<PAGE>
Rule 424(b)(2)
PROSPECTUS SUPPLEMENT Registration No. 033-51621
(To Prospectus dated January 6, 1994)
$300,000,000
USX CORPORATION
7.20% NOTES DUE 2004
The Notes will mature on February 15, 2004. Interest is payable semiannually,
on February 15 and August 15, commencing August 15, 1994. The Notes are not
redeemable prior to maturity.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH
IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Note................................ 99.786% .650% 99.136%
Total................................... $299,358,000 $1,950,000 $297,408,000
</TABLE>
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from February 7, 1994.
(2) Before deducting expenses payable by the Company estimated at $100,000.
The Notes are offered subject to receipt and acceptance by the Underwriters, to
prior sale and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Notes will be made through the facilities of The
Depository Trust Company, on or about February 7, 1994.
SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
The date of this Prospectus Supplement is January 31, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
USX CORPORATION
The following discussion is a brief description of USX Corporation ("USX" or
the "Company") and is qualified in its entirety by reference to the documents
incorporated herein under "Incorporation of Certain Documents by Reference" in
the accompanying Prospectus. Readers of this Prospectus Supplement are
encouraged to refer to such incorporated documents for a more complete
description of the Company.
USX is a diversified company engaged in the energy business through its
Marathon Group, in the steel business through its U.S. Steel Group and in the
gas gathering and processing business through its Delhi Group.
. The Marathon Group includes the operations of Marathon Oil Company, a wholly
owned subsidiary of USX, which is engaged in worldwide crude oil and natural
gas exploration, production and transportation, and domestic refining,
marketing and transportation of crude oil and petroleum products. Marathon
Group sales (excluding sales from operations now included in the Delhi
Group) as a percentage of total USX consolidated sales were 66% in 1993, 69%
in 1992, and 72% in 1991.
. The U.S. Steel Group includes U.S. Steel, one of the largest integrated
steel producers in the United States, which is primarily engaged in the
production and sale of a wide range of steel mill products, coke, and
taconite pellets. The U.S. Steel Group also includes the management of
mineral resources, domestic coal mining, engineering and consulting services
and technology licensing. Other businesses that are part of the U.S. Steel
Group include real estate development and management, fencing products,
leasing and financing activities and a majority interest in a titanium metal
products company. U.S. Steel Group sales as a percentage of total USX
consolidated sales were 31% in 1993, 28% in 1992 and 26% in 1991.
. The Delhi Group includes Delhi Gas Pipeline Corporation and certain related
companies which are engaged in the purchasing, gathering, processing,
transporting and marketing of natural gas. Prior to creation of the Delhi
Group on October 2, 1992, these businesses were included in the Marathon
Group. Sales from the businesses included in the Delhi Group as a percentage
of total USX consolidated sales were 3% in each of 1993 and 1992 and 2% in
1991.
USX has three classes of common stock: USX-Marathon Group Common Stock
("Marathon Stock"), USX-U.S. Steel Group Common Stock ("Steel Stock") and USX-
Delhi Group Stock ("Delhi Stock"). Each class of stock is intended to provide
the stockholders of such class with a separate equity security reflecting the
performance of the related group.
A portion of USX's corporate assets and liabilities are attributed to each of
the Marathon Group, the U.S. Steel Group and the Delhi Group. Although the
financial statements of the Marathon Group, the U.S. Steel Group and the Delhi
Group separately report the assets, liabilities (including contingent
liabilities) and stockholders' equity of USX attributed to each such group,
such attribution does not affect legal title to such assets or responsibility
for such liabilities. Holders of Marathon Stock, Steel Stock and Delhi Stock
are stockholders of USX and continue to be subject to all of the risks
associated with an investment in USX and all of its businesses and liabilities.
The Notes will be obligations of USX and not of any segment, group or
subsidiary of USX.
S-2
<PAGE>
Set forth below is a three-year summary of financial highlights for the
groups.
<TABLE>
<CAPTION>
OPERATING
INCOME ASSETS
SALES (LOSS) (A) (AT YEAR-END)
------- ---------- --------------
<S> <C> <C> <C>
MARATHON GROUP (B) (MILLIONS)
1993........................................ $11,962 $ 169 $10,805
1992........................................ 12,782 304 11,141
1991........................................ 13,975 358 11,644
U.S. STEEL GROUP
1993........................................ 5,612 (149) 6,563
1992........................................ 4,919 (241) 6,251
1991........................................ 4,864 (617) 5,627
DELHI GROUP (C)
1993........................................ 535 36 580
1992........................................ 458 33 565
1991........................................ 423 31 584
ELIMINATIONS
1993........................................ (45) -- (628)
1992........................................ (346) (26) (705)
1991........................................ (437) (31) (816)
TOTAL USX CORPORATION
1993........................................ $18,064 $ 56 $17,320
1992........................................ 17,813 70 17,252
1991........................................ 18,825 (259) 17,039
</TABLE>
- ------
(a) Operating income included the following: a $342 million charge related to
the adverse decision in the B&LE litigation for the U.S. Steel Group in
1993; restructuring charges of $42 million for the U.S. Steel Group in
1993; restructuring charges of $115 million for the Marathon Group and $10
million for the U.S. Steel Group in 1992; restructuring charges of $24
million for the Marathon Group and $402 million for the U.S. Steel Group in
1991; and inventory market valuation charges (credits) for the Marathon
Group of $241 million, $(62) million and $260 million in 1993, 1992 and
1991, respectively.
(b) Includes sales and operating income for the businesses comprising the Delhi
Group for periods prior to October 2, 1992, and identifiable assets related
to the businesses comprising the Delhi Group for year-end 1991.
(c) Includes historic sales, operating income and identifiable assets for the
businesses included in the Delhi Group which, prior to October 2, 1992,
were included in the Marathon Group.
USE OF PROCEEDS
USX will use the net proceeds of the offering of the Notes for general
corporate purposes, including the refunding of outstanding indebtedness and
other financial obligations. As of December 31, 1993, USX had long-term debt
obligations maturing within one year of $734 million, including $699 million of
Marathon 9 1/2% Guaranteed Notes Due March 1, 1994.
S-3
<PAGE>
USX CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information has been derived
from the consolidated financial statements of USX for each of the five years in
the period ended December 31, 1993. The information set forth below should be
read in connection with the USX consolidated financial statements and notes
thereto and accompanying "Management's Discussion and Analysis" contained in
the USX Annual Report on Form 10-K for the year ended December 31, 1992,
incorporated herein by reference. The data for the year ended December 31,
1993, have been derived from unaudited financial statements which, in the
opinion of management, reflect all adjustments necessary to a fair statement of
results for the periods covered. All such adjustments are of a normal recurring
nature except as described herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:(A)
Sales....................... $18,064 $17,813 $18,825 $20,659 $18,717
Operating income (loss)(b).. 56 70 (259) 1,556 1,570
Operating costs include:
Depreciation, depletion
and amortization.......... 1,077 1,091 1,128 1,304 1,336
Inventory market valuation
charges (credits)......... 241 (62) 260 (140) (145)
Restructuring charges...... 42 125 426 -- --
B&LE litigation charge(c).. 342 -- -- -- --
Other income (loss)......... 257 (2) 39 37 406
Other income (loss)
includes:
Gain on disposal of
assets.................... 253 24 30 7 370
Total income (loss) before
income taxes and cumulative
effect of changes in
accounting
principles(b)(c)........... (239) (189) (691) 1,216 1,358
Total income (loss) before
cumulative effect of
changes in accounting
principles................. (167) (160) (578) 818 965
Net income (loss) before
preferred dividends........ $ (259) $(1,826) $ (578) $ 818 $ 965
Dividends on preferred
stock...................... (27) (9) (9) (18) (58)
-------- -------- -------- -------- --------
Net income (loss) applicable
to common stocks(d)(e)..... $ (286) $(1,835) $ (587) $ 800 $ 907
======== ======== ======== ======== ========
BALANCE SHEET DATA (AT PERIOD
END):(A)(F)
Cash and cash equivalents... $ 268 $ 57 $ 279 $ 263 $ 786
Working capital(c)(g)....... (154) (370) (215) 351 273
Capital expenditures........ 1,151 1,505 1,392 1,391 1,429
Property, plant and
equipment--net............. 11,603 11,759 11,593 11,584 11,995
Total assets................ 17,320 17,252 17,039 17,268 17,500
Capitalization:
Notes payable............... $ 1 $ 47 $ 79 $ 138 $ 16
Total long-term debt(h)..... 5,923 6,302 6,438 5,527 5,875
Total proceeds from
production agreements...... -- -- 17 142 327
Minority interest........... 5 16 37 67 --
Stockholders' equity(i)..... 3,864 3,709 4,987 5,869 5,737
-------- -------- -------- -------- --------
Total capitalization...... $ 9,793 $10,074 $11,558 $11,743 $11,955
======== ======== ======== ======== ========
</TABLE>
THE FOOTNOTES BELOW AND ON THE FOLLOWING FOUR PAGES ARE AN INTEGRAL PART OF
THIS INFORMATION.
- --------
(a) USX follows the successful efforts method of accounting for oil and gas
exploration and development.
(b) Pretax income in 1992 included a settlement of a production tax refund
claim for the years 1982 through 1985. The refund resulted in a credit to
operating income of $119 million as well as interest income of $177
million.
(c) Pretax income (loss) in 1993 included a $506 million charge related to the
adverse decision in the Lower Lake Erie Iron Ore Antitrust Litigation
against the B&LE. Charges of $342 million were included in operating costs
and $164 million included in interest and other financial costs. The effect
on net income (loss) was $325 million unfavorable.
S-4
<PAGE>
(d) The provision for estimated U.S. and foreign income taxes for the periods
reported 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 and reflects expected
improvement in Marathon's international production. 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 federal income tax liabilities as of January 1,
1993.
(e) In 1993, USX adopted Statement of Financial Accounting Standards No. 112--
Employers' Accounting for Postemployment Benefits ("SFAS 112") which
requires employers to recognize the obligation to provide postemployment
benefits on an accrual basis if certain conditions are met. The cumulative
effect of the change in accounting principle determined as of January 1,
1993, reduced net income $86 million, net of $50 million income tax effect.
The effect of the change in accounting principle on 1993 operating income
was $23 million unfavorable.
In 1993, USX also adopted Emerging Issues Task Force Consensus No. 93-14,
Accounting for Multiple-Year Retrospectively Rated Insurance Contracts"
("EITF 93-14"). EITF 93-14 requires accrual of retrospective premium
adjustments when the insured has an obligation to pay cash to the insurer
that would have not been required absent experience under the contract. The
cumulative effect of the change in accounting principle determined as of
January 1, 1993, reduced net income $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
106") and Statement of Financial Accounting Standards No. 109-- Accounting
for Income Taxes ("SFAS 109"). The cumulative effect of these changes in
accounting principles decreased first quarter 1992 net income by $1,306
million, net of $764 million income taxes, for SFAS 106; and $360 million
for SFAS 109.
(f) USX is the subject of, or party to, a number of pending or threatened legal
actions, contingencies and commitments involving a variety of matters,
including laws and regulations relating to the environment. Certain of
these matters are discussed below. The ultimate resolution of these
contingencies could, individually or in the aggregate, be material to the
consolidated financial statements. However, management believes that USX
will remain a viable and competitive enterprise even though it is possible
that these contingencies could be resolved unfavorably. See "USX
Corporation--Analysis of Selected Consolidated Financial Information--
Liquidity and Capital Resources" herein.
LEGAL PROCEEDINGS--
B&LE Litigation--MDL-587
On January 24, 1994, the U.S. Supreme Court denied a Petition for Writ of
Certiorari by the Bessemer and Lake Erie Railroad (the "B&LE") in the Lower
Lake Erie Iron Ore Antitrust Litigation ("MDL-587"). As a result, the
decision of the U.S. Court of Appeals for the Third Circuit affirming
judgements of approximately $498 million, plus interest, relating to
antitrust violations by the B&LE was permitted to stand. In addition, the
Third Circuit decision remanded the claims of two plantiffs for retrial of
their damage awards. At trial these plaintiffs asserted claims of
approximately $8 million, but were awarded only nominal damages by the
jury.
The B&LE was a wholly owned subsidiary of USX throughout the period the
conduct occurred. It is now a subsidiary of Transtar in which USX has a 45%
equity interest. These actions were excluded liabilities in the sale of
USX's transportation units in 1988, and USX is obligated to reimburse
Transtar for judgements paid by B&LE.
Following the Court of Appeals decision, USX, which had previously
accrued $90 million on a pretax basis for this litigation, charged an
additional amount of $619 million on a pretax basis against the results of
the U.S. Steel Group in the second quarter of 1993. In late 1993, USX and
LTV Steel
S-5
<PAGE>
Corp. ("LTV"), one of the plantiffs in MDL-587, agreed to settle all of
LTV's claims in that action for $375 million. USX's potential liability in
the LTV portion of the case was estimated to be in excess of $500 million
at year end 1993. USX made a payment of $200 million on December 29, 1993
and is obligated to pay an additional $175 million not later than February
28, 1994. Claims of three additional plantiffs were also settled in
December 1993. These settlements resulted in a pretax credit of $127
million in the fourth quarter financial results of the U.S. Steel Group. As
a result of the denial of the Petition for Writ of Certiorari, judgments
for the remaining MDL-587 plaintiffs (other than the two remanded for
retrial), totaling approximately $210 million, including post-judgment
interest, are due for payment in the first quarter of 1994.
B&LE Litigation--Armco
In June 1990, following judgments entered on behalf of steel company
plaintiffs in MDL-587, Armco Steel filed federal antitrust claims against
the B&LE and other railroads in the Federal District Court for the District
of Columbia. B&LE successfully challenged the actions for lack of
jurisdiction and venue, and the case was transferred to the Federal
District Court for the Northern District of Ohio. Other defendant railroads
settled with Armco, leaving B&LE the only remaining defendant. On April 7,
1993, B&LE's motion to dismiss the federal antitrust claims on grounds of
statute of limitations was granted. Subsequently, Armco refiled its claims
under the Ohio Valentine Act in the Butler County Court of Common Pleas.
B&LE's motions for summary judgment on time bar issues and for change of
venue to another Ohio county are pending, and not yet fully briefed. No
discovery has been taken on the merits of Armco's claims, but if Armco
survives the present and possibly further pretrial motions and the case
proceeds to trial on the merits, Armco's claimed damages are likely to be
substantial. There is a dispute whether the Armco case was an excluded
liability in the sale of USX's transportation units and whether USX is
obligated to reimburse Transtar for a judgment in this case.
Energy Buyers Litigation
On December 21, 1992, an arbitrator issued an award for approximately
$117 million, plus interest under Ohio law, against USX in Energy Buyers
Service Corporation v. USX Corporation, a case originally filed in the
District Court of Harris County, Texas. Such amount was fully accrued as of
December 31, 1992. On December 15, 1993, USX agreed to settle all claims in
the case for $95 million and deferred payments of up to $9 million.
ENVIRONMENTAL MATTERS--
USX is subject to federal, state, local and foreign laws and regulations
relating to the environment. These laws generally provide for control of
pollutants released into the environment and require responsible parties to
undertake remediation of waste disposal sites. Penalties may be imposed for
noncompliance. USX provides for remediation costs and penalties when the
responsibility to remediate is probable and the amount of associated costs
is reasonably determinable. At December 31, 1993 and December 31, 1992,
accrued liabilities for remediation, platform abandonment and mine
reclamation totaled $312 million and $280 million, respectively. It is not
presently possible to estimate the ultimate amount of all remediation costs
that might be incurred or the penalties that may be imposed.
For a number of years, USX has made substantial capital expenditures to
bring existing facilities into compliance with various laws relating to the
environment. In 1993 and 1992, such capital expenditures for environmental
controls totaled $181 million and $294 million, respectively. USX
anticipates making additional such expenditures in the future; however, the
exact amounts and timing of such expenditures are uncertain because of the
continuing evolution of specific regulatory requirements.
LIBYAN OPERATIONS--
By reason of Executive Orders and related regulations under which the U.S.
Government is continuing economic sanctions against Libya, Marathon was
required to discontinue performing its Libyan petroleum contracts on June
30, 1986. In June 1989, the Department of the Treasury authorized Marathon
to resume performing under those contracts. Pursuant to that authorization,
Marathon has
S-6
<PAGE>
engaged the Libyan National Oil Company and the Secretary of Petroleum in
continuing negotiations to determine when and on what basis they are
willing to allow Marathon to resume realizing revenue from Marathon's
investment of $108 million in Libya. Marathon is uncertain when these
negotiations can be completed or how the negotiations will be affected by
the United Nations' sanctions against Libya.
GUARANTEES--
Guarantees by USX of the liabilities of affiliated and other entities
totaled $227 million at December 31, 1993. In the event that any defaults
of guaranteed liabilities occur, USX has access to its interest in the
assets of most of the affiliates to reduce losses resulting from these
guarantees. At December 31, 1993, the largest guarantee for a single
affiliate was $96 million.
At December 31, 1993, Marathon's pro rata share of obligations of LOOP INC.
and various pipeline affiliates secured by throughput and deficiency
agreements totaled $206 million. Under the agreements, Marathon is required
to advance funds if the affiliates are unable to service debt. Any such
advances are prepayments of future transportation charges.
COMMITMENTS--
At December 31, 1993, and December 31, 1992, contract commitments for
capital expenditures for property, plant and equipment totaled $389 million
and $423 million, respectively.
(g) USX has entered into agreements to sell certain accounts receivable subject
to limited recourse. Payments are collected from the sold accounts
receivable; the collections are reinvested in new accounts receivable for
the buyers; and a yield based on defined short-term market rates is
transferred to the buyers. At December 31, 1993, the balance of sold
accounts receivable that had not been collected was $740 million. Buyers
have collection rights to recover payments from an amount of outstanding
receivables equal to 120% of the outstanding receivables purchased on a
nonrecourse basis; such overcollateralization cannot exceed $150 million.
In the event of a change in control of USX, as defined in the agreements,
USX may be required to forward all payments collected on sold accounts
receivable to the buyers.
Prior to 1993, USX Credit, a Division of USX, sold certain of its loans
receivable subject to limited recourse. USX Credit continues to collect
payments from the loans and transfer to the buyers principal collected plus
yield based on defined short-term market rates. At December 31, 1993, the
balance of sold loans receivable subject to recourse was $205 million. At
December 31, 1993, USX Credit had outstanding loan commitments of $29
million. USX Credit is not actively making new loan commitments. In the
event of a change in control of USX, as defined in the agreement, USX may
be required to provide cash collateral in the amount of the uncollected
loans receivable to assure compliance with the limited recourse provisions.
(h) At December 31, 1993, USX had outstanding borrowings of $500 million
against credit agreements, leaving $1,675 million of available unused
committed credit lines. In addition, USX had $185 million of available
unused short-term lines of credit, which generally require maintenance of
compensating balances. At December 31, 1993, certain long-term debt due
within one year of $699 million was included in long-term debt, since
unused long-term credit agreements of $1,500 million were available for
refinancing if needed.
(i) In January 1994, USX sold 5,000,000 shares of Steel Stock to the public for
net proceeds of $201 million. In 1993, USX sold 10,000,000 shares of Steel
Stock to the public for net proceeds of $350 million. In 1992, USX sold
8,050,000 shares of Steel Stock to the public for net proceeds of $198
million, 25,000,000 shares of Marathon Stock to the public for net proceeds
of $541 million and 9,000,000 shares of Delhi Stock in its initial public
offering for net proceeds of $136 million.
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
$50.00 per share) ("6.50% Covertible Preferred") to the public for net
proceeds of $336 million. The 6.50% Convertible Preferred is convertible at
any time, at the option of the holder, into shares of Steel Stock at a
conversion price of $46.125 per share of Steel Stock, subject to adjustment
in certain circumstances. On and after April 1, 1996, this stock is
S-7
<PAGE>
redeemable, at USX's sole option, at a price of $52.275 per share, and
thereafter at prices declining annually on each April 1 to an amount equal
to $50.00 per share on and after April 1, 2003.
RATIOS OF EARNINGS TO FIXED CHARGES (UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..................... (a) (a) (a) 2.80 2.57
=== === === ==== ====
</TABLE>
- --------
(a) Earnings did not cover fixed charges by $281 million for 1993, $197 million
for 1992 and by $681 million for 1991.
S-8
<PAGE>
USX CORPORATION
ANALYSIS OF SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following analysis is a condensation of, and should be read in connection
with, the information presented in the financial statements and related notes
and Management's Discussion and Analysis of each of the Marathon Group, the
U.S. Steel Group, the Delhi Group and USX in the USX Annual Report on Form 10-K
for the year ended December 31, 1992, incorporated herein by reference.
Historical amounts relating to the businesses comprising the Delhi Group are
included in the data presented for the Marathon Group for periods prior to
October 2, 1992.
RESULTS OF OPERATIONS
SALES
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------------
1993 1992 1991
------- ------- -------
(MILLIONS)
<S> <C> <C> <C>
Marathon Group.................................... $11,962 $12,782 $13,975
U.S. Steel Group.................................. 5,612 4,919 4,864
Delhi Group....................................... 535 458 423
Eliminations...................................... (45) (346) (437)
------- ------- -------
Total USX....................................... $18,064 $17,813 $18,825
======= ======= =======
</TABLE>
Sales were $18.1 billion in 1993, compared with $17.8 billion in 1992 and
$18.8 billion in 1991. The increase in 1993 primarily reflected increased sales
for the U.S. Steel Group due mainly to higher steel shipment volumes and
prices, and increased commercial shipments of taconite pellets and coke. These
were partially offset by lower sales for the Marathon Group (excluding the
effect of the businesses of the Delhi Group which were included in the Marathon
Group for periods prior to October 2, 1992) due mainly to lower worldwide
liquid hydrocarbon volumes and prices and lower average refined product prices,
partially offset by increased excise taxes (which have no effect on income) and
higher refined product sales volumes (excluding matching buy/sell
transactions). The decrease from 1991 to 1992 primarily reflected reduced sales
for the Marathon Group due mainly to lower average refined product prices,
reduced volumes and prices for crude oil matching buy/sell transactions (which
have no effect on income) and lower worldwide liquid hydrocarbon volumes.
OPERATING INCOME (LOSS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------
1993 1992 1991
----- ----- -----
(MILLIONS)
<S> <C> <C> <C>
Marathon Group.......................................... $ 169 $ 304 $ 358
U.S. Steel Group........................................ (149) (241) (617)
Delhi Group............................................. 36 33 31
Eliminations............................................ -- (26) (31)
----- ----- -----
Total USX............................................. $ 56 $ 70 $(259)
===== ===== =====
</TABLE>
Operating income decreased by $14 million in 1993, following a $329 million
improvement in 1992. Results in 1993 included a $342 million charge as a result
of the adverse decision in the B&LE litigation (which also resulted in $164
million of interest costs) (See footnote (f) to "USX Corporation--Selected
Consolidated Financial Information."), a $241 million unfavorable noncash
effect resulting from an increase in the inventory market valuation reserve and
restructuring charges of $42 million related
S-9
<PAGE>
to the planned shutdown of the Maple Creek coal mine and preparation plant.
Results in 1992 included a favorable impact of $119 million for the settlement
of a tax refund claim related to prior years' production taxes and a $62
million favorable noncash effect resulting from a decrease in the inventory
market valuation reserve, partially offset by restructuring charges of $125
million primarily related to the disposition of certain domestic exploration
and production properties. Excluding the effects of these items, operating
income increased $667 million in 1993 predominantly due to improved results in
the U.S. Steel Group, as well as the Marathon Group. The adoption of SFAS 112
resulted in a $23 million increase in operating costs in 1993, principally in
the U.S. Steel Group.
Operating income in 1991 included restructuring charges of $426 million
mainly related to the closure of certain steel facilities and a $260 million
unfavorable noncash effect resulting from an increase in the inventory market
valuation reserve, partially offset by a favorable $20 million adjustment of
prior years' production tax accruals. Excluding the effects of these items and
the 1992 special items previously discussed, operating income declined $393
million from 1991 to 1992 due mainly to lower results in the Marathon Group.
Contributing to the decline was a $58 million increase in operating costs
resulting from the 1992 adoption of SFAS 106, $42 million in the U.S. Steel
Group and $16 million in the Marathon Group.
Net pension credits included in operating income totaled $211 million in
1993, compared with $260 million in 1992 and $224 million in 1991. The decrease
in 1993 was primarily due to a lower assumed long-term rate of return on plan
assets. The increase in 1992 from 1991 primarily reflected recognition of the
growth in plan assets. In 1994, net pension credits are expected to decline by
approximately $80 to $90 million primarily due to a further reduction in the
assumed long-term rate of return on plan assets.
Other income was $257 million in 1993, compared with a loss of $2 million in
1992 and income of $39 million in 1991. The increase in 1993 primarily resulted
from higher gains from the disposal of assets, including the sale of the
Cumberland coal mine, the realization of a $70 million deferred gain resulting
from the collection of a subordinated note related to the 1988 sale of Transtar
(which also resulted in $37 million of interest income) and the sale of an
investment in an insurance company. The increase in 1993 also reflected the
absence of a $19 million impairment of an investment recorded in 1992. The
decline in 1992 relative to 1991 primarily resulted from the nonrecurrence of
1991's favorable minority interest effect related to RMI and the $19 million
impairment of an investment in 1992.
Interest and other financial income was $78 million in 1993, compared with
$228 million in 1992 and $38 million in 1991. The 1993 amount included $37
million of interest income resulting from collection of the Transtar note. The
1992 amount included $177 million of interest income resulting from the
settlement of a tax refund claim related to prior years' production taxes.
Excluding these items, interest and other financial income was $41 million in
1993, compared with $51 million in 1992 and $38 million in 1991.
Interest and other financial costs were $630 million in 1993, compared with
$485 million in 1992 and $509 million in 1991. The 1993 amount included $164
million of interest expense related to the adverse decision in the B&LE
litigation. Excluding this amount, the decrease in 1993 primarily reflected an
increase in capitalized interest. The 1991 amount included a $26 million
favorable adjustment related to interest accrued for prior years' production
taxes. Excluding this item, the decrease from 1991 to 1992 was mainly due to
the favorable effect of declining variable interest rates.
The net credit for estimated income taxes in 1993 was $72 million, compared
with credits of $29 million in 1992 and $113 million in 1991. 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, certain foreign income taxes for U.S. federal income tax purposes
in future periods. The anticipated use of the U.S. foreign tax credit reflects
Marathon's improving international production profile including income which
will be generated by the East Brae platform in the United Kingdom sector of the
North Sea. 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 federal income tax liabilities as of
January 1, 1993.
S-10
<PAGE>
The total loss before cumulative effect of changes in accounting principles
was $167 million in 1993, compared with a loss of $160 million in 1992 and a
loss of $578 million in 1991.
The unfavorable cumulative effect of changes in accounting principles
totaled $92 million in 1993 and $1,666 million in 1992. The cumulative effect
of adopting SFAS 112, determined as of January 1, 1993, decreased 1993 income
by $86 million, net of the income tax effect. The cumulative effect of
adopting EITF 93-14, determined as of January 1, 1993, decreased 1993 income
by $6 million, net of the income tax effect. The immediate recognition of the
transition obligation resulting from the adoption of SFAS 106, measured as of
January 1, 1992, decreased 1992 income by $1,306 million, net of the income
tax effect. The cumulative effect of adopting SFAS 109, measured as of January
1, 1992, decreased 1992 net income by $360 million.
USX recorded a net loss of $259 million in 1993, compared with a net loss of
$1,826 million in 1992 and a net loss of $578 million in 1991.
OPERATING RESULTS BY GROUP
Marathon Group
The Marathon Group had operating income of $169 million in 1993, compared
with $304 million in 1992 and $358 million in 1991. Results for 1993 and 1991
were adversely affected, while 1992 was favorably impacted, by special items.
Results included a $241 million unfavorable effect in 1993, a $62 million
favorable effect in 1992 and a $260 million unfavorable effect in 1991
resulting from noncash adjustments to the inventory market valuation reserve.
The 1992 results also included a favorable impact of $119 million for the
settlement of a tax refund claim related to prior years' production taxes,
partially offset by a $115 million restructuring charge related to the
disposition of certain domestic exploration and production properties. The
1991 results also included a $24 million restructuring charge, partially
offset by a favorable $20 million adjustment of prior years' production tax
accruals. Excluding the effects of these special items, operating income was
$410 million in 1993, $238 million in 1992 and $622 million in 1991. The
increase in 1993 primarily reflected increased average refined product margins
and increased domestic natural gas prices, partially offset by lower worldwide
liquid hydrocarbon prices and volumes. The decrease in 1992 predominantly
reflected lower average refined product margins, as well as reduced worldwide
liquid hydrocarbon prices and volumes and a decrease in international natural
gas prices.
S-11
<PAGE>
OPERATING INCOME (LOSS)
<TABLE>
<CAPTION>
1993 1992* 1991*
------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Exploration and Production ("Upstream")
Domestic........................................... $ 117 $ 123 $ 104
International...................................... (37) 49 156
------- ------ -------
Total Exploration & Production................... 80 172 260
Refining, Marketing and Transportation ("Down-
stream")............................................ 407 128 422
Gas Gathering and Processing......................... -- 21 30
Other Administrative................................. (77) (83) (90)
Special Items........................................ (241) 66 (264)
------- ------ -------
Total............................................ $ 169 $ 304 $ 358
======= ====== =======
</TABLE>
- --------
* Certain reclassifications have been made to conform to 1993 classifications.
Gas Gathering and Processing results decreased in 1993 due to the exclusion
of the businesses now in the Delhi Group.
AVERAGE VOLUMES AND SELLING PRICES
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
(THOUSANDS OF BARRELS PER DAY)
<S> <C> <C> <C>
Net Liquids Production*--U.S. ................. 111 118 127
- --International................................ 45 56 68
---------- ---------- ----------
- --Total Consolidated 156 174 195
<CAPTION>
(MILLIONS OF CUBIC FEET PER DAY)
<S> <C> <C> <C>
Net Natural Gas Production--U.S. .............. 529 593 689
- --International................................ 373 338 336
---------- ---------- ----------
- --Total Consolidated 902 931 1,025
<CAPTION>
(DOLLARS PER BARREL)
<S> <C> <C> <C>
Liquid Hydrocarbons*--U.S. .................... $14.54 $16.47 $17.43
- --International................................ 16.22 18.95 19.38
<CAPTION>
(DOLLARS PER MCF)
<S> <C> <C> <C>
Natural Gas--U.S. ............................. $1.94 $1.60 $1.57
- --International................................ 1.52 1.77 2.18
</TABLE>
- --------
* Includes Crude Oil, Condensate and Natural Gas Liquids.
Upstream operating income decreased $92 million in 1993, following an $88
million decrease in 1992. Operating income in 1992 included a $20 million gain
recognized as a result of a settlement of a natural gas contract. Excluding
this settlement, the decline in 1993 was mainly due to significant decreases in
worldwide liquid hydrocarbon prices and volumes and lower international natural
gas prices, partially offset by increased domestic natural gas prices. The
decline in 1992, excluding this contract settlement, was also primarily caused
by decreases in worldwide liquid hydrocarbon prices and volumes and lower
international natural gas prices, partially offset by ongoing cost reduction
efforts.
Domestic upstream operating income in 1993 declined $6 million from 1992,
following a $19 million increase in 1992 from 1991. Excluding the previously
mentioned contract settlement, the 14% increase in 1993 was primarily due to
increased natural gas prices and reduced dry well expenses, partially offset by
reduced liquid hydrocarbon prices and volumes. In addition, operating income in
1993 reflected ongoing cost reduction efforts and reduced depletion expenses.
The results in 1992, excluding the previously mentioned contract settlement,
remained level with 1991, as ongoing cost reduction efforts and reduced
exploration expenses were offset by lower liquid hydrocarbon prices.
S-12
<PAGE>
International upstream operating income declined $86 million in 1993,
following a $107 million decline in 1992. Natural gas prices have declined 30%
since 1991, primarily reflecting changes in contract sales prices in Norway.
The decrease in 1993 was primarily due to lower liquid hydrocarbon prices,
reduced liftings primarily from the United Kingdom sector of the North Sea as a
result of natural production declines, lower natural gas prices, and a $17
million charge for the relinquishment of the Marathon Group's interest in the
Arzanah Oil Field, Abu Dhabi. This decrease was partially offset by reduced
pipeline and terminal expenses and reduced dry well expenses. The decrease in
1992 was primarily due to lower natural gas prices, lower liquid hydrocarbon
liftings and increased dry well expenses.
In December 1993, the East Brae Field in the U.K. North Sea was brought
onstream. East Brae liquids production is expected to peak at 40,000 net
barrels per day in the fourth quarter of 1994. Worldwide liquid volumes are
expected to increase approximately 15% in 1994, reflecting a full year of East
Brae production, which should continue to contribute to increased volumes in
1995. Worldwide natural gas volumes are expected to increase approximately 5%
in 1994, reflecting the start of Brae area gas sales in October 1994. The 1995
volumes are expected to continue to increase reflecting a full year of Brae
area production.
In 1992, Marathon and its partners finalized and delivered a feasibility
study to the Russian Government assessing the technical and economic viability
of developing fields offshore Sakhalin Island. After positive review by the
State Expertise Commission in 1993, negotiations to sign a production sharing
contract are currently being held among the Russian Government and
representatives of the consortium.
Downstream operating income increased $279 million in 1993, after decreasing
$294 million in 1992. The increase in 1993 was primarily due to increased
average refined product margins from refining and wholesale marketing which
nearly doubled since 1992 as a result of decreased crude oil costs and lower
maintenance costs for refinery turnaround activities, partially offset by
decreased average refined product prices. Also contributing to the increase in
operating income were record margins in both refined products and convenience
store merchandise experienced by Emro Marketing Company, a Marathon subsidiary.
Downstream operating income in 1993 also included a $17 million charge for
future environmental remediation. The decrease in 1992 was chiefly the result
of lower average refined product margins which were adversely impacted as
declines in refined product sales prices exceeded decreases in raw material
costs. Results in 1992 were also negatively affected by increased maintenance
costs as a result of refinery turnaround activities.
Other Administrative expenses were $77 million in 1993, compared to $83
million in 1992 and $90 million in 1991. These costs include the portion of the
Marathon Group'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.
The outlook regarding prices and costs for the Marathon Group's principal
products is largely dependent upon world market developments for crude oil and
refined products. Market conditions in the petroleum industry are cyclical and
subject to global economics and events such as the 1993 OPEC accord, winter oil
and natural gas consumption and resumption of Iraqi production.
U.S. Steel Group
The U.S. Steel Group reported an operating loss of $149 million in 1993
compared with operating losses of $241 million in 1992 and $617 million in
1991. The operating loss for 1993 included a $342 million charge as a result of
the adverse decision in the B&LE litigation (which also resulted in $164
million of interest costs). See footnote (f) to "USX Corporation--Selected
Consolidated Financial Information." The 1993, 1992, and 1991 operating losses
included restructuring charges of $42 million, $10 million, and $402 million,
respectively, which are discussed below.
S-13
<PAGE>
OPERATING INCOME (LOSS)
<TABLE>
<CAPTION>
1993 1992* 1991*
----- ----- -----
<S> <C> <C> <C>
(DOLLARS IN
MILLIONS)
Steel and Related Businesses............................... $ 123 $(140) $(235)
Other Businesses........................................... (29) (96) (30)
Other Administrative....................................... 141 5 50
B&LE litigation charge..................................... (342) -- --
Restructuring.............................................. (42) (10) (402)
----- ----- -----
Total.................................................. $(149) $(241) $(617)
===== ===== =====
</TABLE>
- --------
*Certain reclassifications have been made to conform to 1993 classifications.
Steel and Related Businesses recorded operating income of $123 million in
1993 compared with a loss of $140 million in 1992 and a loss of $235 million
1991. The improvement in 1993 over 1992 was predominantly due to higher steel
shipment volumes and prices, improved operating efficiencies and lower accruals
for environmental and legal contingencies. In addition, 1993 results benefitted
from a $39 million favorable effect from the utilization of funds from
previously established insurance reserves to pay for certain employee insurance
benefits. These positive factors were partially offset by higher hourly steel
labor costs, unfavorable effects associated with pension and other employee
benefits, lower results from coal operations and a $21 million increase in
operating costs related to the adoption of SFAS 112.
The improvement in 1992 compared with 1991 was primarily due to savings from
cost reduction programs, higher utilization of raw steel and raw material
capability and the absence of costs incurred in 1991 due to the lack of an
early labor settlement with the United Steelworkers of America ("USWA"). These
were partially offset by an increase in postretirement benefit costs in
connection with the adoption of SFAS 106, higher depreciation charges and
start-up costs for the Mon Valley Works continuous caster.
Average realized steel prices improved $8 per ton in 1993 after virtually no
change in 1992.
Steel shipments were just under 10 million tons in 1993, an increase of 1.1
million tons over 1992. Shipments in 1992 were basically flat with the 1991
level. U.S. Steel Group shipments comprised approximately 11% of the domestic
steel market in each of the three years. Exports accounted for 4% of U.S. Steel
Group shipments in 1993, compared with 7% in 1992 and 15% in 1991.
Raw steel production was 11.3 million tons in 1993, compared with 10.4
million tons in 1992 and 10.5 million tons in 1991. Raw steel produced was
nearly 100% continuous cast in 1993, versus 83% in 1992 and 67% in 1991. U.S.
Steel completed its continuous cast modernization program in 1992 with the
start up of the Mon Valley Works continuous caster in August 1992. Raw steel
production averaged 96% of capability in 1993 compared with 86% of capability
in 1992 and 70% of capability in 1991.
Other Businesses recorded an operating loss of $29 million in 1993, compared
with operating losses of $96 million in 1992 and $30 million in 1991. The
improvement in 1993 of $67 million and the decrease in 1992 of $66 million
primarily reflected a $28 million charge in 1992 resulting from market
valuation provisions for foreclosed real estate assets and higher provisions in
1992 for loan losses by USX Credit. Loan loss provisions were $11 million in
1993, $42 million in 1992 and $14 million in 1991. USX Credit is not actively
making new loan commitments. Excluding loan loss provisions, the balance of the
operating losses for Other Businesses during the three-year period was largely
due to the effect of depressed titanium markets on RMI's results.
Other Administrative includes the portion of pension credits, postretirement
benefit costs and certain other expenses principally attributable to former
business units of the U.S. Steel Group as well as USX
S-14
<PAGE>
corporate general and administrative costs allocated to the U.S. Steel Group.
Operating income from Other Administrative was $141 million in 1993 compared to
$5 million in 1992 and $50 million in 1991. The 1993 increase resulted mainly
from the absence of a charge incurred in 1992 to cover the amount of the award
in the Energy Buyers litigation and a credit in 1993 due to settlement of all
claims in the case. See footnote (f) to "USX Corporation--Selected Consolidated
Financial Information." The decrease from 1991 to 1992 primarily reflected the
1992 charge related to the Energy Buyers litigation, partially offset by a
decrease in postretirement benefit costs charged to Other Administrative in
connection with the adoption of SFAS 106.
The U.S. Steel Group's 1993 operating loss included restructuring charges of
$42 million related to the planned shutdown of the Maple Creek coal mine and
preparation plant. The 1992 loss included a charge of $10 million for
completion of the portion of the 1991 restructuring plan related to steel
facilities. The 1991 loss included $402 million of restructuring charges
primarily related to the closing of the iron and steel producing, slab and hot
strip mill and pipe mill facilities at Fairless Works; all facilities at South
Works; RMI's sodium and sponge production facilities; a previously idled plate
mill in Baytown, Texas; and miscellaneous other facilities.
The U.S. Steel Group's 1993 operating income was reduced by a total of $21
million due to the adoption of SFAS 112. Operating income in 1992 compared to
1991 was reduced by a total of $42 million due to the adoption of SFAS 106.
The pension credits referred to above, combined with pension costs for
ongoing operating units of the U.S. Steel Group, resulted in net pension
credits (which are primarily noncash) of $202 million, $231 million and $196
million in 1993, 1992 and 1991, respectively. The decrease in 1993 from 1992
was primarily due to a lower assumed long-term rate of return on plan assets.
The increase in 1992 from 1991 primarily reflected recognition of the 1991
growth in plan assets. In 1994, net pension credits are expected to decline by
approximately $60 to $70 million, primarily due to a further reduction in the
assumed long-term rate of return on plan assets.
The domestic steel industry has been adversely affected by unfairly traded
imports. Steel imports to the United States accounted for an estimated 19% of
the domestic steel market during the first eleven months of 1993, and for an
estimated 23% and 24% in October and November, respectively. Steel imports to
the United States accounted for an estimated 17 to 18% of the domestic steel
market in 1992 and 1991. On March 31, 1992, Voluntary Restraint Agreements
restricting the level of steel imports to the United States expired, and in
June 1992, in conjunction with other domestic steel firms, USX filed a number
of antidumping and countervailing duty cases with the USDC and the ITC against
unfairly traded imported carbon flat rolled steel. Beginning in late 1992, as a
result of affirmative preliminary determinations by both the ITC and the USDC
in the vast majority of cases, provisional duties were imposed on the imported
steel products under investigation. On June 22, 1993, the USDC issued the final
determinations of subsidization in the countervailing duty cases and final
margins for sales at less than fair value in the antidumping cases.
On July 27, 1993, the ITC issued affirmative determinations of material
injury to the domestic steel industry by reason of imports in cases
representing an estimated 51% of dollar value and 42% of the volume of all
flat-rolled carbon steel imports under investigation. Affirmative
determinations were found in cases relating to 37% of such volume of cold-
rolled steel, 92% of such volume of the higher value-added corrosion resistant
steel and 97% of such volume of plate steel. Negative determinations were found
in all cases related to hot-rolled steel, the largest import market.
In those cases where negative determinations were made by the ITC,
provisional duties imposed on imports covered by the cases were removed and
final remedial duties were not imposed. While USX is unable to predict the
effect these negative determinations may have on the business or results of
operations of the U.S. Steel Group, they may result in increasing levels of
imported steel and may adversely affect some product prices. As discussed
above, steel imports to the United States have increased in recent months.
S-15
<PAGE>
Although the affirmative determinations are helpful in offsetting the harm to
the U.S. steel industry caused by subsidized and dumped imports, USX believes
that certain of the negative determinations were improper and, together with
other steel firms, has appealed such determinations to the U.S. Court of
International Trade and, in certain cases involving imports from Canada, to a
bi-national panel in accordance with the Canadian Free Trade Agreement. Several
of the affirmative determinations similarly have been challenged in appeals
filed by foreign steel producers.
USX will file additional antidumping and countervailing duty petitions if
unfairly traded imports adversely impact, or threaten to adversely impact, the
results of the U.S. Steel Group.
The U.S. Steel Group depreciates steel assets by modifying straight-line
depreciation based on the level of production. Depreciation charges for 1993
were 100% of straight-line depreciation based on production levels for the
year. Depreciation charges for 1992 and 1991 approximated 91% and 89% of the
amounts that would have been reported if production levels had not been
considered. In 1992, the U.S. Steel Group revised the modification factors used
in the depreciation of steel assets to reflect that raw steel production
capability is entirely continuous cast.
Based on strong recent order levels and assuming a continuing recovery of the
domestic economy, the U.S. Steel Group anticipates that steel demand will
remain strong in 1994. The U.S. Steel Group believes that domestic industry
shipments will reach 89 to 90 million tons in 1994 as compared to approximately
88 million tons in 1993. Price increases on sheet products have been announced
effective January 2 and July 3, 1994. Price increases on certain other products
have also been announced. Realization of these price increases will be
dependent upon steel demand and the level of imports. As previously discussed,
steel imports to the United States have increased in recent months.
U.S. Steel entered into a new five and one-half year contract with the USWA,
effective February 1, 1994, covering approximately 15,000 employees. The
agreement will result in higher labor and benefit costs for the U.S. Steel
Group each year throughout the term of the agreement. The agreement includes a
signing bonus of $1,000 per USWA represented employee that will be paid in the
first quarter of 1994, $500 of which represents the final bonus payable under
the previous agreement. Management believes that this agreement is competitive
with labor agreements reached by U.S. Steel's major domestic integrated
competitors and thus does not believe that U.S. Steel's competitive position
with regard to such other competitors will be materially affected by its
ratification.
Severe cold and extreme winter weather conditions disrupted steel and raw
materials operations and caused forced utility curtailments at Gary Works, Mon
Valley Works and Fairless Works in January 1994. It is likely that these events
will have some negative effects on operations in the first quarter of 1994.
Delhi Group
Operating income was $36 million in 1993, compared with $33 million in 1992
and $31 million in 1991. Operating income in 1993 included favorable effects of
$2 million for the reversal of a prior-period accrual related to a natural gas
contract settlement, $1 million related to gas imbalance settlements and a net
$1 million for a refund of prior years' taxes other than income taxes.
Operating income in 1992 included favorable effects totaling $2 million
relating to the settlement of various lawsuits and third-party disputes.
Excluding the effects of these items, 1993 operating income improved by $1
million, primarily as a result of higher gas sales margins and lower operating
and other expenses, partially offset by a 34% decline in gas processing margins
from the sale of natural gas liquids ("NGLs"). Operating income in 1991
included $8 million due to the favorable settlements of certain contractual
issues. Excluding the effects of the settlements in 1992 and 1991, operating
income in 1992 improved by $8 million, primarily due to increased NGLs volumes
from gas processing, higher natural gas systems throughput volumes and lower
operating and other expenses. These favorable items were partially offset by
lower unit margins for NGLs, reflecting lower NGLs prices and higher feedstock
costs.
S-16
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided from operating activities totaled $944 million in 1993,
compared with $920 million in 1992. The 1993 period was negatively affected by
payments of $314 million related to partial settlement of the B&LE litigation
and settlement of the Energy Buyers litigation. The 1992 period included $296
million associated with the refund of prior years' production taxes. Excluding
these items, net cash provided from operating activities improved $634 million
from 1992. The increase primarily reflected improved operations for the U.S.
Steel Group, improved refined product margins for the Marathon Group and a $103
million favorable effect from the use of available funds from previously
established (now depleted) insurance reserves to pay for certain active and
retired employee insurance benefits.
Excluding the 1992 refund discussed above, net cash provided from operating
activities in 1992 declined $399 million from 1991 primarily due to lower
income, partially offset by favorable changes in working capital accounts.
Capital expenditures were $1,151 million in 1993, compared with $1,505
million in 1992 and $1,392 million in 1991. The $354 million decrease in 1993
was due primarily to lower expenditures for the Marathon Group and the U.S.
Steel Group. The decline for the Marathon Group mainly reflected decreased
expenditures for environmental projects and for development of the East Brae
Field and SAGE system in the United Kingdom and other international projects,
partially offset by increased exploration and development projects in the Gulf
of Mexico and increased drilling activity for onshore domestic natural gas
projects. The decrease for the U.S. Steel Group primarily reflected completion
of U.S. Steel's continuous cast modernization program in 1992. Contract
commitments for capital expenditures at year-end 1993 were $389 million,
compared with $423 million at year-end 1992. For the year 1994, capital
expenditures are expected to total approximately $1.1 billion. The slight
anticipated decrease in 1994 is expected to result mainly from lower
expenditures for the Marathon Group, partially offset by higher expenditures
for the U.S. Steel Group. The Marathon Group's capital expenditures are
expected to decrease by approximately $100 million in 1994 mainly reflecting
lower expenditures for development of the East Brae Field and SAGE system. The
U.S. Steel Group's capital expenditures are expected to increase by
approximately $60 million in 1994 and will include continued expenditures for
projects begun in 1993 relative to environmental, hot-strip mill and pickle
line improvements at Gary Works and initial expenditures for a blast furnace
project at Mon Valley Works which is planned for completion in 1995.
Cash from the disposal of assets was $469 million in 1993, compared with $117
million in 1992 and $78 million in 1991. The 1993 amount primarily reflected
the realization of proceeds from a subordinated note related to the 1988 sale
of Transtar, the sale of the Cumberland coal mine, the sale/leaseback of
interests in two LNG tankers, and the sales of various domestic oil and gas
production properties and of an investment in an insurance company. No
individually significant sales transactions occurred in 1992 or 1991.
Financial obligations decreased by $458 million in 1993, compared with a
decrease of $240 million in 1992 and an increase of $662 million in 1991. These
amounts represent net cash flows on commercial paper and the revolving credit
agreements and lines of credit, other debt and production financing and other
agreements. During 1993, USX issued an aggregate principal amount of $800
million of fixed rate debt through its medium-term note program and three
separate series of unsecured, noncallable debt securities in the public market.
Maturities ranged from 5 to 30 years and interest rates ranged from 6 3/8% to 8
1/2% per annum. In addition, an aggregate principal amount of $77 million of
Marathon 9 1/2% Guaranteed Notes Due 1994 was tendered in exchange for its
Monthly Interest Guaranteed Notes Due 2002, 9 3/4% to March 1, 1994 and 7%
thereafter. During 1992, USX issued an aggregate principal amount of $748
million of fixed rate debt through its medium-term note program and three
separate series of unsecured, noncallable debt securities in the public market.
Maturities ranged from 5 to 30 years and interest rates ranged from 6.65% to
9.375% per annum. During 1991, debt borrowings included the issuance of three
separate series of unsecured, noncallable debt securities in the public market
in the aggregate principal amount of $550 million and a $300 million loan to
Marathon Oil U.K., Ltd. from the European Investment Bank.
S-17
<PAGE>
Preferred stock issued totaled $336 million in 1993. The 1993 amount
reflected the sale of 6,900,000 shares of 6.50% Convertible Preferred to the
public for net proceeds of $336 million. The 6.50% Convertible Preferred is
convertible at any time into shares of Steel Stock at a conversion price of
$46.125 per share of Steel Stock.
Common stock issued, net of repurchases, totaled $371 million in 1993,
compared with $942 million in 1992 and $70 million in 1991. The 1993 amount
mainly reflected the sale of 10,000,000 shares of Steel Stock to the public for
net proceeds of $350 million. The increase in 1992 primarily reflected sales to
the public of all three classes of common stock. In 1992, USX sold 25,000,000
shares of Marathon Stock for net proceeds of $541 million, 8,050,000 shares of
Steel Stock for net proceeds of $198 million and 9,000,000 shares of Delhi
Stock for net proceeds of $136 million.
Dividend payments decreased in 1993 primarily due to a decrease in the
dividend rate on Marathon Stock in the fourth quarter of 1992, partially offset
by increased dividends due primarily to the sale in 1993 of additional shares
of Steel Stock and of the 6.50% Convertible Preferred mentioned above. The
increase in 1992 from 1991 primarily resulted from higher dividends due to the
sale of additional shares of all three classes of common stock in 1992,
partially offset by the fourth quarter decrease in the dividend rate on
Marathon Stock.
In September 1993, Standard & Poor's Corp. ("S&P") lowered its ratings on
USX's and Marathon's senior debt to below investment grade (from BBB- to BB+)
and on USX's subordinated debt, preferred stock and commercial paper. S&P cited
extremely aggressive financial leverage, burdensome retiree medical liabilities
and litigation contingencies. In October 1993, Moody's Investors Service, Inc.
("Moody's") confirmed its Baa3 investment grade ratings on USX's and Marathon's
senior debt. Moody's also confirmed its ratings on USX's subordinated debt and
commercial paper, but lowered its ratings on USX's preferred stock from ba1 to
ba2. Moody's noted that the rating confirmation on USX debt securities
reflected confidence in the expected performance of USX during the intermediate
term, while the downward revision of the preferred stock ratings incorporated a
narrow fixed charge coverage going forward. The downgrades by S&P and the
downgrade of ratings on preferred stock by Moody's could increase USX's cost of
capital.
In December 1993, USX filed a universal shelf registration statement with the
Securities and Exchange Commission which became effective on January 6, 1994
and allows USX to offer and issue up to $850 million of debt and equity
securities. The equity securities include preferred stock as well as each class
of USX's common stock. In January 1994, USX sold 5,000,000 shares of Steel
Stock to the public under the shelf registration for net proceeds of $201
million.
As a result of the settlement of LTV's portion of the B&LE litigation, USX is
obligated to pay an additional $175 million to LTV in the first quarter of
1994. In addition, approximately $210 million in judgments for other MDL-587
plaintiffs are due for payment in the first quarter of 1994. See footnote (f)
to "USX Corporation--Selected Consolidated Financial Information."
USX anticipates that it will begin funding the U.S. Steel Group's pension
plan by approximately $100 million per year commencing with the 1994 plan year.
The funding for both the 1994 and 1995 plan years will impact cash flows in
1995.
USX believes that its short-term and long-term liquidity is adequate to
satisfy its obligations (including those related to the B&LE litigation) as of
December 31, 1993, and to complete currently authorized capital spending
programs. USX actively used its access to capital markets during 1993 to meet
its business needs beyond internally generated funds. Future requirements for
its business needs, including the funding of capital expenditures, debt
maturities for the years 1994 to 1996 and amounts which may ultimately be paid
in connection with contingencies are expected to be financed by a combination
of internally generated funds, proceeds from the sale of stock (including the
Steel Stock sold in January 1994), future borrowings and other external
financing sources. Long-term debt of $734 million matures within one year,
including $699 million classified as long-term debt at December 31, 1993. The
$699 million represents the Marathon 9 1/2% Guaranteed Notes Due March 1, 1994.
See footnote (h) to "USX Corporation--Selected Consolidated Financial
Information" herein.
S-18
<PAGE>
ENVIRONMENTAL MATTERS, LITIGATION AND CONTINGENCIES
USX has incurred and will continue to incur substantial capital, operating
and maintenance, and remediation expenditures as a result of environmental laws
and regulations. In recent years, these expenditures have increased primarily
due to required product reformulation and process changes in order to meet CAA
obligations, although ongoing compliance costs have also been significant. To
the extent these expenditures, as with all costs, are not ultimately reflected
in the prices of USX's products and services, operating results will be
adversely affected. USX believes that domestic competitors of the U.S. Steel
Group and substantially all the competitors of the Marathon Group and the Delhi
Group are subject to similar environmental laws and regulations. However, the
specific impact on each competitor may vary depending on a number of factors,
including the age and location of their operating facilities and their
production processes and whether or not they are engaged in the petrochemical
business.
USX's environmental expenditures for 1993 and 1992 are discussed below and
have been estimated for the Marathon Group and the Delhi Group based on
American Petroleum Institute ("API") survey guidelines and for the U.S. Steel
Group based on USDC survey guidelines. These guidelines are subject to
differing interpretations which could affect the comparability of such data.
Some environmental related expenditures, while benefitting the environment,
also enhance operating efficiencies.
The Marathon Group's total environmental expenditures in 1993 were $253
million compared with $370 million in 1992. These amounts consisted of capital
expenditures of $123 million in 1993 and $240 million in 1992 and estimated
compliance expenditures (including operating and maintenance) of $130 million
in both 1993 and 1992. Compliance expenditures were broadly estimated based on
API survey guidelines and represented 1% of the Marathon Group's total
operating costs in both 1993 and 1992. The decline in environmental capital
expenditures from 1992 to 1993 primarily reflected the Marathon Group's multi-
year capital spending program for diesel fuel desulfurization which was
substantially completed in 1993.
The U.S. Steel Group's total environmental expenditures in 1993 were $240
million compared with $220 million in 1992. These amounts consisted of capital
expenditures of $53 million in 1993 and $52 million in 1992 and estimated
compliance expenditures (including operating and maintenance) of $187 million
in 1993 and $168 million in 1992. Compliance expenditures were broadly
estimated based on USDC survey guidelines and represented 3% of the U.S. Steel
Group's total operating costs in both 1993 and 1992.
The Delhi Group's total environmental expenditures in 1993 were $10 million
compared with $8 million in 1992. These amounts consisted of capital
expenditures of $5 million in 1993 and $3 million in 1992 and estimated
compliance expenditures (including operating and maintenance) of $5 million in
both 1993 and 1992. Compliance expenditures were broadly estimated based on API
survey guidelines and represented 1% of the Delhi Group's total operating costs
in both 1993 and 1992.
USX's environmental capital expenditures totaled $181 million in 1993, $294
million in 1992 and $175 million in 1991. Such expenditures accounted for 16%,
20% and 13% of total consolidated capital expenditures in 1993, 1992 and 1991,
respectively. USX expects such expenditures to approximate $150 million in 1994
or approximately 13% of total estimated consolidated capital expenditures. The
increase from 1991 to 1992 and the decline in 1993 was primarily the result of
Marathon's multi-year capital spending program for diesel fuel desulfurization
which was substantially completed in 1993. Predictions beyond 1994 can only be
broad-based estimates which have varied, and will continue to vary, due to the
ongoing evolution of specific regulatory requirements, the possible imposition
of more stringent requirements and the availability of new technologies, among
other matters. Based upon currently identified projects, USX anticipates that
environmental capital expenditures in 1995 will total approximately $90
million; however, actual expenditures may increase as additional projects are
identified or additional requirements are imposed.
USX has been notified that it is a potentially responsible party ("PRP") at
55 waste sites under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") as of December 31, 1993. In addition, there are 50
sites where USX has received information requests or other indications that USX
may be a PRP under CERCLA but where sufficient information is not presently
available to confirm the existence
S-19
<PAGE>
of liability or make any judgment as to the amount thereof. There are also 62
additional sites, excluding retail gasoline stations, where state governmental
agencies or private parties are seeking remediation under state environmental
laws through discussions or litigation. Total environmental expenditures for
the Marathon Group included remediation related expenditures estimated at $38
million in 1993 and $35 million in 1992. Remediation spending was primarily
related to retail gasoline stations which incur ongoing clean-up costs for soil
and groundwater contamination associated with underground storage tanks and
piping. Total environmental expenditures for the U.S. Steel Group included
remediation related expenditures estimated at $19 million in 1993 and $11
million in 1992. Remediation related expenditures for the Delhi Group were not
material. USX accrues for environmental remediation activities when the
responsibility to remediate is probable and the amount of associated costs is
reasonably determinable. At most of these sites, USX is one of a number of PRPs
and the total cost of remediation, as well as USX's share thereof, is
frequently dependent upon the outcome of investigations and remedial studies.
As environmental remediation matters proceed toward ultimate resolution and
additional remediation matters come to management's attention, charges in
excess of those previously accrued may be required.
New or expanded requirements for environmental regulations, which could
increase USX's environmental costs, may arise in the future. USX intends to
comply with all legal requirements regarding the environment, but since many of
them are not fixed or presently determinable (even under existing legislation)
and may be affected by future legislation, it is not possible to accurately
predict the ultimate cost of compliance, including remediation costs which may
be incurred and penalties which may be imposed. However, based on presently
available information, and existing laws and regulations as currently
implemented, management does not anticipate that environmental compliance
expenditures will materially increase in 1994. As discussed above,
environmental capital expenditures are currently expected to decrease in 1994
and again in 1995.
USX is the subject of, or party to, a number of pending or threatened legal
actions, contingencies and commitments involving a variety of matters,
including laws and regulations relating to the environment. Certain of these
matters are discussed in footnote (f) to "USX Corporation--Selected
Consolidated Financial Information." The ultimate resolution of these
contingencies could, individually or in the aggregate, be material to the
consolidated financial statements. However, management believes that USX will
remain a viable and competitive enterprise even though it is possible that
these contingencies could be resolved unfavorably. See "USX Corporation--
Analysis of Selected Consolidated Financial Information--Liquidity and Capital
Resources" above.
ACCOUNTING STANDARD
Statement of Financial Accounting Standards No. 114--Accounting by Creditors
for Impairment of a Loan ("SFAS 114") requires impairment of loans based on
either the sum of discounted cash flows or the fair value of underlying
collateral. USX expects to adopt SFAS 114 in the first quarter of 1995. Based
on preliminary estimates, USX expects that the unfavorable effect of adopting
SFAS 114 will be less than $2 million.
S-20
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered hereby
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Debt Securities set forth in
"Description of the Debt Securities" in the accompanying Prospectus, to which
description reference is hereby made. Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Prospectus.
The Notes will be limited to $300 million aggregate principal amount and will
mature on February 15, 2004. The Notes will be issued only in book-entry form
in denominations of $1,000 and integral multiples thereof. The Notes will bear
interest at the rate per annum shown on the cover of this Prospectus Supplement
from February 7, 1994 or from the most recent Interest Payment Date to which
interest has been paid or provided for, payable semiannually on February 15 and
August 15 of each year, commencing August 15, 1994, to the person in whose name
a Note (or any predecessor Note) is registered at the close of business on the
January 31 or July 31, as the case may be, next preceding such Interest Payment
Date. The Notes will not be redeemable prior to maturity and do not provide for
any sinking fund. The covenants contained in the Indenture and the Notes would
not necessarily afford holders of the Notes protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Notes.
The Notes are subject to defeasance and covenant defeasance by the Company if
certain conditions are satisfied. Any such defeasance or covenant defeasance
would be likely to have a taxable effect on Holders of the Notes. See
"Description of the Debt Securities--Satisfaction and Discharge; Defeasance and
Covenant Defeasance" in the accompanying Prospectus.
With respect to the Notes offered hereby, for purposes of Section 11.01 of
the Indenture, "substantially all of its assets" means, at any date, a portion
of the Company's non-current assets reflected in the Company's consolidated
balance sheet as of the end of the most recent quarterly period that represents
at least 66 2/3% of the total reported value of such assets.
BOOK-ENTRY SECURITIES
The Notes will be issued in the form of two or more fully registered Global
Securities. Each Global Security will be deposited with, or on behalf of, the
Depositary, and will be registered in the name of the Depositary or its
nominee.
Except under the limited circumstances described in "Description of the Debt
Securities--Book-Entry Securities" in the accompanying Prospectus, Global
Securities will not be exchangeable for definitive certificated Securities.
The total amount of principal and interest due on any Global Security
representing one or more Notes on any Interest Payment Date or at maturity will
be made available to the Trustee on such date. As soon as possible thereafter,
the Trustee will make such payments to the Depositary. The Depositary will
allocate such payments to each Note represented by such Global Security and
make payments to the owners or holders thereof in accordance with its existing
operating procedures. Neither the Company nor the Trustee shall have any
responsibility or liability for such payments by the Depositary. As long as the
Depositary or its nominee is the registered owner of any Global Security, the
Depositary or its nominee, as the case may be, will be considered the sole
owner or holder of the Note or Notes represented by such Global Security for
all purposes under the Indenture and the Notes. The Company understands,
however, that under existing industry practice, the Depositary will authorize
the persons on whose behalf it holds a Global Security to exercise certain
rights of holders of Notes. See "Description of the Debt Securities--Book-Entry
Securities" in the Prospectus.
The Depositary is a limited purpose trust company organized under the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act
S-21
<PAGE>
of 1934, as amended. The Depositary holds securities of its participants and
facilitates the settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies, that clear through or maintain a custodial relationship
with a participant, either directly or indirectly.
For a further description of the Depositary's procedures with respect to
Book-Entry Securities, see "Description of the Debt Securities--Book-Entry
Securities" in the Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and
each of the Underwriters, for whom Salomon Brothers Inc, Goldman, Sachs & Co.
and Lehman Brothers Inc. are acting as Representatives, has severally agreed to
purchase, the amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
----------- ------------
<S> <C>
Salomon Brothers Inc........................................... $ 91,000,000
Goldman, Sachs & Co............................................ 91,000,000
Lehman Brothers Inc............................................ 91,000,000
Chemical Securities Inc........................................ 9,000,000
Citicorp Securities, Inc....................................... 9,000,000
UBS Securities Inc............................................. 9,000,000
------------
Total..................................................... $300,000,000
============
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Notes
offered hereby if any Notes are purchased. In the event of default by any
Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the Underwriting Agreement may be terminated.
The Company has been advised by the Representatives that the several
Underwriters propose initially to offer the Notes to the public at the public
offering price set forth on the cover page of this Prospectus Supplement, and
to certain dealers at such price less a concession of not more than .400% of
the principal amount of the Notes. The Underwriters may allow and such dealers
may reallow a concession of not more than .250% of the principal amount of the
Notes to certain other dealers. After the initial public offering, the public
offering price and such concessions may be changed.
The Company has been advised by the Underwriters that they intend to make a
market in the Notes but that they are not obligated to do so and may
discontinue making a market at any time without notice. The Company currently
has no intention to list the Notes on any securities exchange, and there can be
no assurance given as to the liquidity of the trading market for the Notes.
The Underwriting Agreement provides that the Company will indemnify the
several Underwriters against certain civil liabilities, including liabilities
under the Securities Act of 1933, or contribute to payments which the
Underwriters may be required to make in respect thereof.
Chemical Securities Inc. ("CSI") is an affiliate of Chemical Bank which is a
lender under the Company's Revolving Credit and Term Loan Agreement. Chemical
Bank Delaware, another affiliate of CSI, is the trustee under the Company's
indentures relating to the Company's 7% Convertible Subordinated Debentures Due
2007 and the 4 5/8% Subordinated Debentures Due 1996. A director (and former
chairman and chief executive officer)
S-22
<PAGE>
of Chemical Banking Corporation, the parent of CSI, is a director on the board
of directors of the Company, and the former chief financial officer of the
Company is a director on the board of directors of Chemical Banking
Corporation. In addition, Chemical Bank, or its affiliates, participates on a
regular basis in various general financing and banking transactions for the
Company.
In the ordinary course of their respective business, the Underwriters and
their affiliates have engaged, and may in the future engage, in investment
banking and/or commercial banking transactions with the Company.
VALIDITY OF THE NOTES
The validity of the Notes offered hereby will be passed upon for USX by D. D.
Sandman, Esq., General Counsel and Secretary of USX, and for the Underwriters
by Sullivan & Cromwell, New York, New York. Mr. Sandman, in his capacity as
General Counsel and Secretary, is paid a salary by USX and participates in the
various employee benefit plans offered to officers of USX generally. Mr.
Sandman will rely as to matters of New York law on the opinion of Sullivan &
Cromwell.
EXPERTS
The consolidated financial statements of the Company, as of December 31, 1992
and 1991 and for each of the three years in the period ended December 31, 1992
incorporated in the Prospectus by reference to USX's Annual Report on Form 10-K
for the year ended December 31, 1992 have been so incorporated in reliance on
the report of Price Waterhouse, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
S-23
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION, OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CON-
TAINED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PRO-
SPECTUS SUPPLEMENT AND THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A SOLICITA-
TION OF AN OFFER TO BUY ANY SECURITY IN ANY JURISDICTION IN WHICH IT IS UNLAW-
FUL TO MAKE SUCH OFFER OR SOLICITATION.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
PAGE
----
<S> <C>
USX Corporation........................................................... S-2
Use of Proceeds........................................................... S-3
USX Corporation--Selected Consolidated Financial Information.............. S-4
Ratios of Earnings to Fixed Charges....................................... S-8
USX Corporation--Analysis of Selected Consolidated Financial Information . S-9
Description of the Notes.................................................. S-21
Underwriting.............................................................. S-22
Validity of the Notes..................................................... S-23
Experts................................................................... S-23
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents
by Reference............................................................. 2
USX Corporation........................................................... 3
Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges
and Preferred Stock DIvidends............................................ 3
Use of Proceeds........................................................... 4
Special Considerations.................................................... 4
Management and Accounting Policies........................................ 7
Description of the Debt Securities........................................ 8
Description of Capital Stock.............................................. 15
Plan of Distribution...................................................... 29
Validity of Securities.................................................... 29
Experts................................................................... 29
Appendix I--Summary of USX Common Stock................................... A-1
</TABLE>
$300,000,000
USX CORPORATION
7.20% NOTES DUE 2004
LOGO
SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
PROSPECTUS SUPPLEMENT DATED JANUARY 31, 1994
