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EXHIBIT 99.1
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX CORPORATION ANNOUNCES FIRST QUARTER MARATHON GROUP FINANCIAL RESULTS
PITTSBURGH, April 26, 1994 -- USX Corporation reported Marathon Group
(NYSE:MRO) first quarter 1994 net income of $110 million, or $.38 per share, on
sales of $2.7 billion. Net income in the first quarter of 1993 was $8 million,
or $.02 per share, on sales of $3.0 billion. The results reflected a strong
improvement in downstream operating income.
The Marathon Group's first quarter 1994 net income included a $90
million favorable estimated aftertax effect of an inventory market valuation
adjustment and a gain on the sale of certain production assets. First quarter
1993 net income included the unfavorable cumulative effect of two accounting
changes and a favorable inventory market valuation adjustment, which resulted
in a net estimated aftertax charge of $9 million.
USX Corporation Board Chairman Charles A. Corry commented, "Operating
income continued to reflect an improving refined product market, which
contributed to an excellent first quarter for our downstream operations.
Upstream operating income declined, in spite of increased production volumes
and ongoing expense reductions, reflecting lower oil prices, which were more
than $4 per barrel below last year's first quarter and the lowest since the
third quarter of 1986."
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For the first quarter of 1994 the Marathon Group reported operating
income of $226 million, compared with $106 million in the first quarter of
1993. First quarter operating income for 1994 and 1993 included favorable
pretax noncash adjustments to the inventory market valuation reserve of $128
million and $23 million, respectively.
Operating income for refining, marketing and transportation, or
downstream operations, totaled $97 million in the first quarter of 1994,
compared with $32 million in the first quarter of 1993. The improvement was
mainly due to higher refined product margins primarily resulting from lower
crude costs.
Corry noted that "Marathon's tightly integrated refining and
distribution network allowed the company to meet the needs of all classes of
customers and show significant downstream income improvement despite severe
weather conditions, and a 29-day planned maintenance turnaround at its
Garyville, La. refinery. Marathon's ability to serve its customers in this
severe weather resulted in record quarter operating income for Marathon's Emro
Propane Company subsidiary."
Worldwide exploration and production, or upstream operations, had
operating income of $17 million in the first quarter of 1994, compared with $71
million in the first quarter of 1993. Domestic upstream reported operating
income of $15 million for the first quarter of 1994, compared with $61 million
in the first quarter of 1993. This decrease was primarily due to a nearly $5
per barrel decline in average crude prices, as well as increased dry well
expense, partially offset by higher average natural gas prices and reduced
production expenses. International upstream reported operating income of $2
million in the first quarter of 1994, compared with
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operating income of $10 million in the first quarter of 1993. The decrease was
primarily due to a nearly $4 per barrel decline in average crude prices,
partially offset by lower dry well expense and a 12 percent increase in liquid
hydrocarbon liftings. The increase in liftings was primarily due to the start
of production from the East Brae Field in the U.K. North Sea in late December
1993.
While Corry called exploration and production results "disappointing,"
he noted that efforts to reduce operating costs and dispose of marginal
properties "have kept both domestic and international upstream operations
profitable. Three things stand out in the first quarter: The East Brae
platform in the United Kingdom sector of the North Sea continued to progress
toward its expected peak production rate of 115,000 gross barrels per day;
natural gas sales volumes increased over last year, reflecting higher demand in
Ireland and an increased emphasis on domestic gas activity; and, after eight
years of production declines at our Yates Field in Texas, first quarter net
liquid hydrocarbon production was up over 1,300 barrels per day from last
year's first quarter." Corry stated that "Marathon's extensive application of
new and evolving reservoir management techniques have checked the decline at
Yates, which is producing now in its eighth decade and accounts for 20 percent
of Marathon's domestic liquid hydrocarbon production."
Corry noted that "Continuing low crude prices pose a serious threat to
the viability of domestic producers, who are increasingly shutting in stripper
and other marginal wells. Marathon alone had
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over 200 wells shut-in at the end of the quarter. While we remain opposed to
any form of direct subsidies or import fees, we are encouraged that
congressional and industry leaders have been working together to come up with a
program of tax incentives that will preserve marginal production, slow the loss
of jobs and help to stem the nation's increasing reliance on imports."
Other income in the first quarter of 1994 reflected a $22 million
pretax gain from the disposal of assets including the sale of certain
production assets.
* * * * * * * *
Supplemental information and statistics and condensed financial
statements for the Marathon Group and condensed consolidated financial
statements for USX Corporation are attached.
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MARATHON GROUP OF USX CORPORATION
CONDENSED STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
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SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,747 $ 2,954
Total operating costs . . . . . . . . . . . . . . . . . . . . . . . . . (2,521) (2,848)
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OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 106
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 10
Net interest and other financial costs . . . . . . . . . . . . . . . . (70) (66)
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TOTAL INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES . . . . . . . . . . . . 178 50
Less provision for estimated income taxes . . . . . . . . . . . . . . . 68 19
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TOTAL INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . 110 31
Cumulative effect of changes in accounting principles . . . . . . . . . - (23)
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NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 8
Dividends on preferred stock . . . . . . . . . . . . . . . . . . . . . (1) (2)
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NET INCOME APPLICABLE TO MARATHON STOCK . . . . . . . . . . . . . . . . $ 109 $ 6
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Per common share data:
Weighted average shares, in thousands
- Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286,582 286,610
- Fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . 292,829 286,612
Primary and fully diluted:
Total income before cumulative effect of
changes in accounting principles applicable
to Marathon Stock . . . . . . . . . . . . . . . . . . . . . . $ .38 $ .10
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . . . . . . . . . . - (.08)
Net income applicable to Marathon Stock . . . . . . . . . . . . .38 .02
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . .17 .17
*Restated as a result of the adoption of two new accounting standards.
CONDENSED BALANCE SHEET (Unaudited)
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
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ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . . . . . $ 89 $ 185 Current liabilities . . . . . $ 1,466 $ 1,668
Receivables - net . . . . . . . 331 337 Long-term debt . . . . . . . 4,013 4,239
Inventories . . . . . . . . . . 1,026 987 Other liabilities . . . . . . 2,012 1,789
Other current assets . . . . . 88 89
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Total current assets . . . 1,534 1,598 Total liabilities . . . . . 7,491 7,696
Property, plant and Preferred stock . . . . . . . . 78 78
equipment - net . . . . . . . 8,346 8,428 Common stockholders'
Other assets . . . . . . . . . 780 780 equity . . . . . . . . . . . 3,091 3,032
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Total . . . . . . . . . . . $10,660 $10,806 Total . . . . . . . . . . . $10,660 $10,806
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The following notes are an integral part of these financial statements.
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MARATHON GROUP OF USX CORPORATION
SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
The condensed financial statements of the Marathon Group include the results of
operations and financial position for the businesses of Marathon Oil Company
and certain other subsidiaries of USX, and a portion of the corporate assets,
liabilities and related transactions which 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.
Changes in the inventory market valuation reserve resulted in a $128 million
and $23 million credit to operating income in the first quarter of 1994 and
1993, respectively.
Other income in the first quarter of 1994 included pretax gains of $22 million
from disposal of assets, primarily related to the sale of certain production
assets.
The provision for estimated income taxes for periods reported 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.
In 1993, USX adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS No. 112), and
Emerging Issues Task Force Consensus No. 93-14, "Accounting for Multiple-Year
Retrospectively Rated Insurance Contracts" (EITF No. 93-14). The cumulative
effect of these changes in accounting principles decreased first quarter 1993
net income by $17 million, net of $10 million income tax effect, for SFAS No.
112; and $6 million, net of $3 million income tax effect, for EITF No. 93-14.
April 26, 1994
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MARATHON GROUP OF USX CORPORATION
SUPPLEMENTAL INFORMATION
($'s in Millions)
First Quarter
Ended
March 31
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1994 1993
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SALES $ 2,747 $ 2,954
OPERATING INCOME (LOSS)
Exploration & Production
Domestic $ 15 $ 61
International 2 10
Refin., Market. & Trans. 97 32
Gas Gathering & Processing 1 1
Administrative (17) (21)
Inventory Mkt. Val. Res. Adj. 128 23
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Total Marathon Group $ 226 $ 106
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CAPITAL EXPENDITURES $ 113 $ 166
EXPLORATION EXPENSE
Domestic & International $ 33 $ 28
OPERATING STATISTICS
Net Liquids Production (a):
Domestic 110.5 112.9
International 48.7 43.6
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Worldwide 159.2 156.5
Net Natural Gas Production (b):
Domestic 572.4 568.4
International 413.7 393.7
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Worldwide 986.1 962.1
Average Sales Prices:
Liquid Hydrocarbons (per Bbl)
Domestic $ 11.19 $ 15.85
International 13.91 17.48
Natural Gas (per Mcf)
Domestic $ 2.07 $ 1.88
International 1.44 1.56
Crude Oil Refined (a) 440.8 541.4
Refined Products Sold (a) 686.0 706.4
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(a) Thousands of barrels per day
(b) Millions of cubic feet per day
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USX CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
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SALES . . . . . . . . . . . . . . . . . . . . . $ 4,273 $ 4,280
Total operating costs . . . . . . . . . . . . . (4,069) (4,122)
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OPERATING INCOME. . . . . . . . . . . . . . . . 204 158
Other income. . . . . . . . . . . . . . . . . . 28 37
Net interest and other financial costs. . . . . (108) (112)
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TOTAL INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES. . 124 83
Less provision for estimated income taxes . . . 49 36
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TOTAL INCOME BEFORE CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES. . . . . . . . . . . 75 47
Cumulative effect of changes in accounting
principles. . . . . . . . . . . . . . . . . . - (92)
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NET INCOME (LOSS) . . . . . . . . . . . . . . . 75 (45)
Dividends on preferred stock. . . . . . . . . . (7) (4)
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NET INCOME (LOSS) APPLICABLE TO COMMON STOCKS . $ 68 $ (49)
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*Restated as a result of the adoption of two new accounting standards.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
Mar. 31 Dec. 31 Mar. 31 Dec. 31
(In Millions) 1994 1993 1994 1993
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ASSETS LIABILITIES AND
Cash and cash STOCKHOLDERS' EQUITY
equivalents . . . . . $ 137 $ 268 Current liabilities. . $ 2,728 $ 3,334
Receivables - net . . . . 844 932 Long-term debt . . . . 5,695 5,888
Inventories . . . . . . . 1,663 1,626 Other liabilities. . . 4,619 4,288
Other current assets. . . 356 354
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Total current assets 3,000 3,180 Total liabilities. . 13,042 13,510
Property, plant and Preferred stock . . . . 112 112
equipment - net. . . . 11,488 11,603 Common stockholders'
Other assets. . . . . . . 2,623 2,591 equity . . . . . . . 3,957 3,752
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Total. . . . . . . . . $17,111 $17,374 Total. . . . . . . . $17,111 $17,374
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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)
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
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Applicable to Marathon Stock
Total income before cumulative effect of
changes in accounting principles applicable
to Marathon Stock. . . . . . . . . . . . . $ 109 $ 29
--Per share - primary and fully diluted. . .38 .10
Cumulative effect of changes in accounting
principles . . . . . . . . . . . . . . . . - (23)
--Per share - primary and fully diluted. . - (.08)
Net income applicable to Marathon Stock. . . 109 6
--Per share - primary and fully diluted. . .38 .02
Dividends paid per share . . . . . . . . . . .17 .17
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 286,582 286,610
--Fully diluted. . . . . . . . . . . . . . 292,829 286,612
Applicable to Steel Stock
Total income (loss) before cumulative effect
of change in accounting principle
applicable to Steel Stock. . . . . . . . . $ (41) $ 8
--Per share - primary and fully diluted. . (.56) .13
Cumulative effect of change in accounting
principle. . . . . . . . . . . . . . . . . - (69)
--Per share - primary and fully diluted. . - (1.16)
Net loss applicable to Steel Stock . . . . . (41) (61)
--Per share - primary and fully diluted. . (.56) (1.03)
Dividends paid per share . . . . . . . . . . .25 .25
Weighted average shares, in thousands
--Primary. . . . . . . . . . . . . . . . . 73,598 59,978
--Fully diluted. . . . . . . . . . . . . . 73,598 59,981
Applicable to Delhi Stock
Net income applicable to Delhi Stock . . . . $ - $ 6
--Per share - primary and fully diluted. . .03 .62
Dividends paid per share . . . . . . . . . . .05 .05
Weighted average shares, in thousands
--Primary and fully diluted. . . . . . . . 9,332 9,006
*Restated as a result of the adoption of two new accounting standards.
The following notes are an integral part of these financial statements.
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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.
Changes in the inventory market valuation reserve resulted in a $128 million
and $23 million credit to operating income in the first quarter of 1994 and
1993, respectively.
Other income in the first quarter of 1994 included pretax gains of $24 million
from disposal of assets, primarily related to the sale of certain Marathon
production assets. Other income in the first quarter of 1993 included a pretax
gain of $46 million from the disposal of assets, including the sale of an
investment in an insurance company.
The provision for estimated income taxes for periods reported is based on tax
rates and amounts which recognize management's best estimate of current and
deferred tax assets and liabilities.
In 1993, USX adopted Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS No. 112), and
Emerging Issues Task Force Consensus No. 93-14, "Accounting for Multiple-Year
Retrospectively Rated Insurance Contracts" (EITF No. 93-14). The cumulative
effect of these changes in accounting principles decreased first quarter 1993
net income by $86 million, net of $50 million income tax effect, for SFAS No.
112; and $6 million, net of $3 million income tax effect, for EITF No. 93-14.
In the first quarter of 1994, USX sold 5,000,000 shares of Steel Stock to the
public. In addition, USX Capital LLC, a wholly owned subsidiary of USX, sold
$250 million of 8-3/4% Cumulative Monthly Income Preferred Shares.
April 26, 1994