USX Corporation Reports First Quarter 2001 U. S. Steel Group Results

Apr 19, 2001, 01:00 ET from USX- U. S. Steel Group

    PITTSBURGH, April 19 /PRNewswire/ -- USX-U. S. Steel Group (NYSE:   X) today
 issued the following:
 
                              Earnings Highlights
              (Dollars in millions except per diluted share data)
 
                                                       1Q 2001       1Q 2000
 
     Net income (loss) adjusted for special items        $(98)           $43
       - per diluted share                             $(1.12)        $0.45
 
     Net income                                            $9            $43
 
     Net income per diluted share                       $0.08          $0.45
 
     Revenues                                          $1,564         $1,588
 
     USX-U. S. Steel Group (NYSE:   X) reported a first quarter 2001 adjusted net
 loss of $98 million, or $1.12 per diluted share, compared with net income of
 $43 million, or 45 cents per diluted share, in first quarter 2000.
     In the first quarter 2001, U. S. Steel Group reported net income of
 $9 million, or 8 cents per diluted share, which included special items that
 had a net favorable after-tax effect of $107 million.  These items included a
 $103 million favorable after-tax effect related to the Transtar, Inc.
 (Transtar) reorganization; $52 million of favorable noncash adjustments of
 interest and taxes related to prior years; and a $48 million after-tax charge
 for receivables from Republic Technologies International, LLC (Republic) in
 light of its recent bankruptcy filing.
     In the first quarter 2001, U. S. Steel Group recorded a loss from
 reportable segments of $110 million, or $35 per ton, on shipments of
 3.2 million net tons.  U. S. Steel Group's Domestic Steel segment recorded a
 loss from operations of $151 million, or $62 per ton, which includes net
 unfavorable special items of $4 million.  First quarter 2000 Domestic Steel
 segment income was $54 million, or $18 per ton.  U. S. Steel Kosice s.r.o.
 (USSK), the Slovak Republic steel operation acquired during the 2000 fourth
 quarter, reported first quarter 2001 segment income of $41 million, or $55 per
 ton.
     First quarter 2001 domestic results were negatively impacted by reduced
 shipments, operating levels and prices, higher energy costs and limited coal
 mining operations.  Strong energy markets continued to benefit tubular
 shipments and prices.
     Total shipments for Domestic Steel in first quarter 2001 were 2.4 million
 net tons, down 18 percent from 3.0 million net tons in first quarter 2000.
 Total USSK shipments in first quarter 2001 were 749 thousand net tons.
     During first quarter 2001, domestic raw steel capability utilization was
 83 percent, down significantly from 99 percent in first quarter 2000.  In late
 February 2001, U. S. Steel restarted the No. 4 blast furnace at Gary Works,
 which had been idle since July of last year.  USSK raw steel capability
 utilization in the quarter was 86 percent.
     Commenting on results for Domestic Steel, USX Corporation Board Chairman
 Thomas J. Usher said, "A number of negative factors impacted the first quarter
 2001 results.  Since 1998, the damages caused by unfairly traded steel imports
 have created a state of emergency within the domestic steel industry, the
 seriousness of which is illustrated by 18 steel company bankruptcies and the
 loss of 15,000 jobs.  The import crisis and the slowing domestic economy
 created a devastating combination that resulted in reduced order levels and
 shipments, less efficient operating rates and the lowest sheet prices in two
 decades.  Other adverse factors contributing to the quarter's results included
 higher energy prices and continued operational problems at two coal mines.
     "On a positive note, operations in the Slovak Republic produced solid
 financial results in our first full quarter of ownership.  We remain quite
 optimistic about USSK's future in a growing Central European steel market,
 particularly as we implement improvements in product quality, customer service
 and productivity.  The U. S. Steel Group's tubular business also performed
 well in the first quarter due to a continuing high level of oil-field drilling
 activity."
     U. S. Steel Group's purchase of LTV Corporation's tin mill products
 business became effective on March 1, after delays of about two months due to
 LTV's bankruptcy filing in late December 2000.  The transition of ownership at
 LTV's Indiana Harbor tin operations was orderly, without disruption of service
 to customers.
     On April 2, Republic, the nation's largest producer of special bar quality
 steel, filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
 U. S. Steel Group has a 16 percent interest in Republic, which is a major
 purchaser of raw materials from U. S. Steel and the primary supplier of rounds
 for U. S. Steel's tubular facility in Lorain, Ohio.  Republic has continued to
 supply the Lorain mill since filing for bankruptcy and no supply interruptions
 are anticipated.  The U. S. Steel Group's carrying value of its investment in
 Republic has been reduced to zero.  Upon Republic's filing for bankruptcy,
 U. S. Steel Group accrued a charge for a substantial portion of the
 receivables due from Republic.
     Following the completion of a Reorganization and Exchange Agreement,
 Transtar became a wholly owned subsidiary of USX Corporation on March 23.  USX
 previously held 46 percent of Transtar.  As a result of this action, eight of
 Transtar's direct, transportation-related subsidiaries became part of USX.
 The remaining subsidiaries became part of an affiliate of Blackstone Capital
 Partners, L.P.
     In response to the continuing steel import crisis, U. S. Steel has joined
 with others in the industry calling for President Bush to initiate a steel
 industry-wide Section 201 case or pursue other available remedies.  Among the
 goals of such actions should be the reduction of steel imports across-the-
 board.
     In looking to the second quarter, Usher said, "For Domestic Steel, we
 continue to experience a weak order book, mills that are running at less-than-
 efficient utilization rates, depressed prices for most products, and high
 natural gas prices.  We expect second quarter shipments to be approximately
 10 percent higher than the first quarter and second quarter average realized
 prices to be somewhat lower than the first quarter, largely due to a less
 favorable product mix.  In the second quarter, work will begin on
 refurbishment of the Mon Valley No. 3 blast furnace, which will require an
 outage of approximately 60 days.
     "For USSK, we expect second quarter shipments to be more than 30 percent
 higher than the first quarter and second quarter average realized prices to be
 somewhat lower than the first quarter, largely due to a less favorable product
 mix.
     "For the full year 2001, total shipments are expected to be approximately
 14.5 million net tons with Domestic Steel shipments of approximately
 11 million net tons, including shipments from the recent acquisition of LTV's
 tin products business, and USSK shipments of approximately 3.5 million net
 tons."
 
     This release contains forward-looking statements with respect to the
 supply of rounds from Republic, shipments and prices.  Some factors, among
 others, that could affect supply of rounds from Republic include rejection by
 the bankruptcy court of the Republic reorganization plan or inadequate interim
 financing.  Some factors, among others, that could affect second quarter and
 full year 2001 shipments and prices include import levels, customer inventory
 levels, plant operating performance and U.S. and European economic
 performance.  In accordance with "safe harbor" provisions of the Private
 Securities Litigation Reform Act of 1995, USX has included in Form 10-K for
 the year ended December 31, 2000 cautionary statements identifying important
 factors, but not necessarily all factors, that could cause actual results to
 differ materially from those set forth in the forward-looking statements.
     A Statement of Operations and Preliminary Supplemental Statistics for the
 U. S. Steel Group and a Consolidated Statement of Operations for USX
 Corporation are attached.
     The company will conduct a conference call on first quarter earnings on
 Friday, April 20 at 1 p.m. ET.  To listen to the webcast of the conference
 call, visit the USX website, www.usx.com and click on the "U. S. Steel Group"
 button, then the "Investor Services" button.  Replays of the conference call
 will be available through April 27.
     For more information on USX Corporation and U. S. Steel Group, visit their
 websites at www.usx.com or www.ussteel.com.
 
     Visit USX Corporation's web site at http://www.usx.com.  USX Corporation
 press releases are available through Company News On-Call by fax,
 800-758-5804, ext. 929150, or at http://www.prnewswire.com/comp/929150.html.
 
 
                      U. S. STEEL GROUP OF USX CORPORATION
                      STATEMENT OF OPERATIONS (Unaudited)
                      ------------------------------------
 
                                                        First Quarter Ended
                                                             March 31
     (Dollars in millions, except per share amounts)   2001            2000
     ------------------------------------------------------------------------
     REVENUES AND OTHER INCOME:
      Revenues                                         $1,510         $1,582
      Income (loss) from investees                         47             (7)
      Net gains on disposal of assets                       6             15
      Other income (loss)                                   1             (2)
                                                       ------         ------
        Total revenues and other income                 1,564          1,588
                                                       ------         ------
     COSTS AND EXPENSES:
       Cost of revenues (excludes items shown below)    1,549          1,428
       Selling, general and administrative
        expenses (credits)                                (16)           (63)
       Depreciation, depletion and amortization            73             75
       Taxes other than income taxes                       59             57
                                                       ------         ------
         Total costs and expenses                       1,665          1,497
                                                       ------         ------
     INCOME (LOSS) FROM OPERATIONS                       (101)            91
     Net interest and other financial
      costs (income)                                      (12)            24
                                                       ------         ------
     INCOME (LOSS) BEFORE INCOME TAXES                    (89)            67
     Provision (credit) for income taxes                  (98)            24
                                                       ------         ------
     NET INCOME                                             9             43
     Dividends on preferred stock                           2              2
                                                       ------         ------
     NET INCOME APPLICABLE TO STEEL STOCK                  $7            $41
                                                       ======         ======
 
     STEEL STOCK DATA:
       Net income                                          $7            $41
         - Per share - basic and diluted                  .08            .45
 
     Dividends paid per share                             .25            .25
 
     Weighted average shares, in thousands
         - Basic                                       88,806         88,422
         - Diluted                                     88,806         88,430
 
 
     The following notes are an integral part of this financial statement.
 
 
                      U. S. STEEL GROUP OF USX CORPORATION
                     SELECTED NOTES TO FINANCIAL STATEMENT
                     --------------------------------------
 
     1.  The statement of operations of the U. S. Steel Group includes the
         results of operations for the businesses of USX other than businesses
         included in the Marathon Group and a portion of USX's net financial
         costs, general and administrative costs and income taxes attributed
         to the 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.
 
     2.  On March 1, 2001, USX completed the purchase of the tin mill products
         business of LTV Corporation (LTV).  In this noncash transaction, USX
         assumed certain employee related obligations of LTV.  The acquisition
         was accounted for using the purchase method of accounting.  First
         quarter 2001 results of operations include the operations of LTV from
         the date of acquisition.
 
         On March 23, 2001, Transtar, Inc. (Transtar) completed its previously
         announced reorganization with its two voting shareholders, USX and
         Transtar Holdings, L.P. (Holdings), an affiliate of Blackstone
         Capital Partners L.P.  As a result of this transaction, USX became
         sole owner of Transtar and certain of its subsidiaries.  Holdings
         became owner of the other subsidiaries of Transtar.  USX accounted
         for the change in its ownership interest in Transtar using the
         purchase method of accounting.  The U. S. Steel Group recognized in
         the first quarter of 2001 a pretax gain of $70 million (included in
         income (loss) from investees) and a favorable deferred tax adjustment
         of $33 million related to this transaction.  USX previously accounted
         for its investment in Transtar under the equity method of accounting.
 
     3.  USX has a 16% investment in Republic Technologies International LLC
         (Republic) which is accounted for under the equity method of
         accounting.  During the first quarter of 2001, USX discontinued
         applying the equity method since investments in and advances to
         Republic had been reduced to zero.  Also, USX has recognized certain
         debt obligations of $14 million previously assumed by Republic but
         guaranteed by USX.  On April 2, 2001, Republic filed a voluntary
         petition with the U.S. Bankruptcy Court to reorganize its operations
         under Chapter 11 of the U.S. Bankruptcy Code.  In the first quarter
         of 2001, as a result of Republic's action, the U. S. Steel Group
         recorded a pretax provision of $74 million for potentially
         uncollectible receivables from Republic.
 
     4.  In the first quarter of 2001, interest and other financial costs
         includes a favorable adjustment of $67 million and provision for
         income taxes includes an unfavorable adjustment of $15 million
         related to prior years' taxes.
 
 
                      U. S. STEEL GROUP OF USX CORPORATION
                PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
                -----------------------------------------------
 
                                                        First Quarter Ended
                                                              March 31
     (Dollars in millions)                                2001        2000
     -----------------------------------------------------------------------
     INCOME (LOSS) FROM OPERATIONS
     Domestic Steel(a)(b)                                 $(151)       $54
     U. S. Steel Kosice(c)                                   41          -
                                                          -----      -----
     Income (Loss) from Reportable Segments               $(110)       $54
       Items not allocated to segment:
       Net Pension Credits                                   41         65
       Administrative Expenses                               (8)        (6)
       Costs related to former business activities(d)       (24)       (22)
                                                          -----      -----
         Total U. S. Steel Group                          $(101)       $91
 
     CAPITAL EXPENDITURES
       Domestic Steel                                       $32        $45
       U. S. Steel Kosice                                     5          -
                                                          -----      -----
         Total U. S. Steel Group                            $37        $45
 
     OPERATING STATISTICS
       Average steel price per ton: ($/net ton)
         Domestic Steel                                    $439       $438
         U. S. Steel Kosice                                 293          -
       Steel Shipments:(e)
         Domestic Steel                                   2,432      2,980
         U. S. Steel Kosice                                 749          -
                                                          -----      -----
          Total Steel Shipments                           3,181      2,980
     Raw Steel-Production:(e)
       Domestic Steel                                     2,623      3,152
       U. S. Steel Kosice                                   952          -
                                                          -----      -----
          Total Raw Steel-Production                      3,575      3,152
     Raw Steel-Capability Utilization:(f)
       Domestic Steel                                      83.1%      99.0%
       U. S. Steel Kosice                                  85.8%         -
     Iron ore shipments _ Domestic Steel(e)               1,911      2,029
 
     -----------
       (a) The first quarter of 2001 includes a favorable $70 million for USX's
           share of gain on the Transtar reorganization and a $74 million
           charge for a substantial portion of the receivables due from
           Republic.
       (b) Includes the sale, domestic production and transportation of steel
           products, coke and taconite pellets; domestic coal mining; the
           management of mineral resources; engineering and consulting
           services; and equity income from joint ventures and partially owned
           companies.  Also includes results of real estate development and
           management.
       (c) Includes the production and sale of steel products from facilities
           primarily located in the Slovak Republic.
       (d) Includes other postretirement benefit costs and certain other
           expenses principally attributable to former business units of the
           U.S. Steel Group.
       (e) Thousands of net tons.
       (f) Based on annual raw steel production capability of 12.8 million tons
           for Domestic Steel and 4.5 million tons for U.S. Steel Kosice.
 
 
 
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                ------------------------------------------------
 
                                                        First Quarter Ended
                                                             March 31
     (Dollars in millions)                              2001          2000
     -----------------------------------------------------------------------
     REVENUES AND OTHER INCOME:
       Revenues                                       $10,127         $9,307
       Dividend and investee income                        80              4
       Net gains on disposal of assets                     21            111
       Other income                                        68              7
                                                       ------         ------
       Total revenues and other income                 10,296          9,429
                                                       ------         ------
     COSTS AND EXPENSES:
       Cost of revenues (excludes items shown below)    7,769          7,213
       Selling, general and administrative expenses       125             71
       Depreciation, depletion and amortization           376            321
       Taxes other than income taxes                    1,181          1,163
       Exploration expenses                                23             45
                                                       ------         ------
       Total costs and expenses                         9,474          8,813
                                                       ------         ------
     INCOME FROM OPERATIONS                               822            616
     Net interest and other financial costs                23             95
     Minority interest in income of Marathon Ashland
      Petroleum LLC                                       107             55
                                                       ------         ------
     INCOME BEFORE INCOME TAXES AND CUMULATIVE
      EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE            692            466
     Provision for income taxes                           168            169
                                                       ------         ------
     INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                                524            297
     Cumulative effect of change in
      accounting principle                                 (8)             -
                                                       ------         ------
     NET INCOME                                           516            297
     Dividends on preferred stock                           2              2
                                                       ------         ------
     NET INCOME APPLICABLE TO COMMON STOCKS              $514           $295
                                                       ======         ======
 
 
                    USX CORPORATION AND SUBSIDIARY COMPANIES
          CONSOLIDATED STATEMENT OF OPERATIONS (Continued) (Unaudited)
                            INCOME PER COMMON SHARE
          ------------------------------------------------------------
 
                                                        First Quarter Ended
                                                              March 31
     (Dollars in millions, except per share amounts)    2001           2000
     ----------------------------------------------------------------------
     APPLICABLE TO MARATHON STOCK:
      Income before cumulative effect of change in
       accounting principle                              $515           $254
       - Per share - basic and diluted                   1.67            .81
      Cumulative effect of change in
       accounting principle                                (8)             -
       - Per share - basic and diluted                   (.03)             -
      Net income                                         $507           $254
       - Per share - basic and diluted                   1.64            .81
 
      Dividends paid per share                            .23            .21
 
      Weighted average shares, in thousands
        - Basic                                       308,753        312,128
        - Diluted                                     309,073        312,285
 
     APPLICABLE TO STEEL STOCK:
      Net income                                           $7            $41
       - Per share - basic and diluted                    .08            .45
 
      Dividends paid per share                            .25            .25
 
      Weighted average shares, in thousands
        - Basic                                        88,806         88,422
        - Diluted                                      88,806         88,430
 
 
     The following notes are an integral part of this financial statement.
 
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     SELECTED NOTES TO FINANCIAL STATEMENT
                    ----------------------------------------
 
      1. Effective January 1, 2001, USX adopted Statement of Financial
         Accounting Standards No. 133, _Accounting for Derivative Instruments
         and Hedging Activities_ (SFAS No. 133), which was amended by SFAS
         Nos. 137 and 138.  This Standard requires recognition of all
         derivatives as either assets or liabilities at fair value.
 
         The transition adjustment related to adopting SFAS No. 133 on
         January 1, 2001, was recognized as a cumulative effect of change in
         accounting principle.  The unfavorable cumulative effect on net
         income, net of tax of $5 million, was $8 million.  The unfavorable
         cumulative effect on other comprehensive income, net of tax of
         $4 million, was $8 million.  The amounts reported as other
         comprehensive income will be reflected in net income when the
         anticipated physical transactions are consummated.
 
      2. In the first quarter 2001, Marathon Oil Company (Marathon) acquired
         Pennaco Energy, Inc. (Pennaco), a natural gas producer.  Marathon
         acquired 87% of the outstanding stock of Pennaco through a tender
         offer on February 7, 2001.  On March 26, 2001, Pennaco was merged
         with a wholly owned subsidiary of Marathon.  Under the terms of the
         merger, shares not held by Marathon were converted into the right to
         receive $19 in cash.  The total purchase price of Pennaco was $506
         million.  The acquisition was accounted for under the purchase method
         of accounting.  First quarter results of operations include the
         results of Pennaco from February 7, 2001.
 
         On March 1, 2001, USX completed the purchase of the tin mill products
         business of LTV Corporation (LTV).  In this noncash transaction, USX
         assumed certain employee related obligations of LTV.  The acquisition
         was accounted for using the purchase method of accounting.  First
         quarter 2001 results of operations include the operations of LTV from
         the date of acquisition.
 
         On March 23, 2001, Transtar, Inc. (Transtar) completed its previously
         announced reorganization with its two voting shareholders, USX and
         Transtar Holdings, L.P. (Holdings), an affiliate of Blackstone
         Capital Partners L.P.  As a result of this transaction, USX became
         sole owner of Transtar and certain of its subsidiaries.  Holdings
         became owner of the other subsidiaries of Transtar.  USX accounted
         for the change in its ownership interest in Transtar using the
         purchase method of accounting.  USX recognized in the first quarter
         of 2001, a pretax gain of $70 million (included in dividend and
         investee income) and a favorable deferred tax adjustment of
         $33 million related to this transaction.  USX previously accounted
         for its investment in Transtar under the equity method of accounting.
 
      3. USX has a 16% investment in Republic Technologies International LLC
         (Republic) which is accounted for under the equity method of
         accounting.  During the first quarter of 2001, USX discontinued
         applying the equity method since investments in and advances to
         Republic had been reduced to zero.  Also, USX has recognized certain
         debt obligations of $14 million previously assumed by Republic but
         guaranteed by USX.  On April 2, 2001, Republic filed a voluntary
         petition with the U.S. Bankruptcy Court to reorganize its operations
         under Chapter 11 of the U.S. Bankruptcy Code.  In the first quarter
         of 2001, as a result of Republic's action, USX recorded a pretax
         provision of $74 million for potentially uncollectible receivables
         from Republic.
 
 

SOURCE USX- U. S. Steel Group
    PITTSBURGH, April 19 /PRNewswire/ -- USX-U. S. Steel Group (NYSE:   X) today
 issued the following:
 
                              Earnings Highlights
              (Dollars in millions except per diluted share data)
 
                                                       1Q 2001       1Q 2000
 
     Net income (loss) adjusted for special items        $(98)           $43
       - per diluted share                             $(1.12)        $0.45
 
     Net income                                            $9            $43
 
     Net income per diluted share                       $0.08          $0.45
 
     Revenues                                          $1,564         $1,588
 
     USX-U. S. Steel Group (NYSE:   X) reported a first quarter 2001 adjusted net
 loss of $98 million, or $1.12 per diluted share, compared with net income of
 $43 million, or 45 cents per diluted share, in first quarter 2000.
     In the first quarter 2001, U. S. Steel Group reported net income of
 $9 million, or 8 cents per diluted share, which included special items that
 had a net favorable after-tax effect of $107 million.  These items included a
 $103 million favorable after-tax effect related to the Transtar, Inc.
 (Transtar) reorganization; $52 million of favorable noncash adjustments of
 interest and taxes related to prior years; and a $48 million after-tax charge
 for receivables from Republic Technologies International, LLC (Republic) in
 light of its recent bankruptcy filing.
     In the first quarter 2001, U. S. Steel Group recorded a loss from
 reportable segments of $110 million, or $35 per ton, on shipments of
 3.2 million net tons.  U. S. Steel Group's Domestic Steel segment recorded a
 loss from operations of $151 million, or $62 per ton, which includes net
 unfavorable special items of $4 million.  First quarter 2000 Domestic Steel
 segment income was $54 million, or $18 per ton.  U. S. Steel Kosice s.r.o.
 (USSK), the Slovak Republic steel operation acquired during the 2000 fourth
 quarter, reported first quarter 2001 segment income of $41 million, or $55 per
 ton.
     First quarter 2001 domestic results were negatively impacted by reduced
 shipments, operating levels and prices, higher energy costs and limited coal
 mining operations.  Strong energy markets continued to benefit tubular
 shipments and prices.
     Total shipments for Domestic Steel in first quarter 2001 were 2.4 million
 net tons, down 18 percent from 3.0 million net tons in first quarter 2000.
 Total USSK shipments in first quarter 2001 were 749 thousand net tons.
     During first quarter 2001, domestic raw steel capability utilization was
 83 percent, down significantly from 99 percent in first quarter 2000.  In late
 February 2001, U. S. Steel restarted the No. 4 blast furnace at Gary Works,
 which had been idle since July of last year.  USSK raw steel capability
 utilization in the quarter was 86 percent.
     Commenting on results for Domestic Steel, USX Corporation Board Chairman
 Thomas J. Usher said, "A number of negative factors impacted the first quarter
 2001 results.  Since 1998, the damages caused by unfairly traded steel imports
 have created a state of emergency within the domestic steel industry, the
 seriousness of which is illustrated by 18 steel company bankruptcies and the
 loss of 15,000 jobs.  The import crisis and the slowing domestic economy
 created a devastating combination that resulted in reduced order levels and
 shipments, less efficient operating rates and the lowest sheet prices in two
 decades.  Other adverse factors contributing to the quarter's results included
 higher energy prices and continued operational problems at two coal mines.
     "On a positive note, operations in the Slovak Republic produced solid
 financial results in our first full quarter of ownership.  We remain quite
 optimistic about USSK's future in a growing Central European steel market,
 particularly as we implement improvements in product quality, customer service
 and productivity.  The U. S. Steel Group's tubular business also performed
 well in the first quarter due to a continuing high level of oil-field drilling
 activity."
     U. S. Steel Group's purchase of LTV Corporation's tin mill products
 business became effective on March 1, after delays of about two months due to
 LTV's bankruptcy filing in late December 2000.  The transition of ownership at
 LTV's Indiana Harbor tin operations was orderly, without disruption of service
 to customers.
     On April 2, Republic, the nation's largest producer of special bar quality
 steel, filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
 U. S. Steel Group has a 16 percent interest in Republic, which is a major
 purchaser of raw materials from U. S. Steel and the primary supplier of rounds
 for U. S. Steel's tubular facility in Lorain, Ohio.  Republic has continued to
 supply the Lorain mill since filing for bankruptcy and no supply interruptions
 are anticipated.  The U. S. Steel Group's carrying value of its investment in
 Republic has been reduced to zero.  Upon Republic's filing for bankruptcy,
 U. S. Steel Group accrued a charge for a substantial portion of the
 receivables due from Republic.
     Following the completion of a Reorganization and Exchange Agreement,
 Transtar became a wholly owned subsidiary of USX Corporation on March 23.  USX
 previously held 46 percent of Transtar.  As a result of this action, eight of
 Transtar's direct, transportation-related subsidiaries became part of USX.
 The remaining subsidiaries became part of an affiliate of Blackstone Capital
 Partners, L.P.
     In response to the continuing steel import crisis, U. S. Steel has joined
 with others in the industry calling for President Bush to initiate a steel
 industry-wide Section 201 case or pursue other available remedies.  Among the
 goals of such actions should be the reduction of steel imports across-the-
 board.
     In looking to the second quarter, Usher said, "For Domestic Steel, we
 continue to experience a weak order book, mills that are running at less-than-
 efficient utilization rates, depressed prices for most products, and high
 natural gas prices.  We expect second quarter shipments to be approximately
 10 percent higher than the first quarter and second quarter average realized
 prices to be somewhat lower than the first quarter, largely due to a less
 favorable product mix.  In the second quarter, work will begin on
 refurbishment of the Mon Valley No. 3 blast furnace, which will require an
 outage of approximately 60 days.
     "For USSK, we expect second quarter shipments to be more than 30 percent
 higher than the first quarter and second quarter average realized prices to be
 somewhat lower than the first quarter, largely due to a less favorable product
 mix.
     "For the full year 2001, total shipments are expected to be approximately
 14.5 million net tons with Domestic Steel shipments of approximately
 11 million net tons, including shipments from the recent acquisition of LTV's
 tin products business, and USSK shipments of approximately 3.5 million net
 tons."
 
     This release contains forward-looking statements with respect to the
 supply of rounds from Republic, shipments and prices.  Some factors, among
 others, that could affect supply of rounds from Republic include rejection by
 the bankruptcy court of the Republic reorganization plan or inadequate interim
 financing.  Some factors, among others, that could affect second quarter and
 full year 2001 shipments and prices include import levels, customer inventory
 levels, plant operating performance and U.S. and European economic
 performance.  In accordance with "safe harbor" provisions of the Private
 Securities Litigation Reform Act of 1995, USX has included in Form 10-K for
 the year ended December 31, 2000 cautionary statements identifying important
 factors, but not necessarily all factors, that could cause actual results to
 differ materially from those set forth in the forward-looking statements.
     A Statement of Operations and Preliminary Supplemental Statistics for the
 U. S. Steel Group and a Consolidated Statement of Operations for USX
 Corporation are attached.
     The company will conduct a conference call on first quarter earnings on
 Friday, April 20 at 1 p.m. ET.  To listen to the webcast of the conference
 call, visit the USX website, www.usx.com and click on the "U. S. Steel Group"
 button, then the "Investor Services" button.  Replays of the conference call
 will be available through April 27.
     For more information on USX Corporation and U. S. Steel Group, visit their
 websites at www.usx.com or www.ussteel.com.
 
     Visit USX Corporation's web site at http://www.usx.com.  USX Corporation
 press releases are available through Company News On-Call by fax,
 800-758-5804, ext. 929150, or at http://www.prnewswire.com/comp/929150.html.
 
 
                      U. S. STEEL GROUP OF USX CORPORATION
                      STATEMENT OF OPERATIONS (Unaudited)
                      ------------------------------------
 
                                                        First Quarter Ended
                                                             March 31
     (Dollars in millions, except per share amounts)   2001            2000
     ------------------------------------------------------------------------
     REVENUES AND OTHER INCOME:
      Revenues                                         $1,510         $1,582
      Income (loss) from investees                         47             (7)
      Net gains on disposal of assets                       6             15
      Other income (loss)                                   1             (2)
                                                       ------         ------
        Total revenues and other income                 1,564          1,588
                                                       ------         ------
     COSTS AND EXPENSES:
       Cost of revenues (excludes items shown below)    1,549          1,428
       Selling, general and administrative
        expenses (credits)                                (16)           (63)
       Depreciation, depletion and amortization            73             75
       Taxes other than income taxes                       59             57
                                                       ------         ------
         Total costs and expenses                       1,665          1,497
                                                       ------         ------
     INCOME (LOSS) FROM OPERATIONS                       (101)            91
     Net interest and other financial
      costs (income)                                      (12)            24
                                                       ------         ------
     INCOME (LOSS) BEFORE INCOME TAXES                    (89)            67
     Provision (credit) for income taxes                  (98)            24
                                                       ------         ------
     NET INCOME                                             9             43
     Dividends on preferred stock                           2              2
                                                       ------         ------
     NET INCOME APPLICABLE TO STEEL STOCK                  $7            $41
                                                       ======         ======
 
     STEEL STOCK DATA:
       Net income                                          $7            $41
         - Per share - basic and diluted                  .08            .45
 
     Dividends paid per share                             .25            .25
 
     Weighted average shares, in thousands
         - Basic                                       88,806         88,422
         - Diluted                                     88,806         88,430
 
 
     The following notes are an integral part of this financial statement.
 
 
                      U. S. STEEL GROUP OF USX CORPORATION
                     SELECTED NOTES TO FINANCIAL STATEMENT
                     --------------------------------------
 
     1.  The statement of operations of the U. S. Steel Group includes the
         results of operations for the businesses of USX other than businesses
         included in the Marathon Group and a portion of USX's net financial
         costs, general and administrative costs and income taxes attributed
         to the 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.
 
     2.  On March 1, 2001, USX completed the purchase of the tin mill products
         business of LTV Corporation (LTV).  In this noncash transaction, USX
         assumed certain employee related obligations of LTV.  The acquisition
         was accounted for using the purchase method of accounting.  First
         quarter 2001 results of operations include the operations of LTV from
         the date of acquisition.
 
         On March 23, 2001, Transtar, Inc. (Transtar) completed its previously
         announced reorganization with its two voting shareholders, USX and
         Transtar Holdings, L.P. (Holdings), an affiliate of Blackstone
         Capital Partners L.P.  As a result of this transaction, USX became
         sole owner of Transtar and certain of its subsidiaries.  Holdings
         became owner of the other subsidiaries of Transtar.  USX accounted
         for the change in its ownership interest in Transtar using the
         purchase method of accounting.  The U. S. Steel Group recognized in
         the first quarter of 2001 a pretax gain of $70 million (included in
         income (loss) from investees) and a favorable deferred tax adjustment
         of $33 million related to this transaction.  USX previously accounted
         for its investment in Transtar under the equity method of accounting.
 
     3.  USX has a 16% investment in Republic Technologies International LLC
         (Republic) which is accounted for under the equity method of
         accounting.  During the first quarter of 2001, USX discontinued
         applying the equity method since investments in and advances to
         Republic had been reduced to zero.  Also, USX has recognized certain
         debt obligations of $14 million previously assumed by Republic but
         guaranteed by USX.  On April 2, 2001, Republic filed a voluntary
         petition with the U.S. Bankruptcy Court to reorganize its operations
         under Chapter 11 of the U.S. Bankruptcy Code.  In the first quarter
         of 2001, as a result of Republic's action, the U. S. Steel Group
         recorded a pretax provision of $74 million for potentially
         uncollectible receivables from Republic.
 
     4.  In the first quarter of 2001, interest and other financial costs
         includes a favorable adjustment of $67 million and provision for
         income taxes includes an unfavorable adjustment of $15 million
         related to prior years' taxes.
 
 
                      U. S. STEEL GROUP OF USX CORPORATION
                PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)
                -----------------------------------------------
 
                                                        First Quarter Ended
                                                              March 31
     (Dollars in millions)                                2001        2000
     -----------------------------------------------------------------------
     INCOME (LOSS) FROM OPERATIONS
     Domestic Steel(a)(b)                                 $(151)       $54
     U. S. Steel Kosice(c)                                   41          -
                                                          -----      -----
     Income (Loss) from Reportable Segments               $(110)       $54
       Items not allocated to segment:
       Net Pension Credits                                   41         65
       Administrative Expenses                               (8)        (6)
       Costs related to former business activities(d)       (24)       (22)
                                                          -----      -----
         Total U. S. Steel Group                          $(101)       $91
 
     CAPITAL EXPENDITURES
       Domestic Steel                                       $32        $45
       U. S. Steel Kosice                                     5          -
                                                          -----      -----
         Total U. S. Steel Group                            $37        $45
 
     OPERATING STATISTICS
       Average steel price per ton: ($/net ton)
         Domestic Steel                                    $439       $438
         U. S. Steel Kosice                                 293          -
       Steel Shipments:(e)
         Domestic Steel                                   2,432      2,980
         U. S. Steel Kosice                                 749          -
                                                          -----      -----
          Total Steel Shipments                           3,181      2,980
     Raw Steel-Production:(e)
       Domestic Steel                                     2,623      3,152
       U. S. Steel Kosice                                   952          -
                                                          -----      -----
          Total Raw Steel-Production                      3,575      3,152
     Raw Steel-Capability Utilization:(f)
       Domestic Steel                                      83.1%      99.0%
       U. S. Steel Kosice                                  85.8%         -
     Iron ore shipments _ Domestic Steel(e)               1,911      2,029
 
     -----------
       (a) The first quarter of 2001 includes a favorable $70 million for USX's
           share of gain on the Transtar reorganization and a $74 million
           charge for a substantial portion of the receivables due from
           Republic.
       (b) Includes the sale, domestic production and transportation of steel
           products, coke and taconite pellets; domestic coal mining; the
           management of mineral resources; engineering and consulting
           services; and equity income from joint ventures and partially owned
           companies.  Also includes results of real estate development and
           management.
       (c) Includes the production and sale of steel products from facilities
           primarily located in the Slovak Republic.
       (d) Includes other postretirement benefit costs and certain other
           expenses principally attributable to former business units of the
           U.S. Steel Group.
       (e) Thousands of net tons.
       (f) Based on annual raw steel production capability of 12.8 million tons
           for Domestic Steel and 4.5 million tons for U.S. Steel Kosice.
 
 
 
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                ------------------------------------------------
 
                                                        First Quarter Ended
                                                             March 31
     (Dollars in millions)                              2001          2000
     -----------------------------------------------------------------------
     REVENUES AND OTHER INCOME:
       Revenues                                       $10,127         $9,307
       Dividend and investee income                        80              4
       Net gains on disposal of assets                     21            111
       Other income                                        68              7
                                                       ------         ------
       Total revenues and other income                 10,296          9,429
                                                       ------         ------
     COSTS AND EXPENSES:
       Cost of revenues (excludes items shown below)    7,769          7,213
       Selling, general and administrative expenses       125             71
       Depreciation, depletion and amortization           376            321
       Taxes other than income taxes                    1,181          1,163
       Exploration expenses                                23             45
                                                       ------         ------
       Total costs and expenses                         9,474          8,813
                                                       ------         ------
     INCOME FROM OPERATIONS                               822            616
     Net interest and other financial costs                23             95
     Minority interest in income of Marathon Ashland
      Petroleum LLC                                       107             55
                                                       ------         ------
     INCOME BEFORE INCOME TAXES AND CUMULATIVE
      EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE            692            466
     Provision for income taxes                           168            169
                                                       ------         ------
     INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                                524            297
     Cumulative effect of change in
      accounting principle                                 (8)             -
                                                       ------         ------
     NET INCOME                                           516            297
     Dividends on preferred stock                           2              2
                                                       ------         ------
     NET INCOME APPLICABLE TO COMMON STOCKS              $514           $295
                                                       ======         ======
 
 
                    USX CORPORATION AND SUBSIDIARY COMPANIES
          CONSOLIDATED STATEMENT OF OPERATIONS (Continued) (Unaudited)
                            INCOME PER COMMON SHARE
          ------------------------------------------------------------
 
                                                        First Quarter Ended
                                                              March 31
     (Dollars in millions, except per share amounts)    2001           2000
     ----------------------------------------------------------------------
     APPLICABLE TO MARATHON STOCK:
      Income before cumulative effect of change in
       accounting principle                              $515           $254
       - Per share - basic and diluted                   1.67            .81
      Cumulative effect of change in
       accounting principle                                (8)             -
       - Per share - basic and diluted                   (.03)             -
      Net income                                         $507           $254
       - Per share - basic and diluted                   1.64            .81
 
      Dividends paid per share                            .23            .21
 
      Weighted average shares, in thousands
        - Basic                                       308,753        312,128
        - Diluted                                     309,073        312,285
 
     APPLICABLE TO STEEL STOCK:
      Net income                                           $7            $41
       - Per share - basic and diluted                    .08            .45
 
      Dividends paid per share                            .25            .25
 
      Weighted average shares, in thousands
        - Basic                                        88,806         88,422
        - Diluted                                      88,806         88,430
 
 
     The following notes are an integral part of this financial statement.
 
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     SELECTED NOTES TO FINANCIAL STATEMENT
                    ----------------------------------------
 
      1. Effective January 1, 2001, USX adopted Statement of Financial
         Accounting Standards No. 133, _Accounting for Derivative Instruments
         and Hedging Activities_ (SFAS No. 133), which was amended by SFAS
         Nos. 137 and 138.  This Standard requires recognition of all
         derivatives as either assets or liabilities at fair value.
 
         The transition adjustment related to adopting SFAS No. 133 on
         January 1, 2001, was recognized as a cumulative effect of change in
         accounting principle.  The unfavorable cumulative effect on net
         income, net of tax of $5 million, was $8 million.  The unfavorable
         cumulative effect on other comprehensive income, net of tax of
         $4 million, was $8 million.  The amounts reported as other
         comprehensive income will be reflected in net income when the
         anticipated physical transactions are consummated.
 
      2. In the first quarter 2001, Marathon Oil Company (Marathon) acquired
         Pennaco Energy, Inc. (Pennaco), a natural gas producer.  Marathon
         acquired 87% of the outstanding stock of Pennaco through a tender
         offer on February 7, 2001.  On March 26, 2001, Pennaco was merged
         with a wholly owned subsidiary of Marathon.  Under the terms of the
         merger, shares not held by Marathon were converted into the right to
         receive $19 in cash.  The total purchase price of Pennaco was $506
         million.  The acquisition was accounted for under the purchase method
         of accounting.  First quarter results of operations include the
         results of Pennaco from February 7, 2001.
 
         On March 1, 2001, USX completed the purchase of the tin mill products
         business of LTV Corporation (LTV).  In this noncash transaction, USX
         assumed certain employee related obligations of LTV.  The acquisition
         was accounted for using the purchase method of accounting.  First
         quarter 2001 results of operations include the operations of LTV from
         the date of acquisition.
 
         On March 23, 2001, Transtar, Inc. (Transtar) completed its previously
         announced reorganization with its two voting shareholders, USX and
         Transtar Holdings, L.P. (Holdings), an affiliate of Blackstone
         Capital Partners L.P.  As a result of this transaction, USX became
         sole owner of Transtar and certain of its subsidiaries.  Holdings
         became owner of the other subsidiaries of Transtar.  USX accounted
         for the change in its ownership interest in Transtar using the
         purchase method of accounting.  USX recognized in the first quarter
         of 2001, a pretax gain of $70 million (included in dividend and
         investee income) and a favorable deferred tax adjustment of
         $33 million related to this transaction.  USX previously accounted
         for its investment in Transtar under the equity method of accounting.
 
      3. USX has a 16% investment in Republic Technologies International LLC
         (Republic) which is accounted for under the equity method of
         accounting.  During the first quarter of 2001, USX discontinued
         applying the equity method since investments in and advances to
         Republic had been reduced to zero.  Also, USX has recognized certain
         debt obligations of $14 million previously assumed by Republic but
         guaranteed by USX.  On April 2, 2001, Republic filed a voluntary
         petition with the U.S. Bankruptcy Court to reorganize its operations
         under Chapter 11 of the U.S. Bankruptcy Code.  In the first quarter
         of 2001, as a result of Republic's action, USX recorded a pretax
         provision of $74 million for potentially uncollectible receivables
         from Republic.
 
 SOURCE  USX- U. S. Steel Group

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