UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported):
December 12, 1997
USX Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-5153 25-0996816
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
600 Grant Street, Pittsburgh, PA 15219-4776
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(Address of principal executive offices) (Zip Code)
(412) 433-1121
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(Registrant's telephone number,
including area code)
<PAGE> 2
Item 5. Other Events
On December 12, 1997, representatives of USX Corporation, Marathon Oil, and
Ashland signed definitive agreements that will formally create Marathon
Ashland Petroleum LLC. Marathon has a 62 percent interest and Ashland a 38
percent interest in the new company which is expected to commence operations
following closing, which is scheduled for January 1, 1998. A copy of the
press release is filed herewith as an exhibit.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.) 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/ Kenneth L. Matheny
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Kenneth L. Matheny
Vice President & Comptroller
Dated: December 16, 1997
FOR FURTHER INFORMATION:
USX Ashland Inc.
William E. Keslar Dan Lacy
(412) 433-6870 (606) 329-3148
FOR IMMEDIATE RELEASE
DEFINITIVE AGREEMENTS SIGNED FOR MARATHON, ASHLAND JOINT VENTURE
FINDLAY, OH, Dec. 12 -- Thomas J. Usher, chairman of USX Corporation,
Victor G. Beghini, president of Marathon Oil, and Paul W. Chellgren, Ashland
chairman and chief executive officer, signed definitive agreements today that
will formally create Marathon Ashland Petroleum LLC. Marathon has a 62
percent interest and Ashland a 38 percent interest in the new company which is
expected to commence operations January 1, 1998.
Plans to pursue the joint venture were first announced last May 15 when a
letter of intent to seek a combination of the major elements of the two firms'
downstream operations was signed. As announced on December 8, the Federal
Trade Commission has advised both companies that it has completed the
antitrust review of their refining and marketing joint venture announced
earlier this year, and will permit the transaction to proceed.
Potential efficiencies to be derived by the joint venture have been
broadly estimated to be in excess of $200 million annually on a pre-tax
basis. While a modest part of these efficiencies will begin to be achieved in
mid- to late 1998, full realization of efficiencies should occur over the next
few years as the joint venture's integration plans are implemented. Certain
transition costs, principally severance and relocation, will be incurred by
both parents in connection with the formation of the new company; however,
these one-time costs are not expected to be significant, nor are any major
asset dispositions anticipated in connection with the combination at this
time.
"Today's signing represents the culmination of months of comprehensive
planning and discussion and reflects the efforts of hundreds of dedicated
Marathon, USX and Ashland employees. More importantly, this signing
represents the creation of a new company, one well-suited to the demands of a
changing market," Usher stated. "The prospect of combining complementary
assets and integrating marketing and operations strengths through Marathon
Ashland Petroleum LLC is extremely exciting. I expect the joint venture to be
a formidable competitor."
"We're very pleased that the definitive agreements have been signed,"
said Chellgren. "Marathon, USX and Ashland employees are to be commended for
the hard work, dedication and aggressive pace that they've maintained toward
building one of the strongest and most competitive downstream companies in the
industry. It's our goal to close the transaction as near to year-end as
possible and integrate the operations of the two companies as soon as
possible."
J. L. "Corky" Frank, Marathon's executive vice president for refining,
marketing and transportation, will be president of the joint venture and D.
Duane Gilliam, Ashland Petroleum president, will be executive vice president.
Other officers of the joint venture from both companies have also been
announced. Headquarters for Marathon Ashland Petroleum will be located in
Findlay, Ohio.
"This signing combines the downstream resources of two outstanding parent
companies in an exciting growth-oriented venture," Frank said. "I see the
potential for significantly enhancing the value provided to customers and
other stakeholders through the joint venture's economies of scale, feedstock
purchasing, market access, and refining/transportation flexibility. But the
most important resource of all is our employees," he emphasized. "Innovation
and performance derives from people. Because of the caliber of our people, I
have no doubt that our performance will grow to be best of class."
Marathon and Ashland have agreed that exploration, production and
chemical businesses are not to be part of the joint venture. Ashland's
refinery-produced petrochemicals will be included in the joint venture. Other
exclusions include Ashland's Valvoline division, along with certain Marathon
equity investments in pipelines.
Plans are to continue employing the existing brands that each of the
parent companies have utilized successfully. In the future, the joint venture
will develop a brand strategy that will maximize the market impact of the
brand offering. Marathon operates under the Marathon brand and through its
Emro Marketing Company brands: Speedway, Bonded, Cheker, Starvin' Marvin,
United, Gastown, Wake Up and Kwik Sak. Ashland brands include: Ashland,
SuperAmerica and Rich Oil.
Marathon Ashland Petroleum LLC will have approximately six percent of
total U.S. refining capacity with seven plants located at Garyville, LA,
(255,000 b/d); Catlettsburg, KY, (220,000 b/d), Robinson, IL (180,000 b/d);
St. Paul Park, MN (70,000 b/d); Texas City, TX (70,000 b/d); Detroit, MI
(70,000 b/d); and Canton, OH (70,000 b/d). The new company will have 84 light
products and asphalt terminals in the Midwest and Southeast regions of the
United States, 5,400 retail marketing outlets in 20 states, and significant
pipeline holdings. On a pro forma basis, the joint venture's combined total
assets would have been roughly $7 billion at the end of 1996 and reported
sales revenues for 1996 would have been approximately $20 billion, which
includes approximately $7 billion of excise taxes and matching buy/sell
transactions.
Marathon Oil Company is a part of the USX-Marathon Group (NYSE:MRO), a
unit of USX Corporation. Ashland Inc. (NYSE:ASH) is a large energy and
chemical company engaged in petroleum refining and marketing; coal and highway
construction.
December 12, 1997
For more information on Marathon, see the website at www.marathon.com or
www.usx.com.
For more information on Ashland, see the website at www.ashland.com.
# # #
This press release includes forward-looking statements, particularly
concerning the amount of savings from potential efficiencies. These statements
contain the words "expected," "potential," or "estimated," indicating that
future outcomes are not known with certainty and subject to risk factors. Some
factors that could potentially cause actual outcomes to differ materially from
information set forth in the forward-looking statements include; unanticipated
costs to implement shared technology, difficulties in integrating corporate
structures, delays in leveraging volume procurement advantages or delays in
personnel rationalization. In addition, in accordance with the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, USX has
included in its Form 10-Q for the period ended March 31, 1997, meaningful
cautionary statements identifying important factors, but not necessarily all
factors, that could cause actual results to differ materially from those set
forth in the forward-looking statements.
Marathon Ashland Petroleum LLC
Marathon Facts Ashland Facts Marathon Ashland Petroleum LLC
Facts
Marathon Oil Company Ashland Inc. Marathon Ashland Petroleum LLC
P.O. Box 3128 P.O. Box 391 539 South Main Street
Houston, TX 77253-3128 Ashland, KY 41114 Findlay, OH 45840-3295
(713) 629-6600 Phone (606) 329-3333 Phone (419) 422-2121 Phone
(713) 871-0728 FAX (606) 329-3922 FAX (419) 421-2540 FAX
J. L. "Corky" Frank, D. Duane Gilliam, J. L. "Corky", Frank,
Executive Vice President, President, Ashland President,
refining, marketing and Petroleum Company D. Duane Gilliam,
transportation Executive Vice President
Riad N. Yammine, President, John F. Pettus, Riad N. Yammine, President,
Emro Marketing Company President, Emro Marketing Company
SuperAmerica
Manfred Spindler, VP, Randy K. Lohoff, John F. Pettus, President
refining VP, human resources Superamerica
Kevin M. Henning, VP,
supply and
transportation Manfred Spindler, Sr. VP,
Richard E. White, VP, J. Michael Wilder, refining
marketing VP and General Kevin M. Henning, Sr. VP,
Garry L. Peiffer, Counsel Crude oil and product
Assistant controller, Lamar M. Chambers, supply and transportation
refining, marketing Admin, VP, finance
and transportation Richard E. White, Sr. VP,
Rodney P. Nichols, Manager, wholesale and brand
human resources marketing
Gary R. Heminger, Manager, Garry L. Peiffer, Sr. VP,
business development and finance and commercial
joint interest, planning services
Clifford C. Cook, Manager Randy K. Lohoff, Sr. VP,
operations planning and human resources, and
products supply health, environment and
safety
J. Michael Wilder, General
Counsel and Secretary
Lamar M. Chambers, VP,
finance and controller
Rodney P. Nichols, VP,
human resources
Gary R. Heminger, VP,
business development
Clifford C. Cook, VP,
operations planning and
product supply
Marathon Refineries (4) Ashland Marathon Ashland
Refinineries (3) Petroleum LLC
Refineries (7)
Garyville, LA Garyville, LA
Capacity: 255,000 bpd Capacity: 255,000 bpd
Catlettsburg, KY Catlettsburg, KY
Capacity:220,000 Capacity: 220,000 bpd
Robinson, IL bpd Robinson, IL
Capacity: 180,000 bpd Capacity: 180,000 bpd
St. Paul Park, MN St. Paul Park, MN
Capacity:70,000 bpd Capacity: 70,000 bpd
Detroit, MI Detroit, MI
Capacity: 70,000 bpd Capacity: 70,000 bpd
Canton, OH Canton, OH
Capacity:70,000 bpd Capacity: 70,000 bpd
Texas City, TX Texas City, TX
Capacity: 70,000 bpd Capacity: 70,000 bpd
Total Total Total
Marathon Capacity: Ashland Capacity: Marathon Ashland
575,000 bpd 360,000 bpd Petroleum LLC Combined
Capacity:
935,000 bpd
Marathon percent of U.S. Ashland percent of Total Marathon Ashland
Capacity: 3.7 U.S. Capacity: 2.3 Petroleum LLC percent of
U.S. Capacity: 6.0
Marathon Terminals Ashland Terminals Marathon Ashland
Petroleum LLC Terminals
51 light product and 34 light product 84 light
asphalt terminals and asphalt product and
in the Midwest and terminals asphalt
Southeast terminals. (One
light product facility
in Niles, MI, is
jointly owned)
Marathon Ashland Marathon Ashland
Retail Marketing Retail Marketing Petroleum LLC.
Retail Marketing
Approximately 4,000 1,413 outlets in 11 Approximately 5,400 outlets
outlets in 17 states states including: in 20 states including:
including:
AL, FL, GA, IL, IN, KY, IL, IN, KY, MN, ND, AL, FL, GA, IL, IN, KY, LA,
LA, MI, MS, NC, OH, PA, OH, PA, SD, VA, WV, MI, MN, MS, NC,
SC, TN, and WI ND, OH, PA,
VA, WV, and WI SC, SD, TN, VA, WV, and WI
Marathon Pipeline Ashland Pipeline Marathon Ashland
Petroleum LLC. Pipeline
Marathon owns, leases, or Ashland owns, leases Owns, leases or has an
has an ownership or has an ownership ownership interest in
interest in 5,635 miles interest in 5,790 10,651 miles of pipeline.
of pipeline that miles of pipeline This total reflects both
will be included in in 13 states. Ashland's and Marathon's
the joint venture. This This includes joint interests in 667
includes 878 miles of 2,287 miles miles of Capline, the large
crude oil gathering of crude oil pipeline that transports
lines; 2,434 miles of gathering lines, crude oil from St. James,
crude oil trunk 2,987 miles of LA, to Patoka, IL, and
lines; and 2,323 miles crude oil trunk both companies' interest in
of product lines lines, 475 miles the 107 miles of pipeline in
of product lines in the Louisiana Offshore
and 41 miles Oil Port (LOOP) system
of natural gas
liquid lines.
