . . . . . . . (2) (1) (6) (6)
------ ------ ------- -------
NET INCOME (LOSS) APPLICABLE TO MARATHON
STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (90) $ (121) $ (35) $ (228)
====== ======= ======= =======
Per common share data:
Weighted average shares, in thousands:
- Primary. . . . . . . . . . . . . . . . . . . . . . . . . . 286,582 286,276 286,594 283,494
- Fully diluted. . . . . . . . . . . . . . . . . . . . . . . 286,582 286,276 286,594 283,495
Primary and fully diluted:
Total income (loss) before cumulative effect
of changes in accounting principles . . . . . . . . . . . $ (.31) $ (.42) $ (.04) $ .37
Cumulative effect of changes in
accounting principles . . . . . . . . . . . . . . . . . . . - - (.08) (1.17)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . (.31) (.42) (.12) (.80)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . .17 .17 .68 1.22
<FN>
* Certain reclassifications of data have been made to conform to 1993
classifications.
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 7
<TABLE>
MARATHON GROUP OF USX CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
<CAPTION>
December 31 December 31
(In Millions) 1993 1992 1993 1992
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . . . $ 185 $ 35 Current liabilities . . . . $ 1,668 $ 2,278
Receivables - net . . . . . 337 525 Long-term debt . . . . . . . 4,239 3,743
Inventories . . . . . . . . 987 1,278 Other liabilities . . . . . 1,788 1,785
Other current asset . . . . 89 96
------- ------- ------- -------
Total current assets . . . 1,598 1,934 Total liabilities. . . . . . 7,695 7,806
Property, plant and Preferred stock . . . . . . . 78 78
equipment - net . . . . . 8,428 8,433 Common stockholders'
Other assets . . . . . . . 779 774 equity . . . . . . . . . . . 3,032 3,257
------- ------- ------- -------
Total . . . . . . . . . $10,805 $11,141 Total . . . . . . . . . . $10,805 $11,141
======= ======= ======= =======
<FN>
Revised January 25, 1994 to reflect minor reclassifications.
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 8
MARATHON GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENT
The condensed financial statements of the Marathon Group include the results of
operations and financial position for the businesses of Marathon Oil Company
and certain other subsidiaries of USX, and a portion of the corporate assets,
liabilities and related transactions that are not separately identified with
ongoing operating units of USX. These condensed financial statements should be
read in connection with the condensed consolidated financial statements of USX.
USX adopted two new accounting standards in the fourth quarter of 1993 which
resulted in restatement of the first nine months of 1993. Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," requires employers to recognize the obligation to
provide postemployment benefits on an accrual basis if certain conditions are
met. The cumulative effect of adopting this standard is reported as a change
in accounting principle effective January 1, 1993, and decreased 1993 net
income of the Marathon Group by $17 million, net of $10 million income tax
effect.
The second accounting standard, Emerging Issues Task Force (EITF) Consensus
No. 93-14, "Accounting for Multiple-Year Retrospectively Rated Insurance
Contracts," requires accrual of retrospective premium adjustments when the
insured has an obligation to pay cash to the insurer that would not have been
required absent experience under the contract. The cumulative effect of this
change in accounting principle determined as of January 1, 1993, decreased net
income by $6 million, net of $3 million income tax effect.
In 1992, USX adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" (SFAS
No. 106), and Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (SFAS No. 109). The cumulative effect of these changes in
accounting principles decreased first quarter 1992 net income of the Marathon
Group by $147 million, net of $86 million income tax effect, for SFAS No. 106
and $184 million for SFAS No. 109.
Changes in the inventory market valuation reserve resulted in a $241 million
charge against operating income in 1993 ($187 million charge in the fourth
quarter) and a $62 million credit to operating income in 1992 ($98 million
charge in the fourth quarter).
Operating income in 1992 included second quarter restructuring charges of $115
million involving the disposition of certain domestic exploration and
production properties.
<PAGE> 9
Pretax income in 1992 included the settlement of a production tax refund claim
for the years 1982 through 1985. The refund resulted in credits to operating
income of $119 million and interest income of $177 million in the second
quarter of 1992.
Other income in 1993 included a pretax gain of $34 million from disposal of
assets, primarily related to the fourth quarter sale of two product tug/barge
units and the sale of assets of a wholesale distributor subsidiary, Bosart Co.
Other income in 1992 included a $19 million first quarter charge for impairment
of a 25% interest in a natural gas transmission partnership.
<PAGE> 10
MARATHON GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
(Continued)
The provision for estimated U.S. and foreign income taxes for interim periods
is based on tax rates and amounts which recognize management's best estimate of
current and deferred tax assets and liabilities in accordance with USX's tax
allocation policy. The 1993 U.S. income tax provision included a credit of $64
million related to recognition of future U.S. income tax benefits for deferred
foreign income taxes. This favorable adjustment results from USX's ability to
elect to credit, rather than deduct, foreign income taxes for U.S. federal
income tax purposes in future periods. The 1993 U.S. income tax provision also
included a $40 million charge associated with an increase in the federal income
tax rate from 34% to 35%, reflecting remeasurement of deferred income tax
liabilities as of January 1, 1993.
January 21, 1994
<PAGE> 11
<TABLE>
MARATHON GROUP OF USX CORPORATION
SUPPLEMENTAL INFORMATION
($'s in Millions)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
---------------- -----------------
1993 1992 1993 1992
------ ------ ------ ------
<S> <C> <C> <C> <C>
SALES (A) $2,922 $3,238 $11,962 $12,782
- ---------------------------
OPERATING INCOME (LOSS) (B)
- ---------------------------
Exploration & Production $ (19) $ 28 $ 80 $ 172
Refin., Market. & Trans. 111 3 407 128
Gas Gathering & Processing (A) - - - 21
Administrative (C) (20) (37) (77) (83)
Special Items (187) (98) (241) 66
------ ------ ------ -------
Total Marathon Group $ (115) $ (104) $ 169 $ 304
====== ====== ====== =======
ITEMS INCLUDED IN OPERATING
INCOME
Exploration & Production
------------------------
Environ. Remed. Accrual (5) - (5) -
Nat. Gas Contract Buyout - 20 - 20
Abu Dhabi Relinquishment - - (17) -
Refin., Market. & Trans.
------------------------
Environ. Remed. Accrual (17) - (17) -
Special Items
-------------
Inventory Market Valuation Adj. (187) (98) (241) 62
Production Tax Refund - - - 119
Restructuring Charge - - - (115)
------ ------ ------- -------
Total (209) (78) (280) 86
====== ====== ======= =======
CAPITAL EXPENDITURES (A) $ 264 $ 415 $ 910 $ 1,193
EXPLORATION EXPENSE $ 37 $ 62 $ 145 $ 172
- --------------------------- ====== ======= ======= =======
<FN>
(A) Information presented for periods prior to October 2, 1992 included
the businesses of the Delhi Group. Beginning October 2, 1992, such
data excludes the results of the Delhi Group.
(B) Operating income (loss) for 1992 includes certain reclassifications
to conform to 1993 classifications.
(C) Includes the portion of Marathon's administrative costs not allocated
to the individual business components and the portion of USX corporate
general and administrative costs allocated to the Marathon Group.
</TABLE>
<PAGE> 12
<TABLE>
MARATHON GROUP OF USX CORPORATION
SUPPLEMENTAL INFORMATION (Continued)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
---------------- -----------------
1993 1992 1993 1992
------ ------ ------ ------
<S> <C> <C> <C> <C>
OPERATING STATISTICS
Net Liquids Production (A):
Domestic 110.9 113.7 111.1 118.0
International 42.7 54.6 44.9 56.5
------ ------ ------ ------
Worldwide 153.6 168.3 156.0 174.5
Net Natural Gas Production (B):
Domestic 523.5 521.2 529.2 593.3
International 385.1 349.0 373.0 338.1
------ ------ ------ ------
Worldwide 908.6 870.2 902.2 931.4
Average Sales Prices:
Liquid Hydrocarbons (per Bbl)
Domestic $12.45 $16.49 $14.54 $16.47
International 14.11 18.66 16.22 $18.95
Natural Gas (per Mcf)
Domestic $ 2.02 $ 1.94 $ 1.94 $ 1.60
International 1.45 1.70 1.52 1.77
Crude Oil Refined (A) 507.4 529.1 549.0 546.2
Refined Products Sold (A) 745.3 742.3 725.8 707.0
<FN>
(A) Thousands of barrels per day
(B) Millions of cubic feet per day
</TABLE>
<PAGE> 13
<TABLE>
USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992* 1993 1992*
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,604 $ 4,575 $ 18,064 $ 17,813
Total operating costs . . . . . . . . . . . . . . . . . . . . (4,576) (4,960) (18,008) (17,743)
------- ------- -------- --------
Operating income (loss) . . . . . . . . . . . . . . . . . . . 28 (385) 56 70
Other income (loss) . . . . . . . . . . . . . . . . . . . . . 102 (2) 257 (2)
Net interest and other financial costs . . . . . . . . . . . (40) (116) (552) (257)
------- ------- -------- --------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES . . . . . . . . . . . . . . . . . . . 90 (503) (239) (189)
Less provision (credit) for estimated
income taxes
- United States . . . . . . . . . . . . . . . . . . . . . . (12) (171) (156) (64)
- Foreign . . . . . . . . . . . . . . . . . . . . . . . . . 65 11 84 35
------- ------- -------- --------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING
PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . . . 37 (343) (167) (160)
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (92) (1,666)
------- ------- ------- -------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . . 37 (343) (259) (1,826)
Dividends on preferred stock . . . . . . . . . . . . . . . . (7) (2) (27) (9)
------- ------- ------- -------
NET INCOME (LOSS) APPLICABLE TO COMMON
STOCKS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30 $ (345) $ (286) $(1,835)
====== ======= ======= ========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
<CAPTION>
December December
(In Millions) 1993 1992 1993 1992
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . . . $ 268 $ 57 Current liabilities . . . . . $ 3,334 $ 3,470
Receivables - net . . . . . 932 924 Long-term debt . . . . . . . . 5,888 5,968
Inventories . . . . . . . . 1,626 1,930 Other liabilities . . . . . . 4,234 4,105
Other current assets . . . 354 189
------- ------- ------- -------
Total current assets . . 3,180 3,100 Total liabilities . . . . . 13,456 13,543
Property, plant and Preferred stock . . . . . . 112 105
equipment - net . . . . . 11,603 11,759 Common stockholders'
Other assets . . . . . . . 2,537 2,393 equity . . . . . . . . . . 3,752 3,604
------- ------- ------- -------
Total . . . . . . . . . . $17,320 $17,252 Total . . . . . . . . . . $17,320 $17,252
======= ======= ======= =======
<FN>
* Certain reclassifications of data have been made to conform to 1993
classifications.
The following common share data and notes are an integral part of these
financial statements.
</TABLE>
<PAGE> 14
<TABLE>
USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992 1993 1992
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common share data - Marathon Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Marathon Stock . . . . . . . . . . . . . . . . $ (90) $(121) $ (12) $ 103
--Per share - primary and fully diluted . . . . . . . . . . (.31) (.42) (.04) .37
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . . . . . . . . . . - - (23) (331)
--Per share - primary and fully diluted . . . . . . . . . . - - (.08) (1.17)
Net income (loss) applicable to Marathon
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90) (121) (35) (228)
--Per share - primary and fully diluted . . . . . . . . . . . (.31) (.42) (.12) (.80)
Dividends paid per share. . . . . . . . . . . . . . . . . . . . .17 .17 .68 1.22
Common share data - Steel Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Steel Stock . . . . . . . . . . . . . . . . . . $ 119 $(226) $(190) $ (274)
--Per share - primary . . . . . . . . . . . . . . . . . . . . 1.67 (3.80) (2.96) (4.92)
- fully diluted . . . . . . . . . . . . . . . . . 1.53 (3.80) (2.96) (4.92)
Cumulative effect of changes in accounting
principles. . . . . . . . . . . . . . . . . . . . . . . . . - - (69) (1,335)
--Per share - primary . . . . . . . . . . . . . . . . . . . . - - (1.08) (23.93)
- fully diluted . . . . . . . . . . . . . . . . . - - (1.08) (23.93)
Net income (loss) applicable to Steel
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 (226) (259) (1,609)
--Per share - primar. . . . . . . . . . . . . . . . . . . . . 1.67 (3.80) (4.04) (28.85)
- fully diluted . . . . . . . . . . . . . . . . . 1.53 (3.80) (4.04) (28.85)
Dividends paid per share . . . . . . . . . . . . . . . . . . . .25 .25 1.00 1.00
Common share data - Delhi Stock
Net income applicable to outstanding Delhi
Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.4 $ 2.0 $7.8
--Per share - primary and fully diluted . . . . . . . . . . . .15 .22 .86
Dividends paid per share . . . . . . . . . . . . . . . . . . . . .05 .05 .20
<FN>
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 15
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information for the Marathon Group, the U. S. Steel Group and the
Delhi Group, taken together, includes all accounts which comprise the
corresponding consolidated financial information for USX.
USX adopted two new accounting standards in the fourth quarter of 1993 which
resulted in restatement of the first nine months of 1993. Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," requires employers to recognize the obligation to
provide postemployment benefits on an accrual basis if certain conditions are
met. The cumulative effect of adopting this standard is reported as a change
in accounting principle effective January 1, 1993, and decreased net income by
$86 million, net of $50 million income tax effect. The increase to 1993
operating costs as a result of adopting this standard was $23 million.
The second accounting standard, Emerging Issues Task Force (EITF) Consensus
No. 93-14, "Accounting for Multiple-Year Retrospectively Rated Insurance
Contracts," requires accrual of retrospective premium adjustments when the
insured has an obligation to pay cash to the insurer that would not have been
required absent experience under the contract. The cumulative effect of this
change in accounting principle determined as of January 1, 1993, decreased net
income by $6 million, net of $3 million income tax effect.
In 1992, USX adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" (SFAS
No. 106), and Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (SFAS No. 109). The cumulative effect of these changes in
accounting principles decreased first quarter 1992 net income by $1.306
billion, net of $764 million income tax effect, for SFAS No. 106 and $360
million for SFAS No. 109.
Pretax income (loss) in 1993 included a $506 million charge ($127 million
credit in the fourth quarter) related to an adverse decision in the Lower Lake
Erie Iron Ore Antitrust Litigation against a former USX subsidiary, the
Bessemer & Lake Erie Railroad. Charges of $342 million were included in
operating costs ($96 million credit in the fourth quarter) and $164 million
included in net interest and other financial costs ($31 million credit in the
fourth quarter). The effect on 1993 net income (loss) was $325 million
unfavorable ($5.04 per share of Steel Stock) for 1993.
Changes in the inventory market valuation reserve resulted in a $241 million
charge against operating income in 1993 ($187 million charge in the fourth
quarter) and a $62 million credit to operating income in 1992 ($98 million
charge in the fourth quarter).
Operating income in the fourth quarter of 1993 included a restructuring charge
of $42 million for the planned permanent closure of a Pennsylvania coal mine.
In 1992, operating income included restructuring charges of $125 million ($10
million in the fourth quarter).
Pretax income (loss) in 1992 included the settlement of a production tax refund
claim for the years 1982 through 1985. The refund resulted in credits to
operating income of $119 million and interest income of $177 million in the
second quarter of 1992.
<PAGE> 16
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Other income in 1993 included pretax gains of $253 million from disposal of
assets ($102 million in the fourth quarter), primarily related to the sale of
the Cumberland Coal Mine, an investment in an insurance company and the fourth
quarter gain from the realization of proceeds from a subordinated note related
to the 1988 sale of Transtar, Inc. The collection of the Transtar note also
resulted in $37 million of interest income. Other income in 1992 included a
$19 million charge for impairment of a 25% interest in a natural gas
transmission partnership.
The provision for estimated U.S. and foreign income taxes for interim periods
is based on tax rates and amounts which recognize management's best estimate of
current and deferred tax assets and liabilities. The 1993 U.S. income tax
provision included a credit of $64 million related to recognition of additional
future U.S. income tax benefits for deferred foreign income taxes. This
favorable adjustment results from USX's ability to elect to credit, rather than
deduct, foreign income taxes for U.S. federal income tax purposes in future
periods. The U.S. income tax provision for 1993 also included a $29 million
charge associated with an increase in the federal income tax rate from 34% to
35%, reflecting remeasurement of deferred income tax liabilities as of January
1, 1993. Adjustments to the fourth quarter 1993 tax provision relate primarily
to prior years' Internal Revenue Service examinations and the establishment of
valuation allowances for certain tax credits which USX is not expected to be
able to fully utilize.
In 1993, USX sold 10,000,000 shares of Steel Stock to the public for net
proceeds of $350 million.
In 1993, USX also sold 6,900,000 shares of 6.50% Cumulative Convertible
Preferred Stock (stated value of $1.00 per share; initial liquidation
preference of $50 per share) to the public for net proceeds of $336 million.
The Convertible Preferred Stock is convertible at any time into shares of Steel
Stock at a conversion price of $46.125 per share of Steel Stock.
On October 2, 1992, USX sold the initial 9,000,000 shares of Delhi Stock to the
public. Net income and dividends per share applicable to outstanding Delhi
Stock are presented for the periods subsequent to October 2, 1992.
The numbers of shares used in the computation of earnings per share were as
follows:
<TABLE>
<CAPTION>
(In Thousands)
------------------------------------------------------------
Fourth Quarter Ended Year Ended
December 31 December 31
------------------------ -----------------------
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
Marathon Stock - primary . . . . . . . . . . . 286,582 286,276 286,594 283,494
- fully diluted . . . . . . . . 286,582 286,276 286,594 283,495
Steel Stock - primary. . . . . . . . . . . . . 70,311 59,551 64,370 55,764
- fully diluted. . . . . . . . . . 81,233 59,551 64,370 55,764
Delhi Stock - primary and fully
diluted. . . . . . . . . . . . . 9,155 9,001 9,067
</TABLE>
January 21, 1994
<PAGE> 1
EXHIBIT 99.2
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX ANNOUNCES FOURTH QUARTER AND FULL YEAR
U. S. STEEL GROUP FINANCIAL RESULTS
PITTSBURGH, January 21, 1994 -- Boosted by strong market
demand and excellent production performance, USX Corporation
today reported fourth quarter 1993 net income for its U. S.
Steel Group (NYSE:X) of $124 million, or $1.67 per share.
Fourth quarter 1993 net income included the favorable effect of
the reversal of certain litigation accruals and the realization
of income resulting from the collection of a subordinated note
related to the 1988 sale of Transtar, Inc. This was partially
offset by restructuring charges relating to coal facilities,
current period costs related to the adoption of Statement of
Financial Accounting Standards (SFAS) No. 112 -- Employers'
Accounting for Postemployment Benefits, certain charges
recorded by equity affiliates, certain charges related to prior
periods and several 1993 tax provision adjustments. The
estimated favorable aftertax effect of these items totaled $83
million. The U. S. Steel Group's net loss for the fourth
quarter of 1992 was $225 million, or $3.80 per share, which
included an estimated $166 million for the aftertax effect of
certain legal, environmental and other contingency accruals,
provisions for loan losses, restructuring charges, market
value provisions for foreclosed real estate assets and certain
other charges related to prior periods.
<PAGE> 2
Sales totaled $1.5 billion in the fourth quarter of
1993, up 28% from the fourth quarter of 1992.
Operating income for the fourth quarter of 1993 was
$137 million, compared with a restated operating loss of $288
million in fourth quarter of 1992. Fourth quarter 1993
operating income included the favorable effects of the
reversal of $109 million of accruals relating to the Bessemer
and Lake Erie Railroad (B&LE) litigation and Energy Buyers
litigation partially offset by restructuring charges of $42
million relating to the planned shutdown of the Maple Creek
Mine in southwestern Pennsylvania, the $6 million current
period effect of adopting SFAS No. 112 and aggregate pre-tax
charges of approximately $14 million for a number of items
including utility charges and property tax assessments related
to prior periods, and certain contingency accruals. Operating
income for the fourth quarter of 1992 included charges
totaling $264 million for certain legal, environmental and
other contingent liabilities, provisions for loan losses
related to USX Credit, completion of the 1992 restructuring
plan related to steel facilities, market value provisions for
foreclosed real estate assets and certain charges related to
prior periods.
USX Board Chairman Charles A. Corry said, "Fourth
quarter 1993 results for our U. S. Steel Group benefited from
the combination of a strengthening steel market and strong
steel production performance throughout our flat rolled
operations."
Other income for the fourth quarter of 1993 included a
pretax benefit of $70 million from the realization of income
resulting from the collection of a subordinated note related
to the 1988 sale of Transtar, Inc. and certain charges totaling
$7 million recorded by equity
<PAGE> 3
affiliates. Fourth quarter 1993 net interest and other financial
income reflected a $31 million pretax benefit from the reversal
of interest accruals related to litigation and $37 million of
interest income on the Transtar note.
U. S. Steel's fourth quarter 1993 shipments were 2.7
million net tons, up 18% over the 2.3 million-ton shipment
level in the fourth quarter of 1992. Shipments in 1993 were
10 million tons, up from the 8.9 million tons shipped in the
previous year.
The fourth quarter 1993 results reflected improved
production performance over the previous year at virtually all
U. S. Steel plants, with several significant production
records established.
The Mon Valley Works continuous caster continued its
excellent start-up in the fourth quarter, producing 674,000
tons. In August, the facility achieved a milestone by
producing two million tons of slabs in its initial year of
operation.
Record production levels were also achieved during the
quarter at U. S. Steel's Gary, Indiana, Works and at the
Fairfield, Alabama, Works. Gary's continuous caster complex
established new annual casting records, producing 6.6 million
tons for all of 1993.
Gary Works' hot strip mill rolled 1.4 million tons in
the fourth quarter, helping that facility set a new annual
tonnage record of 5.4 million tons. Gary's five-stand cold
reduction mill also established a record in 1993 with 2.4
million tons processed.
Fairfield's continuous slab and bloom casting
facilities broke their previous production record in 1993 by
casting a total of 2.2 million tons.
<PAGE> 4
"Our employees and facilities responded in excellent
fashion to the strong market demand in the fourth quarter with
high levels of production and excellent quality and shipment
performance," Corry said. "Financial results for the quarter
also reflect the success of ongoing efforts to reduce
operating costs."
Corry continued, "The market outlook is solid, with
order book levels high through the first quarter. U. S. Steel
forecasts 1994 domestic industry shipments of 89 million to 90
million tons, up from estimated 1993 shipments of 88 million
tons. Flat-rolled markets key to U. S. Steel's commercial
strategies remain strong -- most notably automotive.
Construction, appliance and tin mill markets also remain
strong."
Corry noted, "The strong domestic market, coupled with
ongoing soft market conditions in Europe and Japan, raise
potential concerns about rising steel imports. Although there
are no indications of a major surge, steel imports into the
U.S. have been on the rise for several months." Corry
concluded, "It remains important for the industry and the
U.S. Government to be on watch for a new glut of unfairly traded
imports."
For the year 1993, the U. S. Steel Group recorded a loss
before the cumulative effect of changes in accounting
principles of $169 million, or $2.96 per share, which included
a $325 million net unfavorable effect from charges for the
B&LE litigation. This compares with a 1992 net loss before
the cumulative effect of changes in accounting principles of
$271 million, or $4.92 per share. Sales were $5.6 billion in
1993 compared with $4.9 billion in 1992. The net loss for the
year 1993 totaled $238 million, or $4.04 per share, which
included the $69 million unfavorable effect of
<PAGE> 5
adopting SFAS No. 112 -- Employers' Accounting for
Postemployment Benefits. The cumulative effect of adopting
the standard was reported as a change in accounting principle
and reflected as a restatement of the U. S. Steel Group's
previously reported first quarter 1993 net income. The net
loss for 1992 was $1.606 billion, or $28.85 per share, which
included the $1.335 billion combined unfavorable cumulative
noncash effects of adopting SFAS No. 106 and SFAS No. 109.
For the year 1993, the U. S. Steel Group reported an
operating loss of $149 million, compared with a restated 1992
operating loss of $241 million. The operating loss in the 1993
period included $364 million for the net unfavorable effects
of the B&LE and Energy Buyers litigations, restructuring
charges, current period costs related to the adoption of SFAS
No. 112, certain litigation and environmental charges and the
favorable effect of the utilization of insurance reserves to
pay certain employee insurance benefits. Operating income in
1992 included charges totaling $273 million for certain legal,
environmental and other contingent liabilities, provisions for
loan losses related to USX Credit, restructuring charges and
market value provisions for foreclosed real estate assets.
* * * * * * * *
Supplemental statistics and condensed financial
statements for the U. S. Steel Group and condensed
consolidated financial statements for USX Corporation are
attached.
<PAGE> 6
<TABLE>
U. S. STEEL GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992* 1993 1992*
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES................................................ $1,548 $1,214 $5,612 $ 4,919
Total operating costs................................ (1,411) (1,502) (5,761) (5,160)
------ ------ ------ -------
Operating income (loss).............................. 137 (288) (149) (241)
Other income......................................... 77 2 210 5
Net interest and other financial income (costs)...... 35 (40) (271) (158)
------ ------ ------ -------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES............................ 249 (326) (210) (394)
Less provision (credit) for estimated
U.S. and foreign income taxes.................... 125 (101) (41) (123)
------ ------ ------ -------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING
PRINCIPLES....................................... 124 (225) (169) (271)
Cumulative effect of changes in
accounting principles............................ - - (69) (1,335)
------ ------ ------ -------
NET INCOME (LOSS).................................... 124 (225) (238) (1,606)
Dividends on preferred stock......................... (5) (1) (21) (3)
------ ------ ------ -------
NET INCOME (LOSS) APPLICABLE TO STEEL
STOCK............................................ $119 $(226) $(259) $(1,609)
====== ====== ====== =======
Per common share data:
Weighted average shares, in thousands:
- Primary.................................... 70,311 59,551 64,370 55,764
- Fully diluted.............................. 81,233 59,551 64,370 55,764
Primary:
Total income (loss) before cumulative effect
of changes in accounting principles........ $1.67 $(3.80) $(2.96) $(4.92)
Cumulative effect of changes in
accounting principles...................... - - (1.08) (23.93)
Net income (loss)............................ 1.67 (3.80) (4.04) (28.85)
Fully diluted:
Total income (loss) before cumulative effect
of changes in accounting principles........ $1.53 $(3.80) $(2.96) $(4.92)
Cumulative effect of changes in
accounting principles...................... - - (1.08) (23.93)
Net income (loss)............................ 1.53 (3.80) (4.04) (28.85)
Dividends paid............................... .25 .25 1.00 1.00
<FN>
* Certain reclassifications of data have been made to conform to 1993 classifications.
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 7
<TABLE>
U. S. STEEL GROUP OF USX CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
<CAPTION>
December 31 December 31
(In Millions) 1993 1992 1993 1992
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents........ $ 79 $ 22 Current liabilities..... $1,621 $1,263
Receivables - net..... 596 447 Long-term debt.......... 1,540 2,132
Inventories........... 629 644 Other liabilities....... 2,785 2,609
Other current assets.. 271 208
----- ----- ----- -----
Total current assets 1,575 1,321 Total liabilities 5,946 6,004
Property, plant and Preferred stock........ 32 25
equipment - net...... 2,653 2,809 Common stockholders'
Other assets.......... 2,335 2,121 equity............... 585 222
----- ----- ----- -----
Total............... $6,563 $6,251 Total................. $6,563 $6,251
===== ===== ===== =====
<FN>
Revised January 25, 1994 to reflect minor reclassifications.
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 8
U. S. STEEL GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
The condensed financial statements of the U. S. Steel Group include the results
of operations and financial position for all businesses of USX other than the
businesses, assets and liabilities included in the Marathon Group or the Delhi
Group, and a portion of the corporate assets, liabilities and related
transactions that are not separately identified with ongoing operating units of
USX. These condensed financial statements should be read in connection with
the condensed consolidated financial statements of USX.
USX adopted a new accounting standard in the fourth quarter of 1993, which
resulted in restatement of the first nine months of 1993. Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," requires employers to recognize the obligation to
provide postemployment benefits on an accrual basis if certain conditions are
met. The cumulative effect of adopting this standard is reported as a change in
accounting principle effective January1,1993, and decreased 19 93 net income
of the U. S. Steel Group by $69 million. The increase to 1993 operating costs
as a result of adopting this standard was $21 million.
In 1992, USX adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS No.106), and Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109). The cumulative effect of these
changes in accounting principles decreased first quarter 1992 net income of the
U. S. Steel Group by $1.159 billion, net of $678 million income tax effect, for
SFAS No. 106 and $176 million for SFAS No. 109.
Pretax loss in 1993 included a $506 million charge ($127 million credit in the
fourth quarter) related to an adverse decision in the Lower Lake Erie Ore
Antitrust Litigation against a former USX subsidiary, the Bessemer & Lake Erie
Railroad (B&LE). Charges of $342 million were included in operating costs ($96
million credit in the fourth quarter) and $164 million included in net interest
and other financial costs ($31 million credit in the fourth quarter). The
effect on 1993 net loss was $325 million unfa vorable ($5.04 per share) for
1993.
Operating income in the fourth quarter of 1993 included a restructuring charge
of $42 million for the planned permanent closure of a Pennsylvania coal mine.
In the fourth quarter of 1992, operating income included a $10 million
restructuring charge.
Other income in 1993 included a pretax gain of $216 million from disposal of
assets ($77 million in the fourth quarter), primarily related to the sale of
Cumberland Coal Mine, an investment in an insurance company and the fourth
quarter gain from the realization of proceeds from a subordinated note related
to the 1988 sale of Transtar, Inc. The collection of the Transtar note also
resulted in $37 million of interest income.
The provision for estimated U.S. and foreign income taxes for interim periods
is based on tax rates and amounts which recognize management's best estimate of
current and deferred tax assets and liabilities in accordance with USX's tax
allocation policy. The 1993 U.S. income tax provision included a $15 million
favorable effect associated with an increase in the federal income tax rate
from 34% to 35%, reflecting remeasurement of deferred income tax assets as of
January 1, 1993. Adjustments to the fourth q uarter 1993 tax provision relate
primarily to prior years' Internal Revenue Service examinations and the
establishment of valuation allowances for certain tax credits which USX is not
expected to be able to fully utilize.
<PAGE> 9
U. S. STEEL GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
(Continued)
In 1993, USX sold 10,000,000 shares of USX-U. S. Steel Group Common Stock to
the public for net proceeds of $350 million, which have been reflected in their
entirety in the financial statements of the U. S. Steel Group.
In 1993, USX also sold 6,900,000 shares of 6.50% Cumulative Convertible
Preferred Stock (stated value of $1.00 per share; liquidation preference of $50
per share) to the public for net proceeds of $336 million which have been
reflected in their entirety in the financial statements of the U. S. Steel
Group. The Convertible Preferred Stock is convertible at any time into shares
of Steel Stock at a conversion price of $46.125 per share of Steel Stock.
January 21, 1994
<PAGE> 10
<TABLE>
U. S. STEEL GROUP OF USX CORPORATION
SUPPLEMENTAL STATISTICS
($'s in Millions)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
--------------- --------------
1993 1992 1993 1992
------- ------ ------ ------
<S> <C> <C> <C> <C>
SALES(A)
Steel and Related Businesses (B) $1,489 $1,210 $5,422 $4,752
Other Businesses (C) 59 4 190 167
------ ------ ------ ------
Total U. S. Steel Group $1,548 $1,214 $5,612 $4,919
====== ====== ====== ======
OPERATING INCOME (LOSS) (A)
Steel and Related Businesses (B) $ 48 $ (115) $ 123 (140)
Other Businesses (C) (11) (64) (29) (96)
Administrative (D) 46 (99) 141 5
Special Items: B&LE Litigation 96 - (342) -
Restructuring (42) (10) (42) (10)
----- ------ ------ -----
Total U. S. Steel Group $ 137 $ (288) $ (149) $ (241)
====== ====== ====== ======
CAPITAL SPENDING
Total U. S. Steel Group $ 62 $ 56 $ 198 $ 298
Steel Joint Ventures $ 10 $ 19 $ 29 $ 60
OPERATING STATISTICS
Public & Affil. Shipments (E) 2,685 2,283 9,969 8,854
Raw SteelProduction (E) 2,926 2,495 11,334 10,435
Raw SteelCapability Utilization 98.0% 83.7% 95.6% 85.9%
<FN>
(A) Sales and operating income (loss) for 1992 were reclassified to
conform to 1993 classifications.
(B) Includes the production and sale of steel products, coke and
taconite pellets; domestic coal mining; the management of mineral
resources; and engineering and consulting services and technology
licensing.
(C) Includes real estate; fencing products; leasing and financing
activities; and titanium metal products.
(D) Includes pension credits, other postretirement benefit costs and
certain other expenses principally attributable to former
business units of the U. S. Steel Group as well as the portion of
USX corporate general and administrative costs allocated to the
U. S. Steel Group.
(E) Thousands of net tons
</TABLE>
<PAGE> 11
<TABLE>
USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992* 1993 1992*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES................................... $4,604 $4,575 $18,064 $17,813
Total operating costs................... (4,576) (4,960) (18,008) (17,743)
------- ------- -------- --------
Operating income (loss)................. 28 (385) 56 70
Other income (loss)..................... 102 (2) 257 (2)
Net interest and other
financial costs........................ (40) (116) (552) (257)
------- ------- -------- --------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES.................. 90 (503) (239) (189)
Less provision (credit) for estimated
income taxes
- United States...................... (12) (171) (156) (64)
- Foreign............................ 65 11 84 35
------- ------- -------- --------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING
PRINCIPLES............................. 37 (343) (167) (160)
Cumulative effect of changes in
accounting principles.................. - - (92) (1,666)
------- ------- -------- --------
NET INCOME (LOSS)....................... 37 (343) (259) (1,826)
Dividends on preferred stock (7) (2) (27) (9)
------- ------- -------- --------
NET INCOME (LOSS) APPLICABLE TO COMMON
STOCKS................................. $ 30 $ (345) $ (286) $(1,835)
====== ====== ======= =======
</TABLE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
<CAPTION>
December December
(In Millions) 1993 1992 1993 1992
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents.............. $ 268 $ 57 Current liabilities........... $ 3,334 $ 3,470
Receivables - net......... 932 924 Long-term debt................ 5,888 5,968
Inventories............... 1,626 1,930 Other liabilities............. 4,234 4,105
Other current assets...... 354 189
----- ----- ------ ------
Total Assets............ 3,180 3,100 Total liabilities........... 13,456 13,543
Property, plant and Preferred stock............... 112 105
equipment - net.......... 11,603 11,759 Common stockholders'
Other assets.............. 2,537 2,393 equity....................... 3,752 3,604
----- ----- ------ ------
Total................... $17,320 $17,252 Total....................... $17,320 $17,252
======= ======= ======= =======
<FN>
* Certain reclassifications of data have been made to conform to 1993
classifications.
The following common share data and notes are an integral part of these
financial statements.
</TABLE>
<PAGE> 12
<TABLE>
USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992 1993 1992
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common share data - Marathon Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Marathon Stock................. $ (90) $(121) $ (12) $ 103
--Per share - primary and fully diluted...... (.31) (.42) (.04) .37
Cumulative effect of changes in accounting
principles................................... - - (23) (331)
--Per share - primary and fully diluted...... - - (.08) (1.17)
Net income (loss) applicable to Marathon
Stock........................................ (90) (121) (35) (228)
--Per share - primary and fully diluted...... (.31) (.42) (.12) (.80)
Dividends paid per share....................... .17 .17 .68 1.22
Common share data - Steel Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Steel Stock.................... $ 119 $ (226) $(190) $ (274)
--Per share - primary........................ 1.67 (3.80) (2.96) (4.92)
- fully diluted.................. 1.53 (3.80) (2.96) (4.92)
Cumulative effect of changes in accounting
principles................................... - - (69) (1,335)
--Per share - primary........................ - - (1.08) (23.93)
- fully diluted.............................. - - (1.08) (23.93)
Net income (loss) applicable to Steel
Stock........................................ 119 (226) (259) (1,609)
--Per share - primary........................ 1.67 (3.80) (4.04) (28.85)
- fully diluted.................. 1.53 (3.80) (4.04) (28.85)
Dividends paid per share....................... .25 .25 1.00 1.00
Common share data - Delhi Stock
Net income applicable to outstanding Delhi
Stock........................................ $ 1.4 $ 2.0 $ 7.8
--Per share - primary and fully diluted ..... .15 .22 .86
Dividends paid per share....................... .05 .05 .20
<FN>
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 13
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information for the Marathon Group, the U. S. Steel Group and the
Delhi Group, taken together, includes all accounts which comprise the
corresponding consolidated financial information for USX.
USX adopted two new accounting standards in the fourth quarter of 1993 which
resulted in restatement of the first nine months of 1993. Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," requires employers to recognize the obligation to
provide postemployment benefits on an accrual basis if certain conditions are
met. The cumulative effect of adopting this standard is reported as a change
in accounting principle effective January 1, 1993, and decreased net income by
$86 million, net of $50 million income tax effect. The increase to 1993
operating costs as a result of adopting this standard was $23 million.
The second accounting standard, Emerging Issues Task Force (EITF) Consensus
No.93-14, "Accounting for Multiple-Year Retrospectively Rated Insurance
Contracts," requires accrual of retrospective premium adjustments when the
insured has an obligation to pay cash to the insurer that would not have been
required absent experience under the contract. The cumulative effect of this
change in accounting principle determined as of January 1, 1993, decreased net
income by $6 million, net of $3 million income tax effect.
In 1992, USX adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS No.106), and Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109). The cumulative effect of these
changes in accounting principles decreased first quarter 1992 net income by
$1.306 billion, net of $764 million income tax effect, for SFAS No. 106 and
$360 million for SFAS No.109.
Pretax income (loss) in 1993 included a $506 million charge ($127 million
credit in the fourth quarter) related to an adverse decision in the Lower Lake
Erie Iron Ore Antitrust Litigation against a former USX subsidiary, the
Bessemer & Lake Erie Railroad. Charges of $342 million were included in
operating costs ($96 million credit in the fourth quarter) and $164 million
included in net interest and other financial costs ($31 million credit in the
fourth quarter). The effect on 1993 net income (loss) was $ 325 million
unfavorable ($5.04 per share of Steel Stock) for 1993.
Changes in the inventory market valuation reserve resulted in a $241 million
charge against operating income in 1993 ($187 million charge in the fourth
quarter) and a $62 million credit to operating income in 1992 ($98 million
charge in the fourth quarter).
Operating income in the fourth quarter of 1993 included a restructuring charge
of $42 million for the planned permanent closure of a Pennsylvania coal mine.
In 1992, operating income included restructuring charges of $125 million ($10
million in the fourth quarter).
Pretax income (loss) in 1992 included the settlement of a production tax refund
claim for the years 1982 through 1985. The refund resulted in credits to
operating income of $119 million and interest income of $177 million in the
second quarter of 1992.
<PAGE> 14
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Other income in 1993 included pretax gains of $253 million from disposal of
assets ($102 million in the fourth quarter), primarily related to the sale of
the Cumberland Coal Mine, an investment in an insurance company and the fourth
quarter gain from the realization of proceeds from a subordinated note related
to the 1988 sale of Transtar, Inc. The collection of the Transtar note also
resulted in $37 million of interest income. Other income in 1992 included a
$19 million charge for impairment of a 25% interest in a natural gas
transmission partnership.
The provision for estimated U.S. and foreign income taxes for interim periods
is based on tax rates and amounts which recognize management's best estimate of
current and deferred tax assets and liabilities. The 1993 U.S. income tax
provision included a credit of $64 million related to recognition of additional
future U.S. income tax benefits for deferred foreign income taxes. This
favorable adjustment results from USX's ability to elect to credit, rather than
deduct, foreign income taxes for U.S. federal income tax purposes in future
periods. The U.S. income tax provision for 1993 also included a $29 million
charge associated with an increase in the federal income tax rate from 34% to
35%, reflecting remeasurement of deferred income tax liabilities as of January
1, 1993. Adjustments to the fourth quarter 1993 tax provision relate primarily
to prior years' Internal Revenue Service examinations and the establishment of
valuation allowances for certain tax credits which USX is not expected to be
able to fully utilize.
In 1993, USX sold 10,000,000 shares of Steel Stock to the public for net
proceeds of $350 million.
In 1993, USX also sold 6,900,000 shares of 6.50% Cumulative Convertible
Preferred Stock (stated value of $1.00 per share; initial liquidation
preference of $50 per share) to the public for net proceeds of $336 million.
The Convertible Preferred Stock is convertible at any time into shares of Steel
Stock at a conversion price of $46.125 per share of Steel Stock.
On October 2, 1992, USX sold the initial 9,000,000 shares of Delhi Stock to the
public. Net income and dividends per share applicable to outstanding Delhi
Stock are presented for the periods subsequent to October 2, 1992.
The numbers of shares used in the computation of earnings per share were as
follows:
<TABLE>
<CAPTION>
(In Thousands)
---------------------------------------------
Fourth Quarter Ended Year Ended
December 31 December 31
--------------------- -------------------
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
Marathon Stock - primary.......... 286,582 286,276 286,594 283,494
- fully diluted.... 286,582 286,276 286,594 283,495
Steel Stock - primary............. 70,311 59,551 64,370 55,764
- fully diluted....... 81,233 59,551 64,370 55,764
Delhi Stock - primary and fully
diluted............. 9,155 9,001 9,067
January 21, 1994
</TABLE>
<PAGE> 1
EXHIBIT 99.3
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX ANNOUNCES FOURTH QUARTER AND FULL YEAR
DELHI GROUP FINANCIAL RESULTS
PITTSBURGH, January 21, 1994 -- USX Corporation announced
that in 1993 many of Delhi Group's (NYSE:DGP) key performance
indicators, including systems throughput, NGL sales volumes,
capital expenditures, and dedicated reserve additions were at
their highest level since 1985. This translated into total year
1993 net income of $12.2 million, or $.86 per share, which
included an estimated net charge of $2.2 million for the
aftertax effect of remeasuring prior period tax liabilities
associated with the increase in the federal income tax rate,
certain asset sales, certain accrual reversals, and a tax refund.
This compares with 1992 pro forma income before the cumulative
effect of the change in accounting principle of $13.8 million or
$.98 per share, which included a net favorable aftertax effect of
$0.9 million related to the settlement of certain lawsuits and
third party disputes. Sales totaled $534.8 million in 1993, up
17% from $457.8 million in 1992.
For the fourth quarter 1993 net income was $2.1
million, or $.15 per share. Net income in the fourth quarter of
1992 was $3.1 million, or $.22 per share. Fourth quarter 1993
sales totaled $143.5 million, up 5% from the prior year.
<PAGE> 2
Fourth quarter operating income for the Delhi Group
totaled $5.9 million, down 20% from the same quarter of 1992. The
benefits of lower operating and other expenses were more than
offset by lower average prices and volumes for natural gas
liquids (NGLs) and a decline in natural gas transportation
margins and throughput volumes. Due to the lower NGL prices in
the fourth quarter of 1993, Delhi chose not to fully process some
gas and this contributed to the decline in NGL sales volumes.
The fourth quarter 1993 gas sales margin was $27.7 million,
essentially unchanged from last year's fourth quarter, as the
benefit of increased gas sales throughput volumes was offset by
volatile gas prices in the spot market which caused a decline in
gas sales unit margins.
For the year 1993, Delhi Group operating income totaled
$35.6 million, up 9% from 1992. Operating income for 1993
included favorable effects of $1.8 million for the reversal of a
prior-period accrual related to a natural gas contract
settlement, $0.8 million related to gas imbalance settlements and
a net $0.6 million refund of prior years' taxes other than
income. Operating income in 1992 included favorable effects
totaling $1.5 million relating to the settlement of various
lawsuits and third-party disputes. Excluding the effects of
these items, 1993 operating income improved by $1.3 million
mainly due to increased gas sales margins and lower operating and
other expenses. NGL margins declined in 1993 from the prior year
as higher average natural gas prices, primarily in the first nine
months, led to increased feedstock costs for gas processing. In
addition, NGL prices trended downward with crude oil prices in
the last half of 1993, further depressing NGL margins.
<PAGE> 3
USX Chairman Charles A. Corry stated, "Despite the lower
fourth quarter earnings, Delhi continues to benefit from an
aggressive expenditure program to connect dedicated reserves.
This is reflected in Delhi's increased 1993 throughput volumes
for both the quarter and the year. In 1993, Delhi increased its
capital expenditures by 60% to $42.6 million and added 382
billion cubic feet of new dedicated natural gas reserves, a 40%
increase in new additions over those added in 1992. Entering
1994, Delhi is well positioned to take advantage of favorable
economic, environmental and regulatory conditions currently
existing and developing in the natural gas industry."
During the fourth quarter, Delhi completed a
multi-pipeline interconnection and compression project in East
Texas. This project will increase marketing flexibility and
expand Delhi's access to interstate and intrastate pipelines. It
will also facilitate Delhi's ability to aggregate gas for
delivery to premium off-system markets now developing in the
Midwest and Northeast as a result of FERC Order 636. Also in the
fourth quarter, Delhi purchased a cryogenic gas processing plant
near their existing systems in South Texas. This acquisition
will enable Delhi to process surplus gas volumes now leaving the
system unprocessed and to increase pipeline capacity in the area.
Corry also noted, "Delhi remains committed to optimizing
profitability from existing assets. In the first quarter of
1994, we expect to complete a project in western Oklahoma which
includes installing compression, making new pipeline
interconnections with third parties and redesigning and moving an
idle processing plant. This project will expand
<PAGE> 4
system and processing capacity and improve Delhi's access to
interstate markets."
The cumulative effect of adopting Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" in
1992 was reported as a favorable $17.9 million change in
accounting principle.
Delhi is an established natural gas merchant engaged in
the purchasing, processing, transporting and marketing of natural
gas. It operates an extensive pipeline systems of over 8,000
miles and has 22 gas processing plants, primarily in Texas and
Oklahoma.
* * * * * * * *
Supplemental statistics and condensed financial
statements for the Delhi Group and condensed consolidated
financial statements for USX Corporation are attached.
<PAGE> 5
<TABLE>
DELHI GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992 1993 1992
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES................................................. $143.5 $136.9 $534.8 $457.8
Total operating costs................................. (137.6) (129.5) (499.2) (425.2)
------ ------ ------ ------
Operating income...................................... 5.9 7.4 35.6 32.6
Other income.......................................... .3 .4 5.2 1.7
Net interest and other financial costs................ (2.8) (2.6) (10.5) (4.6)
------ ------ ------ ------
TOTAL INCOME BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE.......................... 3.4 5.2 30.3 29.7
Less provision for estimated U.S. income
taxes......................................... 1.3 2.1 18.1 11.1
------ ------ ------ ------
TOTAL INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE..................................... 2.1 3.1 12.2 18.6
Cumulative effect of change in
accounting principle.......................... - - - 17.9
------ ------ ------ ------
NET INCOME............................................ 2.1 3.1 12.2 $36.5
====== ====== ====== ======
Dividends on preferred stock.......................... - - (.1)
Net income applicable to Retained Interest............ (.7) (1.1) (4.3)
------ ------ ------
NET INCOME APPLICABLE TO DELHI
STOCK......................................... $ 1.4 $ 2.0 $ 7.8
====== ====== ======
Per common share data:
Weighted average shares, in thousands:
- Primary and fully diluted................... 9,155 9,001 9,067
Net income - primary and fully diluted........ $ .15 $ .22 $ .86
Dividends paid................................ .05 .05 .20
Pro forma income data:
Pro Forma
Total income before cumulative effect of ----------
change in accounting principle........ $ 13.8
Total income before cumulative effect of
change in accounting principle
applicable to outstanding Delhi Stock. 8.8
--Per share........................... .98
Average shares, in thousands.................. 9,000
<FN>
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 6
<TABLE>
DELHI GROUP OF USX CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
<CAPTION>
December 31 December 31
(In Millions) 1993 1992 1993 1992
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents........... $ 3.8 $ .1 Current liabilities... $102.4 $109.7
Receivables - net....... 24.2 12.2 Long-term debt........ 109.0 92.5
Inventories............. 9.6 8.4 Other liabilities..... 163.5 166.2
Other current assets.... 4.6 4.8
----- ----- ------ ------
Total current assets.. 42.2 25.5 Total liabilities 374.9 368.4
Property, plant and Preferred stock........ 2.5 2.5
equipment - net....... 521.8 516.6 Common stockholders'
Other assets............ 16.4 22.4 equity............... 203.0 193.6
----- ----- ------ ------
Total................ $580.4 $564.5 Total.............. $580.4 $564.5
===== ===== ====== ======
<FN>
Revised January 25, 1994 to reflect minor reclassifications.
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 7
DELHI GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
On October 2, 1992, USX publicly sold 9,000,000 shares of a new class of common
stock, USX-Delhi Group Common Stock (Delhi Stock), which is intended to reflect
the performance of the Delhi Group. Beginning October 2, 1992, the condensed
financial statements of the Delhi Group include the results of operations and
financial position for the businesses of Delhi Gas Pipeline Corporation and
certain subsidiaries of USX, and a portion of the corporate assets, liabilities
and related transactions that are not se parately identified with ongoing
operating units of USX. Prior to October 2, 1992, the businesses of the Delhi
Group were included in the Marathon Group. These condensed financial
statements should be read in connection with the condensed consolidated
financial statements of USX.
The USX Board of Directors initially designated 14,000,000 shares of Delhi
Stock as the total number of shares of Delhi Stock which it deemed to represent
100% of the common stockholders' equity value of USX attributable to the Delhi
Group. The Delhi Fraction is the percentage interest in the Delhi Group
represented by the shares of Delhi Stock that are outstanding at any particular
time and, based on 9,282,870 outstanding shares as of December 31, 1993, is
approximately 66%. The Marathon Group financial statements reflect a Retained
Interest of approximately 34% in the Delhi Group at December 31, 1993.
Other income in 1993 included a pretax gain of $2.9 million from disposal of
assets. The disposal of assets included a pretax gain of $1.6 million from the
first quarter 1993 sale of a 25% interest in a natural gas transmission
partnership. The provision for estimated U.S. income taxes for the first
quarter of 1993 included an unfavorable tax effect associated with the sale of
the partnership interest, which resulted in a $1.3 million net loss on the
transaction.
The provision for estimated U.S. income taxes for interim periods is based on
tax rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities in accordance with USX's tax allocation
policy. The 1993 U.S. income tax provision included a $4.1 million charge
associated with an increase in the federal income tax rate from 34% to 35%,
reflecting remeasurement of deferred income tax liabilities as of January 1,
1993.
In 1992, USX adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." The cumulative effect of this change in
accounting principle increased first quarter 1992 net income of the Delhi Group
by $17.9 million.
The pro forma income data is based on the assumption that the capital structure
of the Delhi Group, determined as of June 30, 1992, was in effect as of January
1, 1992. The historical income before the cumulative effect of the change in
accounting principle has been adjusted to reflect the weighted average effects
of all USX financial activities assumed to be attributed to the Delhi Group and
the change in income taxes due to recognition of these adjustments. Pro forma
income before the cumulative effect of the change in accounting principle
applicable to outstanding Delhi Stock represents pro forma income before the
cumulative effect of the change in accounting principle less dividends on
attributed preferred stock and income applicable to the Retained Interest. The
pro forma income per share before the cumulative effect of the change in
accounting principle applicable to outstanding Delhi Stock is based on the
weighted average number of shares outstanding, which assumes the 9,000,000
shares initially sold were outstanding for the period.
<PAGE> 8
DELHI GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
(continued)
Sales to one of Delhi's largest customers, SWEPCO, pursuant to one contract
expiring in April 1995 are at prices substantially above spot prices and, as a
result, this contract has accounted for more than 10% of Delhi's total gross
margin in each year subsequent to 1990. This contract is currently the subject
of litigation between SWEPCO and Delhi. SWEPCO's alleged damages, including
interest, could approximate $76.8 million through December 31, 1993, and could
increase by approximately $6.1million per quarter through April 1995. On
November 1, 1993, SWEPCO advised Delhi that, effective with payments due on or
after such date, SWEPCO would deposit to the custody of the Court cash amounts
it alleges to be overcharges for gas sold and delivered to SWEPCO under the
contract. The deposit of such amounts, which adversely affect cash flows, was
$3.6 million in the fourth quarter of 1993 and could approximate $4.9 million
per quarter thereafter. SWEPCO continues to pay Delhi for gas taken under the
contract at prices which reflect its interpretation of the contract. Delhi
continues to record the sales revenue associated with both the amounts
currently being paid and the amounts being deposited with the Court. An
adverse decision in this litigation could have a material adverse effect on
Delhi. Delhi continues to believe that it will prevail in this matter,
accordingly, no provision for loss has been established in this case. The
trial is scheduled to commence on March 14, 1994, and mediation efforts between
the parties are ongoing.
January 21, 1994
<PAGE> 9
<TABLE>
DELHI GROUP OF USX CORPORATION
SUPPLEMENTAL STATISTICS
($'s in Millions)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
-------------- --------------
1993 1992 1993 1992
<S> <C> <C> <C> <C>
SALES $143.5 $136.9 $534.8 $457.8
- -----------------------------
GROSS MARGIN
- -----------------------------
Gas Sales Margin $ 27.7 $ 27.8 $104.5 $ 96.1
Transportation Margin 2.9 4.2 14.2 14.8
------ ------ ------ ------
Systems Margin 30.6 32.0 118.7 110.9
Gas Processing Margin .9 4.6 17.3 26.1
------ ------ ------ ------
Total Gross Margin $ 31.5 $ 36.6 $136.0 $137.0
OPERATING INCOME $ 5.9 $ 7.4 $ 35.6 $ 32.6
- -----------------------------
CAPITAL EXPENDITURES $ 21.6 $ 13.3 $ 42.6 $ 26.6
- -----------------------------
OPERATING STATISTICS
- -----------------------------
Natural Gas Throughput (A):
Natural Gas Sales 598.2 511.0 556.7 546.4
Transportation 288.2 316.7 322.1 282.6
------ ------ ------ ------
Systems Throughput 886.4 827.7 878.8 829.0
Partnerships - equity share 18.5 29.2 17.9 27.8
------ ------ ------ ------
Total Throughput 904.9 856.9 896.7 856.8
====== ====== ====== ======
Natural Gas Liquids Sales (B) 672.2 815.0 772.5 714.2
<FN>
(A) Millions of cubic feet per day
(B) Thousands of gallons per day
</TABLE>
<PAGE> 10
<TABLE>
USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992* 1993 1992*
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES................................................. $4,604 $4,575 $18,064 $17,813
Total operating costs................................. (4,576) (4,960) (18,008) (17,743)
------ ------ ------- -------
Operating income (loss)............................... 28 (385) 56 70
Other income (loss)................................... 102 (2) 257 (2)
Net interest and other financial costs................ (40) (116) (552) (257)
------ ------ ------- -------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES......................... 90 (503) 239 (189)
Less provision (credit) for estimated
income taxes..................................
- United States............................... (12) (171) (156) (64)
- Foreign..................................... 65 11 84 35
------ ------ ------- -------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLES.................................... 37 (343) (167) (170)
Cumulative effect of changes in
accounting principles......................... - - (92) (1,666)
------ ------ ------- -------
NET INCOME (LOSS)..................................... 37 (343) (259) (1,826)
Dividends on preferred stock.......................... (7) (2) (27) (9)
------ ------ ------- -------
NET INCOME (LOSS) APPLICABLE TO COMMON
STOCKS........................................ $ 30 $ (345) $ (286) $(1,835)
====== ====== ======= =======
</TABLE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
<CAPTION>
December 31 December 31
(In Millions) 1993 1992 1993 1992
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents.......... $ 268 $ 57 Current liabilities.. $ 3,334 $ 3,470
Receivables - net....... 932 924 Long-term debt........ 5,888 5,968
Inventories............. 1,626 1,930 Other liabilities..... 4,234 4,105
Other current assets.... 354 189
------ ------ ------ ------
Total current assets.. 3,180 3,100 Total liabilities 13,456 13,543
Property, plant and Preferred stock........ 112 105
equipment - net....... 11,603 11,759 Common stockholders'
Other assets............ 2,537 2,393 equity............... 3,752 3,604
------ ------ ------ ------
Total................ $17,320 $17,252 Total............. $17,320 $17,252
====== ====== ====== ======
<FN>
* Certain reclassifications of data have been made to conform to 1993
classifications.
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 11
<TABLE>
USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
<CAPTION>
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992 1993 1992
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common share data - Marathon Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Marathon Stock.................. $(90) $(121) $(12) $ 103
--Per share - primary and fully diluted....... (.31) (.42) (.04) .37
Cumulative effect of changes in accounting
principles.................................... - - (23) (331)
--Per share - primary and fully diluted....... - - (.08) (1.17)
Net income (loss) applicable to Marathon
Stock......................................... (90) (121) (35) (228)
--Per share - primary and fully diluted....... (.31) (.42) (.12) (.80)
Dividends paid per share...................... .17 .17 .68 1.22
Common share data - Steel Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Steel Stock..................... $119 $(226) $(190) $ (274)
--Per share - primary......................... 1.67 (3.80) (2.96) (4.92)
- fully diluted............................... 1.53 (3.80) (2.96) (4.92)
Cumulative effect of changes in accounting
principles.................................... - - (69) (1,335)
--Per share - primary......................... - - (1.08) (23.93)
- fully diluted............................... - - (1.08) (23.93)
Net income (loss) applicable to Steel
Stock......................................... 119 (226) (259) (1,609)
--Per share - primary................. 1.67 (3.80) (4.04) (28.85)
- fully diluted............................... 1.53 (3.80) (4.04) (28.85)
Dividends paid per share...................... .25 .25 1.00 1.00
Common share data - Delhi Stock
Net income applicable to outstanding Delhi
Stock...................................... $1.4 $2.0 $7.8
--Per share - primary and fully diluted ... .15 .22 .86
Dividends paid per share................... .05 .05 .20
<FN>
The following notes are an integral part of these financial statements.
</TABLE>
<PAGE> 12
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information for the Marathon Group, the U. S. Steel Group and the
Delhi Group, taken together, includes all accounts which comprise the
corresponding consolidated financial information for USX.
USX adopted two new accounting standards in the fourth quarter of 1993 which
resulted in restatement of the first nine months of 1993. Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," requires employers to recognize the obligation to
provide postemployment benefits on an accrual basis if certain conditions are
met. The cumulative effect of adopting this standard is reported as a change
in accounting principle effective January 1, 1993, and decreased net income by
$86 million, net of $50 million income tax effect. The increase to 1993
operating costs as a result of adopting this standard was $23 million.
The second accounting standard, Emerging Issues Task Force (EITF) Consensus
No.93-14, "Accounting for Multiple-Year Retrospectively Rated Insurance
Contracts," requires accrual of retrospective premium adjustments when the
insured has an obligation to pay cash to the insurer that would not have been
required absent experience under the contract. The cumulative effect of this
change in accounting principle determined as of January 1, 1993, decreased net
income by $6 million, net of $3 million income tax effect.
In 1992, USX adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS No.106), and Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109). The cumulative effect of these
changes in accounting principles decreased first quarter 1992 net income by
$1.306 billion, net of $764 million income tax effect, for SFAS No. 106 and
$360 million for SFAS No.109.
Pretax income (loss) in 1993 included a $506 million charge ($127 million
credit in the fourth quarter) related to an adverse decision in the Lower Lake
Erie Iron Ore Antitrust Litigation against a former USX subsidiary, the
Bessemer & Lake Erie Railroad. Charges of $342 million were included in
operating costs ($96 million credit in the fourth quarter) and $164 million
included in net interest and other financial costs ($31 million credit in the
fourth quarter). The effect on 1993 net income (loss) was $325 million
unfavorable ($5.04 per share of Steel Stock) for 1993.
Changes in the inventory market valuation reserve resulted in a $241 million
charge against operating income in 1993 ($187 million charge in the fourth
quarter) and a $62 million credit to operating income in 1992 ($98 million
charge in the fourth quarter).
Operating income in the fourth quarter of 1993 included a restructuring charge
of $42 million for the planned permanent closure of a Pennsylvania coal mine.
In 1992, operating income included restructuring charges of $125 million ($10
million in the fourth quarter).
Pretax income (loss) in 1992 included the settlement of a production tax refund
claim for the years 1982 through 1985. The refund resulted in credits to
operating income of $119 million and interest income of $177 million in the
second quarter of 1992.
<PAGE> 13
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Other income in 1993 included pretax gains of $253 million from disposal of
assets ($102 million in the fourth quarter), primarily related to the sale of
the Cumberland Coal Mine, an investment in an insurance company and the fourth
quarter gain from the realization of proceeds from a subordinated note related
to the 1988 sale of Transtar, Inc. The collection of the Transtar note also
resulted in $37 million of interest income. Other income in 1992 included a
$19 million charge for impairment of a 25% interest in a natural gas
transmission partnership.
The provision for estimated U.S. and foreign income taxes for interim periods
is based on tax rates and amounts which recognize management's best estimate of
current and deferred tax assets and liabilities. The 1993 U.S. income tax
provision included a credit of $64 million related to recognition of additional
future U.S. income tax benefits for deferred foreign income taxes. This
favorable adjustment results from USX's ability to elect to credit, rather than
deduct, foreign income taxes for U.S. federal income tax purposes in future
periods. The U.S. income tax provision for 1993 also included a $24 million
charge associated with an increase in the federal income tax rate from 34% to
35%, reflecting remeasurement of deferred income tax liabilities as of January
1, 1993. Adjustments to the fourth quarter 1993 tax provision relate primarily
to prior years' Internal Revenue Service examinations and the establishment of
valuation allowances for certain tax credits which USX is not expected to be
able to fully utilize.
In 1993, USX sold 10,000,000 shares of Steel Stock to the public for net
proceeds of $350 million.
In 1993, USX also sold 6,900,000 shares of 6.50% Cumulative Convertible
Preferred Stock (stated value of $1.00 per share; initial liquidation
preference of $50 per share) to the public for net proceeds of $336 million.
The Convertible Preferred Stock is convertible at any time into shares of Steel
Stock at a conversion price of $46.125 per share of Steel Stock.
On October 2, 1992, USX sold the initial 9,000,000 shares of Delhi Stock to the
public. Net income and dividends per share applicable to outstanding Delhi
Stock are presented for the periods subsequent to October 2, 1992.
The numbers of shares used in the computation of earnings per share were as
follows:
<TABLE>
<CAPTION>
(In Thousands)
--------------------------------------
Fourth Quarter Ended Year Ended
December 31 December 31
-------------------- ----------------
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
Marathon Stock - primary.......... 286,582 286,276 286,594 283,494
- fully diluted.... 286,582 286,276 286,594 283,495
Steel Stock - primary............. 70,311 59,551 64,370 55,764
- fully diluted... 81,233 59,551 64,370 55,764
Delhi Stock - primary and fully
- diluted........... 9,155 9,001 9,067
</TABLE>
January 21, 1994
