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LTV REPORTS $138.6 MILLION SECOND QUARTER INCOME

 LTV REPORTS $138.6 MILLION SECOND QUARTER INCOME
 DALLAS, July 28 /PRNewswire/ -- The LTV Corporation (NYSE: QLTV)


today reported a second quarter net income of $138.6 million compared with income of $13.4 million in the second quarter of 1991. The improvement was due to a $150 million net gain on the sale in April of LTV's AM General vehicle manufacturing business. Absent the gain, LTV would have had a net loss of $11.4 million.
 Second quarter consolidated sales totaled $1.53 billion compared with sales of $1.56 billion in the second quarter of 1991. The decline resulted primarily from the absence of AM General sales, partially offset by higher missiles division sales and a higher volume of steel shipments.
 Operating results for the quarter principally reflect lower quarter- to-quarter steel selling prices, a decline in aerospace and defense operating income due to the sale of the AM General business, and increased aerospace and defense income in the 1991 quarter resulting from retroactive profit rate adjustments.
 LTV Chairman and Chief Executive Officer David H. Hoag said, "The major problem affecting LTV's financial results is the industry-wide pattern of inadequate steel prices related to weakness in the national economy and market distortions caused by imported steel."
 For the six month period ending June 30, LTV's net income improved to $95.3 million from a net loss of $32.9 million in the first half of 1991. The improvement was attributable to the $150 million gain on the AM General sale, partially offset by a decline in operating results for LTV's remaining businesses.
 Consolidated sales for the first six months were $2.92 billion compared with $2.99 billion for the first half of 1991. The $72 million decline was primarily caused by the absence of AM General sales, partially offset by higher volume in steel and increased missiles sales.
 Sales and income for AM General, which was sold as part of the company's plan to divest all of its aerospace and defense operations, are excluded from LTV's 1992 financial results. LTV also has entered into definitive agreements to sell its aircraft and missiles divisions. Their results, however, are reported as continuing operations pending resolution of uncertainties surrounding approval and finalization of the sales.
 Operating results continue to reflect charges stemming from the company's adoption in 1988 of a change in accounting for postemployment medical and life insurance benefits. Because of the accounting change, LTV's results are proportionately worse than those of companies which have not yet adopted this standard.
 For LTV's operating groups, the negative incremental effect of this method of accounting was (in millions):
 LTV CORPORATION
 Second Quarter Year-to-Date
 1992 1991 1992 1991
 Steel $33.7 $32.1 $69.5 $64.1
 Aerospace and Defense 2.6 17.6(A) 16.0 35.9(A)
 Energy Products (0.1) 0.0 (0.2) 0.2
 Total Effect on Operating
 Income (Loss) $36.2 $49.7 $85.3 $100.2
 (A)Includes $3.1 million and $6.3 million, respectively, for AM General.
 LTV's cash and cash equivalents totaled $1.15 billion as of June 30, 1992, compared with $1.17 billion at Dec. 31, 1991. The company also had available credit of $123.6 million.
 Steel Operations
 LTV's steel operations recorded an operating loss of $28.4 million for the quarter, compared with a loss of $23.4 million in the same period of 1991. Sales increased 7 percent to $947.2 million, and shipments increased 8 percent to 1.88 million tons.
 The operating loss reflects lower selling prices and higher employment costs, primarily from increased hourly wage and incentive rates required under the USWA labor agreement currently in force.
 The steel plant operating rate during the quarter increased to 84 percent of capacity from 80 percent in the second quarter of 1991.
 "We were encouraged by rising shipments of hot rolled, cold rolled and galvanized products used by our automotive, service center and converter customers," Hoag said.
 "Shipments are up, purchased material costs are down and operating costs have been reduced, but these gains are not sufficient to offset persistently low prices which continue to impede the company's financial performance."
 For the six month period ending June 30, LTV Steel had an operating loss of $81.0 million on sales of $1.82 billion, compared with a loss of $72.2 million on sales of $1.68 billion in the first half of 1991. The increased loss was due primarily to lower selling prices and higher employment costs. Shipments for the first six months were 355,000 tons higher than a year earlier, and the plant operating rate increased to 85 percent of capacity compared with 77 percent in the first half of 1991.
 On July 16, LTV Steel and the United Steelworkers of America reached an agreement on a tentative new labor contract which is required for LTV to complete its Chapter 11 reorganization. The agreement is subject to bankruptcy court approval and ratification by the union membership.
 The agreement will result in structural changes to the fundamental cost components of the steel business, primarily in the areas of health care, manning and productivity. It is scheduled to become effective upon confirmation of a Plan of Reorganization and will continue until June 1, 1994.
 LTV Steel also has joined with 11 other major U. S. producers of flat rolled and plate steel to address problems caused by unfairly traded imports. Anti-dumping and countervailing duty petitions were filed June 30 with the U. S. Department of Commerce and the International Trade Commission against foreign companies which sell steel below costs or which benefit from government subsidies. Imports currently hold more than 17 percent of the U.S. steel market. Aerospace and Defense
 LTV's aerospace and defense business reported second quarter operating income of $22.4 million compared with $37.4 million in the second quarter of 1991.
 The $15 million decline was caused primarily by a favorable profit rate adjustment on commercial aircraft programs recorded in the 1991 quarter, and by the absence in 1992 of income from the AM General vehicle business. The decline was partially offset by an improved profit rate on certain commercial aircraft programs and by reduced charges for postemployment medical benefits resulting from a change in future benefits.
 Second quarter sales were $527 million, up $75 million from the second quarter of 1991, after exclusion of AM General sales. All major missile programs and the C-17 airlifter program recorded higher sales for the quarter, but were partially offset by declines in B-2 and A-7 aircraft program sales.
 For the first six months, aerospace and defense operating income was $31.8 million on sales of $983 million, compared with operating income of $44.7 million on sales of $1.15 billion in the first half of 1991.
 The decline in operating income for the six month period was due to higher than normal profit in the 1991 quarter on commercial aircraft programs and to the absence of results for AM General, offset in part by lower health care costs and increased activity on various missile programs.
 The aerospace and defense backlog at the end of the second quarter was $4 billion, including $918 million of unfunded programs.
 Energy Products
 LTV's energy products business recorded an operating loss of $2.9 million on sales of $56 million in the second quarter, compared with an operating loss of $2.5 million on sales of $75 million in the same period a year ago. The 1991 quarter included a $4.0 million writedown of a long term receivable.
 The decline in operating results is due primarily to lower sales in all divisions. The average number of domestic drilling rigs operating in the second quarter fell to 634, down 25 percent from a year earlier. The quarterly rig count was the lowest since 1940 due to a combination of depressed natural gas prices, uncertain oil prices and a continuing shift of exploration and production activities by the major and large independent oil companies to international markets.
 For the first six months, the energy products business had an operating loss of $4.8 million compared with a 1991 first half loss of $0.7 million. Sales for the six month period declined 25 percent, falling to $118 million from the 1991 level of $157 million.
 As of mid-year, U. S. demand for oil field drilling and production equipment was at the lowest point since record keeping began a half century ago. The number of domestic drilling rigs operating during the first half was 28 percent below the 1991 level.
 Chapter 11 Status
 On April 10, the U. S. Bankruptcy Court approved a bid of $300 million for LTV's missiles division by Thomson-CSF, a French defense electronics firm, and a bid of $150 million for LTV's aircraft division by the Carlyle Group, a Washington, D.C., investment banking firm.
 Thomson-CSF initiated steps to obtain government approval of the acquisition, but subsequently withdrew its application because of administration and congressional opposition.
 On July 23, New York-based Loral Corporation proposed a revised offer of $260 million for the missiles division, with Thomson-CSF owning a passive 6 percent equity interest. Concurrently, the Carlyle Group, in partnership with Northrop Corporation, raised its offering price for the aircraft division to $190 million.
 On July 28, Thomson-CSF withdrew from the proposed joint bid with Loral , and Loral announced it will move forward independently to acquire the missiles division.
 LTV is presently evaluating these proposals.
 A sale of the missiles and aircraft divisions is one of the last major requirements for LTV to complete its Chapter 11 reorganization.
 LTV is a diversified manufacturing company involved in steel, aerospace and defense, and energy products.
 THE LTV CORPORATION AND SUBSIDIARIES
 Summary of Consolidated Operations
 (dollars in millions, except per share data)
 Three Months Ended
 June 30,
 1992 1991
 Sales:
 Steel $ 947.2 $ 883.4
 Aerospace and Defense (A):
 Aircraft and Missiles Divisions 526.9 451.9
 AM General held for sale - 151.5
 Total 526.9 603.4
 Energy Products 56.2 74.5
 Sales between segments (0.1) (0.1)
 Total $ 1,530.2 $ 1,561.2
 Operating Income (Loss):
 Steel $ (28.4) $ (23.4)
 Aerospace and Defense (A):
 Aircraft and Missiles Divisions 22.4 31.5
 AM General held for sale - 5.9
 Total 22.4 37.4
 Energy Products (2.9) (2.5)
 Total (8.9) 11.5
 Gain on sale of AM General 150.0 -
 Interest and other income (expense), net (1.3) 3.7
 Income (loss) before taxes 139.8 15.2
 Income tax charge (1.2) (1.8)
 Net Income (Loss) $ 138.6 $ 13.4
 Earnings (Loss) Per Share:
 Fully diluted $ 0.95 $ 0.05
 Primary $ 1.08 $ 0.06
 Average number of common shares used
 in per share calculation (thousands):
 Fully diluted 146,225 132,190
 Primary 124,292 117,484
 Raw steel production - tons (millions) 2.058 1.948
 Steel plant operating rate (in percents) 84 80
 Steel shipments - tons (millions) 1.876 1.737
 Six Months Ended
 June 30,
 1992 1991
 Sales:
 Steel $ 1,816.8 $ 1,680.6
 Aerospace and Defense (A):
 Aircraft and Missiles Divisions 982.7 871.4
 AM General held for sale - 281.5
 Total 982.7 1,152.9
 Energy Products 117.9 156.6
 Sales between segments (0.3) (0.6)
 Total $ 2,917.1 $ 2,989.5
 Operating Income (Loss):
 Steel $ (81.0) $ (72.2)
 Aerospace and Defense (A):
 Aircraft and Missiles Divisions 31.8 33.5
 AM General held for sale - 11.2
 Total 31.8 44.7
 Energy Products (4.8) (0.7)
 Restructuring Costs (B) - (10.0)
 Total (54.0) (38.2)
 Gain on sale of AM General 150.0 -
 Interest and other income (expense), net 1.8 8.0
 Income (loss) before taxes 97.8 (30.2)
 Income tax charge (2.5) (2.7)
 Net Income (Loss) $ 95.3 $ (32.9)
 Earnings (Loss) Per Share:
 Fully diluted $ 0.62 $ (0.39)
 Primary $ 0.70 $ (0.39)
 Average number of common shares used
 in per share calculation (thousands):
 Fully diluted 138,697 116,091
 Primary 124,035 116,091
 Raw steel production - tons (millions) 4.143 3.742
 Steel plant operating rate (in percents) 85 77
 Steel shipments - tons (millions) 3.629 3.274
 (A) As a result of the approval by the Bankruptcy Court in January 1992 to sell AM General (which is a portion of a line of business), AM General's sales and operating results have been excluded from 1992 and segregated from 1991 aerospace and defense amounts. The AM General sale closed on April 30, 1992. Cash proceeds were $67.5 million. The gain resulted primarily from the assumption by the buyer of $125.9 million of postemployment benefit obligations and is net of state taxes of $1.9 million. Due to the significant uncertainties surrounding the sale of the remaining aerospace and defense businesses, such results will continue to be reported as continuing operations until appropriate approvals are given. The Bankruptcy Court, subject to such approvals, approved the sale of the aircraft and missiles divisions in April 1992.
 (B) During the first quarter of 1991, the company incurred restructuring costs affecting operating income (loss) of $5.9 million for steel, $3.7 million for aircraft and missiles divisions, $0.2 million for AM General and $0.2 million for Energy Products.
 The company routinely reports per share information, calculated in accordance with generally accepted accounting principles, but it believes such figures for a company operating under Chapter 11, with a substantial shareholders' deficit, have little significance.
 -0- 7/28/92
 /CONTACT: Charles M. Palmer of LTV Corporation, 214-979-7941/
 (LTV) CO: LTV Corporation ST: Texas IN: ARO SU: ERN


SH -- NY080 -- 4218 07/28/92 15:57 EDT
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