1
EXHIBIT 99.2
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX ANNOUNCES FOURTH QUARTER AND FULL YEAR
U. S. STEEL GROUP FINANCIAL RESULTS
PITTSBURGH, January 21, 1994 -- Boosted by strong market
demand and excellent production performance, USX Corporation
today reported fourth quarter 1993 net income for its U. S.
Steel Group (NYSE:X) of $124 million, or $1.67 per share.
Fourth quarter 1993 net income included the favorable effect of
the reversal of certain litigation accruals and the realization
of income resulting from the collection of a subordinated note
related to the 1988 sale of Transtar, Inc. This was partially
offset by restructuring charges relating to coal facilities,
current period costs related to the adoption of Statement of
Financial Accounting Standards (SFAS) No. 112 -- Employers'
Accounting for Postemployment Benefits, certain charges
recorded by equity affiliates, certain charges related to prior
periods and several 1993 tax provision adjustments. The
estimated favorable aftertax effect of these items totaled $83
million. The U. S. Steel Group's net loss for the fourth
quarter of 1992 was $225 million, or $3.80 per share, which
included an estimated $166 million for the aftertax effect of
certain legal, environmental and other contingency accruals,
provisions for loan losses, restructuring charges, market
value provisions for foreclosed real estate assets and certain
other charges related to prior periods.
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Sales totaled $1.5 billion in the fourth quarter of
1993, up 28% from the fourth quarter of 1992.
Operating income for the fourth quarter of 1993 was
$137 million, compared with a restated operating loss of $288
million in fourth quarter of 1992. Fourth quarter 1993
operating income included the favorable effects of the
reversal of $109 million of accruals relating to the Bessemer
and Lake Erie Railroad (B&LE) litigation and Energy Buyers
litigation partially offset by restructuring charges of $42
million relating to the planned shutdown of the Maple Creek
Mine in southwestern Pennsylvania, the $6 million current
period effect of adopting SFAS No. 112 and aggregate pre-tax
charges of approximately $14 million for a number of items
including utility charges and property tax assessments related
to prior periods, and certain contingency accruals. Operating
income for the fourth quarter of 1992 included charges
totaling $264 million for certain legal, environmental and
other contingent liabilities, provisions for loan losses
related to USX Credit, completion of the 1992 restructuring
plan related to steel facilities, market value provisions for
foreclosed real estate assets and certain charges related to
prior periods.
USX Board Chairman Charles A. Corry said, "Fourth
quarter 1993 results for our U. S. Steel Group benefited from
the combination of a strengthening steel market and strong
steel production performance throughout our flat rolled
operations."
Other income for the fourth quarter of 1993 included a
pretax benefit of $70 million from the realization of income
resulting from the collection of a subordinated note related
to the 1988 sale of Transtar, Inc. and certain charges totaling
$7 million recorded by equity
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affiliates. Fourth quarter 1993 net interest and other financial
income reflected a $31 million pretax benefit from the reversal
of interest accruals related to litigation and $37 million of
interest income on the Transtar note.
U. S. Steel's fourth quarter 1993 shipments were 2.7
million net tons, up 18% over the 2.3 million-ton shipment
level in the fourth quarter of 1992. Shipments in 1993 were
10 million tons, up from the 8.9 million tons shipped in the
previous year.
The fourth quarter 1993 results reflected improved
production performance over the previous year at virtually all
U. S. Steel plants, with several significant production
records established.
The Mon Valley Works continuous caster continued its
excellent start-up in the fourth quarter, producing 674,000
tons. In August, the facility achieved a milestone by
producing two million tons of slabs in its initial year of
operation.
Record production levels were also achieved during the
quarter at U. S. Steel's Gary, Indiana, Works and at the
Fairfield, Alabama, Works. Gary's continuous caster complex
established new annual casting records, producing 6.6 million
tons for all of 1993.
Gary Works' hot strip mill rolled 1.4 million tons in
the fourth quarter, helping that facility set a new annual
tonnage record of 5.4 million tons. Gary's five-stand cold
reduction mill also established a record in 1993 with 2.4
million tons processed.
Fairfield's continuous slab and bloom casting
facilities broke their previous production record in 1993 by
casting a total of 2.2 million tons.
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"Our employees and facilities responded in excellent
fashion to the strong market demand in the fourth quarter with
high levels of production and excellent quality and shipment
performance," Corry said. "Financial results for the quarter
also reflect the success of ongoing efforts to reduce
operating costs."
Corry continued, "The market outlook is solid, with
order book levels high through the first quarter. U. S. Steel
forecasts 1994 domestic industry shipments of 89 million to 90
million tons, up from estimated 1993 shipments of 88 million
tons. Flat-rolled markets key to U. S. Steel's commercial
strategies remain strong -- most notably automotive.
Construction, appliance and tin mill markets also remain
strong."
Corry noted, "The strong domestic market, coupled with
ongoing soft market conditions in Europe and Japan, raise
potential concerns about rising steel imports. Although there
are no indications of a major surge, steel imports into the
U.S. have been on the rise for several months." Corry
concluded, "It remains important for the industry and the
U.S. Government to be on watch for a new glut of unfairly traded
imports."
For the year 1993, the U. S. Steel Group recorded a loss
before the cumulative effect of changes in accounting
principles of $169 million, or $2.96 per share, which included
a $325 million net unfavorable effect from charges for the
B&LE litigation. This compares with a 1992 net loss before
the cumulative effect of changes in accounting principles of
$271 million, or $4.92 per share. Sales were $5.6 billion in
1993 compared with $4.9 billion in 1992. The net loss for the
year 1993 totaled $238 million, or $4.04 per share, which
included the $69 million unfavorable effect of
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adopting SFAS No. 112 -- Employers' Accounting for
Postemployment Benefits. The cumulative effect of adopting
the standard was reported as a change in accounting principle
and reflected as a restatement of the U. S. Steel Group's
previously reported first quarter 1993 net income. The net
loss for 1992 was $1.606 billion, or $28.85 per share, which
included the $1.335 billion combined unfavorable cumulative
noncash effects of adopting SFAS No. 106 and SFAS No. 109.
For the year 1993, the U. S. Steel Group reported an
operating loss of $149 million, compared with a restated 1992
operating loss of $241 million. The operating loss in the 1993
period included $364 million for the net unfavorable effects
of the B&LE and Energy Buyers litigations, restructuring
charges, current period costs related to the adoption of SFAS
No. 112, certain litigation and environmental charges and the
favorable effect of the utilization of insurance reserves to
pay certain employee insurance benefits. Operating income in
1992 included charges totaling $273 million for certain legal,
environmental and other contingent liabilities, provisions for
loan losses related to USX Credit, restructuring charges and
market value provisions for foreclosed real estate assets.
* * * * * * * *
Supplemental statistics and condensed financial
statements for the U. S. Steel Group and condensed
consolidated financial statements for USX Corporation are
attached.
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U. S. STEEL GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992* 1993 1992*
- -------------------------------------------------------------------------------------
SALES................................................ $1,548 $1,214 $5,612 $ 4,919
Total operating costs................................ (1,411) (1,502) (5,761) (5,160)
------ ------ ------ -------
Operating income (loss).............................. 137 (288) (149) (241)
Other income......................................... 77 2 210 5
Net interest and other financial income (costs)...... 35 (40) (271) (158)
------ ------ ------ -------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES............................ 249 (326) (210) (394)
Less provision (credit) for estimated
U.S. and foreign income taxes.................... 125 (101) (41) (123)
------ ------ ------ -------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING
PRINCIPLES....................................... 124 (225) (169) (271)
Cumulative effect of changes in
accounting principles............................ - - (69) (1,335)
------ ------ ------ -------
NET INCOME (LOSS).................................... 124 (225) (238) (1,606)
Dividends on preferred stock......................... (5) (1) (21) (3)
------ ------ ------ -------
NET INCOME (LOSS) APPLICABLE TO STEEL
STOCK............................................ $119 $(226) $(259) $(1,609)
====== ====== ====== =======
Per common share data:
Weighted average shares, in thousands:
- Primary.................................... 70,311 59,551 64,370 55,764
- Fully diluted.............................. 81,233 59,551 64,370 55,764
Primary:
Total income (loss) before cumulative effect
of changes in accounting principles........ $1.67 $(3.80) $(2.96) $(4.92)
Cumulative effect of changes in
accounting principles...................... - - (1.08) (23.93)
Net income (loss)............................ 1.67 (3.80) (4.04) (28.85)
Fully diluted:
Total income (loss) before cumulative effect
of changes in accounting principles........ $1.53 $(3.80) $(2.96) $(4.92)
Cumulative effect of changes in
accounting principles...................... - - (1.08) (23.93)
Net income (loss)............................ 1.53 (3.80) (4.04) (28.85)
Dividends paid............................... .25 .25 1.00 1.00
<FN>
* Certain reclassifications of data have been made to conform to 1993 classifications.
The following notes are an integral part of these financial statements.
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U. S. STEEL GROUP OF USX CORPORATION
CONDENSED BALANCE SHEET (Unaudited)
December 31 December 31
(In Millions) 1993 1992 1993 1992
- -------------------------------------------------------------------------------
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents........ $ 79 $ 22 Current liabilities..... $1,621 $1,263
Receivables - net..... 596 447 Long-term debt.......... 1,540 2,132
Inventories........... 629 644 Other liabilities....... 2,785 2,609
Other current assets.. 271 208
----- ----- ----- -----
Total current assets 1,575 1,321 Total liabilities 5,946 6,004
Property, plant and Preferred stock........ 32 25
equipment - net...... 2,653 2,809 Common stockholders'
Other assets.......... 2,335 2,121 equity............... 585 222
----- ----- ----- -----
Total............... $6,563 $6,251 Total................. $6,563 $6,251
===== ===== ===== =====
<FN>
Revised January 25, 1994 to reflect minor reclassifications.
The following notes are an integral part of these financial statements.
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U. S. STEEL GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
The condensed financial statements of the U. S. Steel Group include the results
of operations and financial position for all businesses of USX other than the
businesses, assets and liabilities included in the Marathon Group or the Delhi
Group, and a portion of the corporate assets, liabilities and related
transactions that are not separately identified with ongoing operating units of
USX. These condensed financial statements should be read in connection with
the condensed consolidated financial statements of USX.
USX adopted a new accounting standard in the fourth quarter of 1993, which
resulted in restatement of the first nine months of 1993. Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," requires employers to recognize the obligation to
provide postemployment benefits on an accrual basis if certain conditions are
met. The cumulative effect of adopting this standard is reported as a change in
accounting principle effective January1,1993, and decreased 19 93 net income
of the U. S. Steel Group by $69 million. The increase to 1993 operating costs
as a result of adopting this standard was $21 million.
In 1992, USX adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS No.106), and Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109). The cumulative effect of these
changes in accounting principles decreased first quarter 1992 net income of the
U. S. Steel Group by $1.159 billion, net of $678 million income tax effect, for
SFAS No. 106 and $176 million for SFAS No. 109.
Pretax loss in 1993 included a $506 million charge ($127 million credit in the
fourth quarter) related to an adverse decision in the Lower Lake Erie Ore
Antitrust Litigation against a former USX subsidiary, the Bessemer & Lake Erie
Railroad (B&LE). Charges of $342 million were included in operating costs ($96
million credit in the fourth quarter) and $164 million included in net interest
and other financial costs ($31 million credit in the fourth quarter). The
effect on 1993 net loss was $325 million unfa vorable ($5.04 per share) for
1993.
Operating income in the fourth quarter of 1993 included a restructuring charge
of $42 million for the planned permanent closure of a Pennsylvania coal mine.
In the fourth quarter of 1992, operating income included a $10 million
restructuring charge.
Other income in 1993 included a pretax gain of $216 million from disposal of
assets ($77 million in the fourth quarter), primarily related to the sale of
Cumberland Coal Mine, an investment in an insurance company and the fourth
quarter gain from the realization of proceeds from a subordinated note related
to the 1988 sale of Transtar, Inc. The collection of the Transtar note also
resulted in $37 million of interest income.
The provision for estimated U.S. and foreign income taxes for interim periods
is based on tax rates and amounts which recognize management's best estimate of
current and deferred tax assets and liabilities in accordance with USX's tax
allocation policy. The 1993 U.S. income tax provision included a $15 million
favorable effect associated with an increase in the federal income tax rate
from 34% to 35%, reflecting remeasurement of deferred income tax assets as of
January 1, 1993. Adjustments to the fourth q uarter 1993 tax provision relate
primarily to prior years' Internal Revenue Service examinations and the
establishment of valuation allowances for certain tax credits which USX is not
expected to be able to fully utilize.
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U. S. STEEL GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
(Continued)
In 1993, USX sold 10,000,000 shares of USX-U. S. Steel Group Common Stock to
the public for net proceeds of $350 million, which have been reflected in their
entirety in the financial statements of the U. S. Steel Group.
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
per share) to the public for net proceeds of $336 million which have been
reflected in their entirety in the financial statements of the U. S. Steel
Group. The Convertible Preferred Stock is convertible at any time into shares
of Steel Stock at a conversion price of $46.125 per share of Steel Stock.
January 21, 1994
10
U. S. STEEL GROUP OF USX CORPORATION
SUPPLEMENTAL STATISTICS
($'s in Millions)
Fourth Quarter Year
Ended Ended
December 31 December 31
--------------- --------------
1993 1992 1993 1992
------- ------ ------ ------
SALES(A)
Steel and Related Businesses (B) $1,489 $1,210 $5,422 $4,752
Other Businesses (C) 59 4 190 167
------ ------ ------ ------
Total U. S. Steel Group $1,548 $1,214 $5,612 $4,919
====== ====== ====== ======
OPERATING INCOME (LOSS) (A)
Steel and Related Businesses (B) $ 48 $ (115) $ 123 (140)
Other Businesses (C) (11) (64) (29) (96)
Administrative (D) 46 (99) 141 5
Special Items: B&LE Litigation 96 - (342) -
Restructuring (42) (10) (42) (10)
----- ------ ------ -----
Total U. S. Steel Group $ 137 $ (288) $ (149) $ (241)
====== ====== ====== ======
CAPITAL SPENDING
Total U. S. Steel Group $ 62 $ 56 $ 198 $ 298
Steel Joint Ventures $ 10 $ 19 $ 29 $ 60
OPERATING STATISTICS
Public & Affil. Shipments (E) 2,685 2,283 9,969 8,854
Raw SteelProduction (E) 2,926 2,495 11,334 10,435
Raw SteelCapability Utilization 98.0% 83.7% 95.6% 85.9%
<FN>
(A) Sales and operating income (loss) for 1992 were reclassified to
conform to 1993 classifications.
(B) 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.
(C) Includes real estate; fencing products; leasing and financing
activities; and titanium metal products.
(D) Includes pension credits, other postretirement benefit costs and
certain other expenses principally attributable to former
business units of the U. S. Steel Group as well as the portion of
USX corporate general and administrative costs allocated to the
U. S. Steel Group.
(E) Thousands of net tons
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USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992* 1993 1992*
- -----------------------------------------------------------------------------------------------------------
SALES................................... $4,604 $4,575 $18,064 $17,813
Total operating costs................... (4,576) (4,960) (18,008) (17,743)
------- ------- -------- --------
Operating income (loss)................. 28 (385) 56 70
Other income (loss)..................... 102 (2) 257 (2)
Net interest and other
financial costs........................ (40) (116) (552) (257)
------- ------- -------- --------
TOTAL INCOME (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES.................. 90 (503) (239) (189)
Less provision (credit) for estimated
income taxes
- United States...................... (12) (171) (156) (64)
- Foreign............................ 65 11 84 35
------- ------- -------- --------
TOTAL INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING
PRINCIPLES............................. 37 (343) (167) (160)
Cumulative effect of changes in
accounting principles.................. - - (92) (1,666)
------- ------- -------- --------
NET INCOME (LOSS)....................... 37 (343) (259) (1,826)
Dividends on preferred stock (7) (2) (27) (9)
------- ------- -------- --------
NET INCOME (LOSS) APPLICABLE TO COMMON
STOCKS................................. $ 30 $ (345) $ (286) $(1,835)
====== ====== ======= =======
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
December December
(In Millions) 1993 1992 1993 1992
- ------------------------------------------------------------------------------------------------------------------
ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents.............. $ 268 $ 57 Current liabilities........... $ 3,334 $ 3,470
Receivables - net......... 932 924 Long-term debt................ 5,888 5,968
Inventories............... 1,626 1,930 Other liabilities............. 4,234 4,105
Other current assets...... 354 189
----- ----- ------ ------
Total Assets............ 3,180 3,100 Total liabilities........... 13,456 13,543
Property, plant and Preferred stock............... 112 105
equipment - net.......... 11,603 11,759 Common stockholders'
Other assets.............. 2,537 2,393 equity....................... 3,752 3,604
----- ----- ------ ------
Total................... $17,320 $17,252 Total....................... $17,320 $17,252
======= ======= ======= =======
<FN>
* Certain reclassifications of data have been made to conform to 1993
classifications.
The following common share data and notes are an integral part of these
financial statements.
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USX CORPORATION AND SUBSIDIARY COMPANIES
COMMON SHARE DATA (Unaudited)
Fourth Quarter Year
Ended Ended
December 31 December 31
(In Millions Except Per Share Data) 1993 1992 1993 1992
- -----------------------------------------------------------------------------------
Common share data - Marathon Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Marathon Stock................. $ (90) $(121) $ (12) $ 103
--Per share - primary and fully diluted...... (.31) (.42) (.04) .37
Cumulative effect of changes in accounting
principles................................... - - (23) (331)
--Per share - primary and fully diluted...... - - (.08) (1.17)
Net income (loss) applicable to Marathon
Stock........................................ (90) (121) (35) (228)
--Per share - primary and fully diluted...... (.31) (.42) (.12) (.80)
Dividends paid per share....................... .17 .17 .68 1.22
Common share data - Steel Stock
Total income (loss) before cumulative effect
of changes in accounting principles
applicable to Steel Stock.................... $ 119 $ (226) $(190) $ (274)
--Per share - primary........................ 1.67 (3.80) (2.96) (4.92)
- fully diluted.................. 1.53 (3.80) (2.96) (4.92)
Cumulative effect of changes in accounting
principles................................... - - (69) (1,335)
--Per share - primary........................ - - (1.08) (23.93)
- fully diluted.............................. - - (1.08) (23.93)
Net income (loss) applicable to Steel
Stock........................................ 119 (226) (259) (1,609)
--Per share - primary........................ 1.67 (3.80) (4.04) (28.85)
- fully diluted.................. 1.53 (3.80) (4.04) (28.85)
Dividends paid per share....................... .25 .25 1.00 1.00
Common share data - Delhi Stock
Net income applicable to outstanding Delhi
Stock........................................ $ 1.4 $ 2.0 $ 7.8
--Per share - primary and fully diluted ..... .15 .22 .86
Dividends paid per share....................... .05 .05 .20
<FN>
The following notes are an integral part of these financial statements.
13
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information for the Marathon Group, the U. S. Steel Group and the
Delhi Group, taken together, includes all accounts which comprise the
corresponding consolidated financial information for USX.
USX adopted two new accounting standards in the fourth quarter of 1993 which
resulted in restatement of the first nine months of 1993. Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," requires employers to recognize the obligation to
provide postemployment benefits on an accrual basis if certain conditions are
met. The cumulative effect of adopting this standard is reported as a change
in accounting principle effective January 1, 1993, and decreased net income by
$86 million, net of $50 million income tax effect. The increase to 1993
operating costs as a result of adopting this standard was $23 million.
The second accounting standard, Emerging Issues Task Force (EITF) Consensus
No.93-14, "Accounting for Multiple-Year Retrospectively Rated Insurance
Contracts," requires accrual of retrospective premium adjustments when the
insured has an obligation to pay cash to the insurer that would not have been
required absent experience under the contract. The cumulative effect of this
change in accounting principle determined as of January 1, 1993, decreased net
income by $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 No.106), and Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109). The cumulative effect of these
changes in accounting principles decreased first quarter 1992 net income by
$1.306 billion, net of $764 million income tax effect, for SFAS No. 106 and
$360 million for SFAS No.109.
Pretax income (loss) in 1993 included a $506 million charge ($127 million
credit in the fourth quarter) related to an adverse decision in the Lower Lake
Erie Iron Ore Antitrust Litigation against a former USX subsidiary, the
Bessemer & Lake Erie Railroad. Charges of $342 million were included in
operating costs ($96 million credit in the fourth quarter) and $164 million
included in net interest and other financial costs ($31 million credit in the
fourth quarter). The effect on 1993 net income (loss) was $ 325 million
unfavorable ($5.04 per share of Steel Stock) for 1993.
Changes in the inventory market valuation reserve resulted in a $241 million
charge against operating income in 1993 ($187 million charge in the fourth
quarter) and a $62 million credit to operating income in 1992 ($98 million
charge in the fourth quarter).
Operating income in the fourth quarter of 1993 included a restructuring charge
of $42 million for the planned permanent closure of a Pennsylvania coal mine.
In 1992, operating income included restructuring charges of $125 million ($10
million in the fourth quarter).
Pretax income (loss) in 1992 included the settlement of a production tax refund
claim for the years 1982 through 1985. The refund resulted in credits to
operating income of $119 million and interest income of $177 million in the
second quarter of 1992.
14
USX CORPORATION AND SUBSIDIARY COMPANIES
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Other income in 1993 included pretax gains of $253 million from disposal of
assets ($102 million in the fourth quarter), primarily related to the sale of
the Cumberland Coal Mine, an investment in an insurance company and the fourth
quarter gain from the realization of proceeds from a subordinated note related
to the 1988 sale of Transtar, Inc. The collection of the Transtar note also
resulted in $37 million of interest income. Other income in 1992 included a
$19 million charge for impairment of a 25% interest in a natural gas
transmission partnership.
The provision for estimated U.S. and foreign income taxes for interim periods
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. 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 income tax liabilities as of January
1, 1993. Adjustments to the fourth quarter 1993 tax provision relate primarily
to prior years' Internal Revenue Service examinations and the establishment of
valuation allowances for certain tax credits which USX is not expected to be
able to fully utilize.
In 1993, USX sold 10,000,000 shares of Steel Stock to the public for net
proceeds of $350 million.
In 1993, USX also sold 6,900,000 shares of 6.50% Cumulative Convertible
Preferred Stock (stated value of $1.00 per share; initial liquidation
preference of $50 per share) to the public for net proceeds of $336 million.
The Convertible Preferred Stock is convertible at any time into shares of Steel
Stock at a conversion price of $46.125 per share of Steel Stock.
On October 2, 1992, USX sold the initial 9,000,000 shares of Delhi Stock to the
public. Net income and dividends per share applicable to outstanding Delhi
Stock are presented for the periods subsequent to October 2, 1992.
The numbers of shares used in the computation of earnings per share were as
follows:
(In Thousands)
---------------------------------------------
Fourth Quarter Ended Year Ended
December 31 December 31
--------------------- -------------------
1993 1992 1993 1992
---- ---- ---- ----
Marathon Stock - primary.......... 286,582 286,276 286,594 283,494
- fully diluted.... 286,582 286,276 286,594 283,495
Steel Stock - primary............. 70,311 59,551 64,370 55,764
- fully diluted....... 81,233 59,551 64,370 55,764
Delhi Stock - primary and fully
diluted............. 9,155 9,001 9,067
January 21, 1994