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):
January 26, 1999
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 January 26, 1999, USX-Marathon Group announced its 1999 capital, investment
and exploration budget of $1.522 billion. A copy of the press release
announcing this budget is attached.
The Company is filing revised calculations of the computation of ratio of
earnings to combined fixed charges and preferred stock dividends and the
computation of the ratio of earnings to fixed charges for each of the
year-to-date periods ended March 31, June 30, and September 30, 1998.
The revised calculations reflect the inclusion of earnings
attributable to the minority shareholder of Marathon Ashland
Petroleum LLC. The attached calculations supersede those previously
made by the Company.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1. USX-Marathon Group 1999 Capital, Investment and
Exploration Budget Press Release.
Exhibit 12.1
Exhibit 12.1.1 First Quarter 1998 - USX Corporation computation of
ratio of earnings to combined fixed charges and
preferred stock dividends
Exhibit 12.1.2 Second Quarter 1998 - USX Corporation computation of
ratio of earnings to combined fixed charges and
preferred stock dividends
Exhibit 12.1.3 Third Quarter 1998 - USX Corporation computation of
ratio of earnings to combined fixed charges and
preferred stock dividends
Exhibit 12.2
Exhibit 12.2.1 First Quarter 1998 - USX Corporation computation of
ratio of earnings to fixed charges
Exhibit 12.2.2 Second Quarter 1998 - USX Corporation computation of
ratio of earnings to fixed charges
Exhibit 12.2.3 Third Quarter 1998 - USX Corporation computation of
ratio of earnings to fixed charges
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/ Edward F. Guna
-----------------------
Edward F. Guna
Vice President and Treasurer
Dated: January 27, 1999
Contact: William P. Ryder
(713) 296-3912
FOR IMMEDIATE RELEASE
USX - MARATHON GROUP 1999 CAPITAL, INVESTMENT
AND EXPLORATION BUDGET SET AT $1.522 BILLION
PITTSBURGH, Jan. 26--USX Corporation has approved a 1999 Marathon Group
capital, investment and exploration budget of $1.522 billion, Thomas J. Usher,
chairman and chief executive officer, announced today. Usher commented, "This
1999 spending plan focuses on meeting our growth profile in producing volumes
and also increasing the level of activity in our downstream operations. I want
to emphasize, however, that spending will be tailored to reflect industry
conditions and other financial considerations."
Victor G. Beghini, vice chairman-Marathon Group and president of Marathon
Oil Company, noted that this year's budget will follow up on the strategic
accomplishments of 1998 in particular with respect to the upstream acquisition
of Tarragon Oil and Gas Limited in Canada and the downstream integration
activities of Marathon Ashland Petroleum LLC (MAP). Beghini added, "We will
continue to grow the business by bringing important new projects on stream in
1999, and continue to gain efficiencies in MAP. Marathon's capital, investment
and exploration program will be adjusted, if necessary, to insure that it is
fully funded from internally generated funds."
The Group's capital and investment program of $1.311 billion includes $675
million for production activities, $579 million for refining, marketing and
transportation and $50 million for other energy related businesses. Actual
capital and investment expenditures in 1998 totaled $2.255 billion, which
includes the acquisition of Tarragon for $1.060 billion. The worldwide
exploration budget for 1999 amounts to $211 million, compared to 1998
expenditures of $238 million, with 69 percent dedicated to North American new
ventures and prospects.
In North America, upstream capital spending is planned at $486 million
compared to $560 million in 1998 exclusive of the Tarragon acquisition.
Spending in 1999 includes the Green Canyon 112 (Stellaria) development in the
Gulf of Mexico and an emphasis on natural gas developments in East Texas and
other gas basins throughout the western United States and Canada. Canadian
capital spending assumes a full year of work in Marathon's newly acquired
Canadian assets.
Outside North America, capital and investment plans total $189 million,
compared to $165 million in 1998, primarily devoted to offshore Gabon, where the
Tchatamba South field is scheduled to begin production in the third quarter as
well as the Sakhalin II Phase I development, which also is scheduled to come on
stream in the third quarter.
Worldwide production is expected to continue its growth profile with 1999
liquid hydrocarbon production averaging about 230,000 barrels per day (bpd), up
34,000 bpd over 1998, and natural gas production averaging about 1.38 billion
cubic feet of gas per day, up 140 million cubic feet per day over 1998.
Downstream capital spending, which includes MAP expenditures at 100
percent, is budgeted at $579 million compared to 1998 expenditures of $437
million. This year's budget includes MAP components with $186 million for
refining operations, $253 million for marketing and another $124 million for
supply and transportation related activities. At the Garyville, Louisiana
refinery, construction of polymer grade propylene facilities is scheduled to be
completed and operating by late third quarter of this year. Marathon has a 62
percent interest in MAP.
Marathon Oil Company is a part of the USX-Marathon Group (NYSE: MRO), a
unit of USX Corporation.
* * * * *
This release contains forward-looking statements with respect to expected
capital, investment and exploration expenditures, liquid hydrocarbon and natural
gas production, and commencement of production from new fields. This forward-
looking information is based on certain assumptions including (among others)
production levels, prices, worldwide supply and demand for petroleum products,
regulatory constraints, production decline rates of mature fields, timing and
results of future development drilling, levels of company cash flow, and other
geological operating and economic considerations. This forward-looking
information may prove to be inaccurate and actual results may differ
significantly from those presently anticipated. In accordance with "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, USX
has included in the Annual Report on Form 10-K, for the period ending December
31, 1997, and subsequent quarterly reports, cautionary language identifying
other important factors, though not necessarily all such factors, that could
cause future outcomes to differ from those set forth in forward-looking
statements.
<TABLE>
<CAPTION>
Exhibit 12.1
USX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
TOTAL ENTERPRISE BASIS - (Unaudited)
Continuing Operations
----------------------------------------------------------
(Dollars in Millions)
First Quarter
Ended Year Ended December 31
March 31 --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Portion of rentals
representing interest $26 $19 $82 $78 $76 $83 $81
Capitalized interest 9 4 31 11 13 58 105
Other interest and fixed
charges 75 85 312 382 452 456 365
Pretax earnings which would
be required to cover
preferred stock dividend
requirements of parent 4 9 20 36 46 49 44
---- ---- ---- ---- ---- ---- ----
Combined fixed charges
and preferred stock
dividends (A) $114 $117 $445 $507 $587 $646 $595
==== ==== ==== ==== ==== ==== ====
Earnings-pretax income
with applicable
adjustments (B) $579 $396 $1745 $1837 $877 $1300 $239
==== ==== ==== ==== ==== ==== ====
Ratio of (B) to (A) 5.08 3.38 3.92 3.62 1.49 2.01 (a)
==== ==== ==== ==== ==== ==== ====
<FN>
(a) Earnings did not cover combined fixed charges and preferred stock
dividends by $356 million for 1993.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12.1
USX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
TOTAL ENTERPRISE BASIS - (Unaudited)
Continuing Operations
----------------------------------------------------------
(Dollars in Millions)
Six Months
Ended Year Ended December 31
June 30 --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Portion of rentals
representing interest $50 $40 $82 $78 $76 $83 $81
Capitalized interest 23 10 31 11 13 58 105
Other interest and fixed
charges 150 167 312 382 452 456 365
Pretax earnings which would
be required to cover
preferred stock dividend
requirements of parent 8 13 20 36 46 49 44
---- ---- ---- ---- ---- ---- ----
Combined fixed charges
and preferred stock
dividends (A) $231 $230 $445 $507 $587 $646 $595
==== ==== ==== ==== ==== ==== ====
Earnings-pretax income
with applicable
adjustments (B) $1265 $826 $1745 $1837 $877 $1300 $239
==== ==== ==== ==== ==== ==== ====
Ratio of (B) to (A) 5.48 3.59 3.92 3.62 1.49 2.01 (a)
==== ==== ==== ==== ==== ==== ====
<FN>
(a) Earnings did not cover combined fixed charges and preferred stock
dividends by $356 million for 1993.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12.1
USX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
TOTAL ENTERPRISE BASIS - (Unaudited)
Continuing Operations
----------------------------------------------------------
(Dollars in Millions)
Nine Months
Ended Year Ended December 31
September 30 --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Portion of rentals
representing interest $76 $60 $82 $78 $76 $83 $81
Capitalized interest 35 16 31 11 13 58 105
Other interest and fixed
charges 240 243 312 382 452 456 365
Pretax earnings which would
be required to cover
preferred stock dividend
requirements of parent 12 17 20 36 46 49 44
---- ---- ---- ---- ---- ---- ----
Combined fixed charges
and preferred stock
dividends (A) $363 $336 $445 $507 $587 $646 $595
==== ==== ==== ==== ==== ==== ====
Earnings-pretax income
with applicable
adjustments (B) $1625 $1386 $1745 $1837 $877 $1300 $239
==== ==== ==== ==== ==== ==== ====
Ratio of (B) to (A) 4.48 4.13 3.92 3.62 1.49 2.01 (a)
==== ==== ==== ==== ==== ==== ====
<FN>
(a) Earnings did not cover combined fixed charges and preferred stock
dividends by $356 million for 1993.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12.2
USX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
TOTAL ENTERPRISE BASIS - (Unaudited)
Continuing Operations
-------------------------------------------------
(Dollars in Millions)
First Quarter
Ended Year Ended December 31
March 31 --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Portion of rentals
representing interest $26 $19 $82 $78 $76 $83 $81
Capitalized interest 9 4 31 11 13 58 105
Other interest and fixed
charges 75 85 312 382 452 456 365
---- ---- ---- ---- ----- ---- ----
Total fixed charges (A) $110 $108 $425 $471 $541 $597 $551
==== ==== ==== ==== ==== ==== ====
Earnings-pretax income
with applicable
adjustments (B) $579 $396 $1745 $1837 $877 $1300 $239
==== ==== ==== ==== ==== ==== ====
Ratio of (B) to (A) 5.26 3.67 4.11 3.90 1.62 2.18 (a)
==== ==== ==== ==== ==== ==== ====
<FN>
(a) Earnings did not cover fixed charges by $312 million for 1993.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12.2
USX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
TOTAL ENTERPRISE BASIS - (Unaudited)
Continuing Operations
-------------------------------------------------
(Dollars in Millions)
Six Months
Ended Year Ended December 31
June 30 --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Portion of rentals
representing interest $50 $40 $82 $78 $76 $83 $81
Capitalized interest 23 10 31 11 13 58 105
Other interest and fixed
charges 150 167 312 382 452 456 365
---- ---- ---- ---- ----- ---- ----
Total fixed charges (A) $223 $217 $425 $471 $541 $597 $551
==== ==== ==== ==== ==== ==== ====
Earnings-pretax income
with applicable
adjustments (B) $1265 $826 $1745 $1837 $877 $1300 $239
==== ==== ==== ==== ==== ==== ====
Ratio of (B) to (A) 5.67 3.81 4.11 3.90 1.62 2.18 (a)
==== ==== ==== ==== ==== ==== ====
<FN>
(a) Earnings did not cover fixed charges by $312 million for 1993.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 12.2
USX CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
TOTAL ENTERPRISE BASIS - (Unaudited)
Continuing Operations
-------------------------------------------------
(Dollars in Millions)
Nine Months
Ended Year Ended December 31
September 30 --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Portion of rentals
representing interest $76 $60 $82 $78 $76 $83 $81
Capitalized interest 35 16 31 11 13 58 105
Other interest and fixed
charges 240 243 312 382 452 456 365
---- ---- ---- ---- ----- ---- ----
Total fixed charges (A) $351 $319 $425 $471 $541 $597 $551
==== ==== ==== ==== ==== ==== ====
Earnings-pretax income
with applicable
adjustments (B) $1625 $1386 $1745 $1837 $877 $1300 $239
==== ==== ==== ==== ==== ==== ====
Ratio of (B) to (A) 4.63 4.34 4.11 3.90 1.62 2.18 (a)
==== ==== ==== ==== ==== ==== ====
<FN>
(a) Earnings did not cover fixed charges by $312 million for 1993.
</TABLE>
