Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
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USX CORPORATION REPORTS HIGHER SECOND QUARTER
RESULTS FOR ITS U. S. STEEL GROUP
PITTSBURGH, July 18, 1995 -- USX Corporation reported second quarter 1995
net income for its U. S. Steel Group (NYSE:X) of $81 million, or 99 cents per
share, on sales of $1.6 billion. The results represent a substantial
improvement over second quarter 1994 net income of $56 million, or 65 cents per
share, on sales of $1.5 billion.
The Steel Group's second quarter 1995 results included a $35 million
unfavorable estimated aftertax effect of charges related to the Pickering v. USX
litigation which arose out of the sale of USX's Geneva (Utah) Works in 1987 and
costs associated with repair work on the Gary Works' No. 8 blast furnace. The
furnace, which is expected to be back on line in mid-August, was extensively
damaged by an explosion on April 5. Second quarter 1994 results included no
significant special items.
Operating income in the second quarter of 1995 from Steel and Related
Businesses, excluding $56 million in pretax charges related to the Pickering v.
USX litigation and the blast furnace repair work, totaled $160 million, or $58
per ton, on steel shipments of 2.8 million tons, compared with $64 million, or
$24 per ton, on steel shipments of 2.6 million tons in the second quarter of
1994. Additional pretax charges of approximately $10 million to complete the
repairs to the blast furnace are expected to negatively impact third quarter
1995 operating income.
2
USX Board Chairman Thomas J. Usher noted that despite the blast furnace
outage, the Steel Group produced more than 3 million tons of raw steel in the
second quarter, compared with 2.9 million tons in the second quarter of 1994.
He added that U. S. Steel's improved results over second quarter 1994 also
reflected higher transaction prices from a year ago and an improved market for
tubular goods.
The USX chairman noted, however, that, a combination of the seasonally
slow third quarter, the growing domestic supply base, inventory build-ups by
many customers, and a sustained high level of steel imports will continue to
apply competitive pressure on flat-rolled steel sales. Nevertheless,
comparatively high levels of domestic steel consumption, along with strong
export demand, are expected to keep U. S. Steel's facilities running at high
utilization rates for the balance of the year.
"Despite continued strong demand, we believe competitive success will
require ongoing attention to cost-reduction, quality and service," Usher said.
"The U. S. Steel Group is committed to continuing its impressive progress in
each of those areas as demonstrated by 33 METALPRODUCING magazine's 1995 TOP
(Top Operations & Plants) Award which was recently awarded to the Mon Valley
Works." This award recognizes facilities which have distinguished themselves as
low-cost international competitors with world-class processes, product quality
and customer service.
3
* * * * * * *
Statement of operations and supplemental statistics for the U. S. Steel
Group and consolidated statement of operations for USX Corporation are attached.
Consolidated net income for USX Corporation was $190 million in the second
quarter of 1995, compared with $107 million in the second quarter of 1994.
U. S. STEEL GROUP OF USX CORPORATION
STATEMENT OF OPERATIONS (Unaudited)
Second Quarter Six Months
Ended Ended
June 30 June 30
(Dollars in millions, except per share data) 1995 1994 1995 1994
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SALES $1,623 $1,534 $3,200 $2,918
OPERATING COSTS:
Cost of sales (excludes items shown below) 1,393 1,343 2,741 2,646
Selling, general and administrative
expenses (credits) (32) (31) (69) (61)
Depreciation, depletion and amortization 84 80 161 158
Taxes other than income taxes 49 54 104 111
------- ------- ------- -------
Total operating costs 1,494 1,446 2,937 2,854
------- ------- ------- -------
OPERATING INCOME 129 88 263 64
Other income 26 27 45 32
Interest and other financial income 3 3 5 6
Interest and other financial costs (36) (37) (75) (75)
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 122 81 238 27
Less provision for estimated income taxes 41 25 83 6
------- ------- ------- -------
NET INCOME 81 56 155 21
Dividends on preferred stock (7) (7) (13) (13)
------- ------- ------- -------
NET INCOME APPLICABLE TO STEEL STOCK $74 $49 $142 $8
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STEEL STOCK DATA:
Net income per share
- primary $.99 $.65 $1.87 $.11
- fully diluted .95 .64 1.80 .11
Dividends paid per share .25 .25 .50 .50
Weighted average shares, in thousands:
- Primary 76,562 75,490 76,373 74,579
- Fully diluted 87,484 78,929 87,293 74,579
<FN>
The statement of operations of the U. S. Steel Group includes the results of
operations for all businesses of USX other than businesses included in the
Marathon Group or the Delhi Group and a portion of USX's net financial costs,
general and administrative costs and income taxes attributed to the three groups
in accordance with USX's accounting and tax allocation policies. This statement
should be read in connection with the consolidated statement of operations of
USX.
U. S. STEEL GROUP OF USX CORPORATION
SUPPLEMENTAL STATISTICS
($ in Millions)
Second Quarter Six Months
Ended Ended
June 30 June 30
-------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
SALES
Steel and Related Businesses (a) $1,612 $1,482 $3,161 $2,816
Other 11 52 39 102
------- ------- ------- -------
Total U. S. Steel Group $1,623 $1,534 $3,200 $2,918
OPERATING INCOME
Steel and Related Businesses (a) $104 $64 $204 $28
Administrative and Other (b) 25 24 59 36
------- ------- ------- -------
Total U. S. Steel Group $129 $88 $263 $64
CAPITAL EXPENDITURES $86 $64 $142 $108
OPERATING STATISTICS
Public & Affil. Steel Shipments (c) 2,757 2,636 5,479 5,097
Raw Steel-Production (c) 3,018 2,918 5,963 5,661
Raw Steel-Capability Utilization (d) 96.8% 97.6% 96.2% 95.2%
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<FN>
(a) Includes the production and sale of steel products, coke and taconite
pellets; domestic coal mining; the management of mineral resources; and
engineering and consulting services and technology licensing.
(b) Includes pension credits, other postretirement benefit costs and certain
other expenses principally attributable to former business units of the
U. S. Steel Group. Also includes results of real estate development and
management, and leasing and financing activities.
(c) Thousands of net tons
(d) Based on annual raw steel production capability of 12.5 million tons for
1995 and 12.0 million tons for 1994.
USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Second Quarter Six Months
Ended Ended
June 30 June 30
(Dollars in millions) 1995 1994 1995 1994
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SALES $5,278 $4,761 $10,316 $9,034
OPERATING COSTS:
Cost of sales (excludes items shown below) 3,736 3,551 7,394 6,745
Inventory market valuation charges
(credits) 2 (93) (86) (221)
Selling, general and administrative
expenses 53 64 95 119
Depreciation, depletion and amortization 300 272 590 530
Taxes other than income taxes 783 697 1,539 1,354
Exploration expenses 27 35 53 68
Restructuring charges (credits) (6) 37 (6) 37
------- ------- ------- -------
Total operating costs 4,895 4,563 9,579 8,632
------- ------- ------- -------
OPERATING INCOME 383 198 737 402
Other income 37 31 61 59
Interest and other financial income 13 2 17 11
Interest and other financial costs (132) (81) (265) (198)
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 301 150 550 274
Less provision for estimated income taxes 111 43 206 92
------- ------- ------- -------
NET INCOME 190 107 344 182
Dividends on preferred stock (8) (9) (16) (16)
------- ------- ------- -------
NET INCOME APPLICABLE TO COMMON STOCKS $182 $98 $328 $166
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The following common share data is an integral part of this financial statement.
USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
Second Quarter Six Months
Ended Ended
June 30 June 30
(Dollars in millions, except per share data) 1995 1994 1995 1994
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Applicable to Marathon Stock:
Net income $107 $70 $182 $179
--Per share - primary and fully diluted .37 .25 .63 .63
Dividends paid per share .17 .17 .34 .34
Weighted average shares, in thousands:
- Primary 287,246 286,578 287,217 286,580
- Fully diluted 293,504 286,578 287,225 286,581
APPLICABLE TO STEEL STOCK:
Net income $74 $49 $142 $8
--Per share
- primary .99 .65 1.87 .11
- fully diluted .95 .64 1.80 .11
Dividends paid per share .25 .25 .50 .50
Weighted average shares, in thousands:
- Primary 76,562 75,490 76,373 74,579
- Fully diluted 87,484 78,929 87,293 74,579
APPLICABLE TO OUTSTANDING DELHI STOCK:
Net income (loss) $1 $(21) $4 $(21)
--Per share - primary and fully diluted .12 (2.27) .42 (2.25)
Dividends paid per share .05 .05 .10 .10
Weighted average shares, in thousands:
- Primary and fully diluted 9,438 9,418 9,438 9,375