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EXHIBIT 99.2
Contact: William E. Keslar
Don H. Herring
(412) 433-6870
FOR IMMEDIATE RELEASE
USX CORPORATION ANNOUNCES FIRST QUARTER
U. S. STEEL GROUP FINANCIAL RESULTS
PITTSBURGH, April 26, 1994 -- USX Corporation reported a first
quarter 1994 net loss for its U. S. Steel Group (NYSE:X) of $35 million, or
$.56 per share. Utility curtailments and other severe winter weather
complications, an equipment failure which shut down steel production at Mon
Valley Works for 13 days, environmental remediation accruals, a signing bonus
paid under terms of the new labor agreement with the United Steelworkers of
America and outages related to the modernization of the Gary Works hot strip
mill materially contributed to the first quarter 1994 loss. The U. S. Steel
Group's first quarter 1993 net loss was $59 million, or $1.03 per share,
including the effect of an accounting change.
USX Corporation Board Chairman Charles A. Corry said that, "While
first quarter results were disappointing, they were affected by several
unforeseen and unusual circumstances and are not reflective of current strength
in steel markets or of U. S. Steel's ability to be a competitive leader in
those markets. Demand remains strong, the outlook is bright in our key market
sectors and we're confident that U. S. Steel is poised to take advantage of
market conditions in the second quarter and beyond as a low-cost supplier of
products to our customers."
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Sales for the first quarter of 1994 totaled $1.4 billion compared
with $1.2 billion in the first quarter of 1993. The Group had a $24 million
operating loss in the first quarter of 1994, compared with operating income of
$35 million in the first quarter of 1993 of which $28 million resulted from the
use of previously established insurance reserves to pay for certain employee
insurance benefits.
Steel shipments increased by 9 percent over first quarter 1993 levels
and prices increased modestly. However, January's record low temperatures and
extreme snow and ice conditions disrupted raw materials and steel producing
operations and caused mandated utility curtailments at U. S. Steel facilities
in the Midwest and Northeast as well as the USS/Kobe Steel Company joint
venture in Ohio.
In addition, on March 18, a steel ladle failure at Mon Valley Works
near Pittsburgh caused extensive damage and required the shutdown of steel
production facilities for 13 days. This outage resulted in costs for facility
repairs, lost steel production and reduced operating levels at downstream
finishing facilities. Steel production at Mon Valley Works returned to normal
levels in early April.
First quarter 1994 operating results reflected a reduction in
net pension credits and the adverse effects of increased scrap prices from the
prior-year quarter. The 1994 quarter also included accruals for environmental
remediation at two non-operating locations and the effects of a labor agreement
signing bonus.
Other income for the first quarter of 1993 included a pretax gain of
$38 million from the disposal of assets, including the sale of an investment in
an insurance company.
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Corry continued, "In the second quarter, U. S. Steel anticipates
taking advantage of the strong market and our ongoing programs to improve
quality and productivity and to reduce costs. Traditionally, raw materials
performance -- our coke and taconite operations -- improves in the second
quarter, and that upswing should be even more pronounced this year following
the severe first quarter weather. If steel demand remains high, as we expect,
we should continue to benefit from high shipment levels and price
improvements."
U. S. Steel continues to forecast 1994 domestic steel shipments of
close to 90 million tons, up 2 percent over 1993 levels. Much of the strength
is seen in the capital goods market as well as in the automotive and appliance
markets, which are consumers of the high quality value-added flat-rolled
steel products which U. S. Steel emphasizes in its commercial and operating
strategies.
Corry noted that the strength in the domestic steel market and
lingering recession in other parts of the world raise potential concerns about
increased unfairly traded steel imports into the United States. He reiterated
USX's intentions of filing additional antidumping and countervailing duty
petitions if unfair steel trade threatens U. S. Steel.
In March, Gary Works received the General Motors Mark of Excellence,
recognizing the plant's performance in quality, delivery, cost and technical
leadership. With that award, U. S. Steel became the only steel company to earn
the top supplier awards from each of the Big Three automakers.
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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)
Three Months Ended
March 31
(In Millions Except Per Share Data) 1994 1993*
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SALES . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,384 $ 1,208
Total operating costs . . . . . . . . . . . . . . . . . . (1,408) (1,173)
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OPERATING INCOME (LOSS) . . . . . . . . . . . . . . . . . (24) 35
Other income . . . . . . . . . . . . . . . . . . . . . . 5 27
Net interest and other financial costs . . . . . . . . . (35) (43)
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TOTAL INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE . . . . . . . (54) 19
Less provision (credit) for estimated income taxes . . . (19) 9
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TOTAL INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE . . . . . . . . . . . . (35) 10
Cumulative effect of change in accounting principle . . . - (69)
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NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . (35) (59)
Dividends on preferred stock . . . . . . . . . . . . . . (6) (2)
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NET LOSS APPLICABLE TO STEEL STOCK . . . . . . . . . . . $ (41) $ (61)
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Per common share data:
Weighted average shares, in thousands
- Primary . . . . . . . . . . . . . . . . . . . . . . 73,598 59,978
- Fully diluted . . . . . . . . . . . . . . . . . . . 73,598 59,981
Primary and fully diluted:
Total income (loss) before cumulative effect
of change in accounting principle . . . . . . . . $ (.56) $ .13
Cumulative effect of change in accounting
principle . . . . . . . . . . . . . . . . . . . . . - (1.16)
Net loss applicable to Steel Stock . . . . . . . . . . (.56) (1.03)
Dividends paid . . . . . . . . . . . . . . . . . . . . .25 .25
*Restated as a result of the adoption of a new accounting standard.
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 . . . . . . . . . $ 47 $ 79 Current liabilities . . . . . $1,221 $1,621
Receivables - net . . . . . . . 532 596 Long-term debt . . . . . . . . 1,599 1,540
Inventories . . . . . . . . . . 629 629 Other liabilities . . . . . . 2,941 2,838
Other current assets . . . . . 283 271
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Total current assets . . . . 1,491 1,575 Total liabilities . . . . . . 5,761 5,999
Property, plant and Preferred stock . . . . . . . . 32 32
equipment - net . . . . . . . 2,623 2,653 Common stockholders'
Other assets . . . . . . . . . 2,409 2,388 equity . . . . . . . . . . . . 730 585
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Total . . . . . . . . . . . . $6,523 $6,616 Total . . . . . . . . . . . . $6,523 $6,616
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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 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.
Other income in the first quarter of 1993 included a pretax gain of $38 million
from disposal of assets, primarily related to the sale of an investment in an
insurance company.
The provision for estimated income taxes for the 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). The
cumulative effect of this change in accounting principle decreased first
quarter 1993 net income of the U. S. Steel Group by $69 million, net of $40
million income tax effect.
In the first quarter of 1994, USX sold 5,000,000 shares of USX-U. S. Steel
Group Common Stock to the public. The proceeds have been reflected in their
entirety in the financial statements of the U. S. Steel Group.
April 26, 1994
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U. S. STEEL GROUP OF USX CORPORATION
SUPPLEMENTAL STATISTICS
($'s in Millions)
First Quarter
Ended
March 31
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1994 1993
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SALES
Steel and Related Businesses (a) $1,334 $1,166
Other Businesses (b) 50 42
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Total U. S. Steel Group $1,384 $1,208
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OPERATING INCOME (LOSS)
Steel and Related Businesses (a) $ (36) $ 7
Other Businesses (b) (7) (7)
Administrative (c) 19 35
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Total U. S. Steel Group $ (24) $ 35
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CAPITAL EXPENDITURES $ 44 $ 36
OPERATING STATISTICS
Public & Affil. Shipments (d) 2,461 2,252
Raw Steel-Production (d) 2,743 2,751
Raw Steel-Capability Utilization 92.8% 94.1%
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(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 real estate; fencing products; leasing and financing activities;
and titanium metal products.
(c) 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.
(d) Thousands of net tons
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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