Exhibit 99.1.
United States Steel Announces Filing For Exchange Offer
PITTSBURGH, Oct. 12 -- United States Steel LLC announced today that it has filed
with the Securities and Exchange Commission a Registration Statement relating to
the issuance of up to $365 million of Senior Quarterly Income Debt Securities
due 2031 ("SQUIDS") to be offered in exchange for outstanding 6.5% Cumulative
Convertible Preferred Stock of USX Corporation, 6.75% Convertible Cumulative
Quarterly Income Preferred Securities of USX Capital Trust I and 8.75%
Cumulative Monthly Income Preferred Shares, Series A of USX Capital LLC. The
total face amount outstanding of the three securities is approximately $568
million and if more than $365 million face amount is tendered, there will be a
proration.
Pending the separation of U.S. Steel and Marathon, the SQUIDS will be
unconditionally guaranteed by USX Corporation. Upon the separation, the USX
guarantee will no longer be applicable and United States Steel will be the sole
obligor of the SQUIDS.
The Dealer Manager for the exchange offers is Goldman, Sachs & Co.
The Prospectus that is part of the Registration Statement contains the following
updated Outlook for United States Steel:
While over the last few months domestic orders for steel had strengthened and
prices had stabilized, our order rate for the fourth quarter is currently
running lower than our third quarter rate. In the third quarter, Domestic Steel
shipments totaled 2.6 million net tons and average realized prices were lower
than the second quarter primarily due to changes in mix, including decreased
sales of tubular and plate products. In the fourth quarter, we expect Domestic
Steel shipments to be approximately 2.3 million net tons and average realized
prices to be about flat compared to the third quarter. In light of expected slow
market conditions in the fourth quarter, we plan to advance the schedule for a
maintenance outage on the Gary Works No. 6 blast furnace.
On May 31, 2001, a major fire damaged the cold-rolling mill at USS-POSCO,
which is fifty percent owned by United States Steel. Damage was predominantly
limited to the cold-rolling mill area of the plant. USS-POSCO maintains
insurance coverage against such losses, including coverage for business
interruption. The mill is expected to resume production in the first quarter of
2002, although full production may not be achieved until mid-2002. Until such
time, the plant will continue customer shipments using cold-rolled coils from
United States Steel and POSCO as substitute feedstock.
For USSK, third quarter shipments totaled approximately 1.0 million net
tons, down slightly from shipments of 1.1 million net tons in the second
quarter, and average realized prices were higher than in the second quarter. In
the fourth quarter, we expect shipments to be slightly lower than in the third
quarter and average realized prices to be comparable to the third quarter. Based
on continued improvement in production performance since acquisition, USSK raw
steel production capability for the second half of 2001 has been increased to
2.5 million net tons, for an annualized rate of 5.0 million net tons.
For the full year 2001, total shipments are expected to be approximately
13.5 to 13.8 million net tons with Domestic Steel shipments of approximately 10
million net tons and USSK shipments of approximately 3.5 to 3.8 million net
tons.
For the longer term, domestic shipment levels and realized prices will be
influenced by the strength and timing of a recovery in the manufacturing sector
of the domestic economy, levels of imported steel and production capability
changes by domestic competitors. Many factors, including developments flowing
from the events of September 11, will determine the strength and timing of such
recovery and the other factors. For USSK, economic and political developments in
Europe and elsewhere will impact USSK's results of operations in 2002 and
thereafter.
United States Steel owns a 16% equity method investment in Republic
Technologies International, LLC (``Republic'') through USX's ownership in
Republic Technologies International Holdings, LLC, which is the sole owner of
Republic. Republic is a major purchaser of raw materials from United States
Steel and the primary supplier of rounds for Lorain Tubular. On April 2, 2001,
Republic filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
Republic has continued to supply the Lorain mill since filing for bankruptcy and
no supply interruptions are anticipated. United States Steel's carrying value of
this investment in Republic has been reduced to zero. Upon Republic's filing for
bankruptcy, United States Steel accrued a charge for a substantial portion of
the receivables due from Republic. At June 30, 2001, United States Steel's
remaining pre-petition financial exposure to Republic, after recording various
losses and reserves, totaled approximately $30 million.
The above discussion includes forward-looking statements concerning
shipments, pricing, and equity investee performance. These statements are based
on assumptions as to future product demand, prices and mix, and production.
Steel shipments and prices can be affected by imports and actions of the U.S.
Government and its agencies pertaining to trade, domestic and international
economies, domestic production capacity, and customer demand. Factors which may
affect USSK results are similar to domestic factors, including excess world
supply and foreign currency fluctuations, and also can be influenced by matters
peculiar to international marketing such as tariffs. In the event these
assumptions prove to be inaccurate, actual results may differ significantly from
those presently anticipated.
oOo
A registration statement and a tender offer statement relating to these
securities have been filed with the Securities and Exchange Commission but the
registration statement has not yet become effective. These securities may not be
sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This press release shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such State.
Holders of any of the securities that are the subject of the exchange offers are
advised to read the registration and tender offer statements because they
contain important information. Such holders may obtain a free copy of the
registration and tender offer statements, and other documents filed by USX
Corporation and United States Steel LLC with the Securities and Exchange
Commission, at the Securities and Exchange Commission's website at www.sec.gov.
After the registration statement becomes effective, such holders may also obtain
a free copy of the prospectus contained in the registration and tender offer
statements from USX Corporation, Shareholder Services, 600 Grant Street, Room
611, Pittsburgh, Pennsylvania 15219-4776. Phone (412)433-4801, (866)433-4801
(toll free), (412) 433-4818 (fax).