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USX - MARATHON GROUP ANNOUNCES THIRD QUARTER FINANCIAL RESULTS

 USX - MARATHON GROUP ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
 PITTSBURGH, Oct. 27 /PRNewswire/ -- USX Corporation (NYSE: X) Board Chairman Charles A. Corry announced third quarter 1992 net income for the USX - Marathon Group (NYSE: MRO) of $17 million, or $.05 per share, compared with net income of $23 million, or $.08 per share, in the third quarter of 1991.
 Third quarter 1992 sales were $3.4 billion, compared with $3.5 billion in the third quarter of 1991.
 The Marathon Group reported third quarter 1992 operating income of $100 million, compared with $111 million in the third quarter of 1991. Third quarter 1992 operating income included a favorable noncash adjustment to the inventory market valuation reserve of $38 million. Third quarter 1991 operating income included a $20 million favorable adjustment of production tax accruals for prior periods.
 Corry also announced that the board of directors had declared a dividend of 17 cents per share on USX - Marathon Group Common Stock, payable Dec. 10, 1992, to stockholders of record at the close of business Nov. 6, 1992. The dividend of 17 cents per share compares with a dividend of 35 cents per share declared last quarter.
 Corry noted that, "The board determined it prudent to reduce the dividend in order to maintain financial strength and flexibility while continuing to invest heavily in a number of attractive projects. These projects are expected to materially enhance Marathon's production profiles beginning in late 1993. Marathon Group's profitability and cash flow have been negatively affected by depressed refined product margins in 1992. These depressed margins stem primarily from low petroleum product price levels relative to crude oil."
 Third quarter 1992 operating income from worldwide exploration and production ("upstream") activities was $46 million compared with $34 million in the same period last year. Domestic upstream operating income was $39 million, an increase of $33 million from the third quarter of 1991. Third quarter 1992, international upstream operating income, which was negatively affected by lower liquid hydrocarbon volumes from the United Kingdom sector of the North Sea, was $7 million compared with $28 million in the third quarter last year.
 Operating income from refining, marketing and transportation ("downstream") activities was $23 million in the third quarter of 1992 compared with $85 million in the third quarter of 1991. The decline primarily reflects the depressed refined product margins discussed previously. In addition to low petroleum product price levels relative to crude oil, third quarter 1992 margins were negatively affected by maintenance costs accrued for turnaround activity to be completed at the Garyville (La.) refinery later this year. Gasoline margins may be adversely affected if the increased costs of producing oxygenated fuels required by the 1990 amendments to the Clean Air Act cannot be passed along to the consumer.
 In September, Marathon announced it had reached an agreement for the sale of an additional portion of natural gas production from the Brae Area in the U.K. North Sea. As a result of this agreement, Marathon will begin shipping over 112 million cubic feet per day of natural gas to customers in the U.K. in 1994. Also in September, the Ashrafi Field in Egypt began production, one month ahead of schedule. The initial rate was 3,000 gross barrels of oil per day (b/d) and it is expected the field will reach its targeted rate of 22,000 b/d by early 1993. Marathon holds a 50 percent working interest in the field.
 In Russia, two delineation wells were drilled offshore Sakhalin Island to acquire additional reservoir and fluid information in support of the feasibility study being conducted by the M/M/M Consortium for the development of offshore oil and gas fields. It was also announced that a member company of the Royal Dutch/Shell Group will join Marathon, McDermott and Mitsui and participate as part of the consortium, both in the feasibility study and any subsequent development activity.
 On Oct. 2, 1992, USX Corporation completed a public offering of nine million shares of USX - Delhi Group (NYSE: DGP) Common Stock. The third quarter of 1992 is the final quarter in which Marathon Group results will include the results of the companies comprising the USX - Delhi Group. The Marathon Group financial statements will reflect an initial 36 percent retained interest in the Delhi Group. Third quarter 1992 pro forma Delhi Group results are being reported separately in order to provide holders of the Delhi Stock with information concerning the Group's performance.
 USX plans to adopt two new accounting standards in the fourth quarter which will result in the first three quarters of 1992 being restated. Statement of Financial Accounting Standard (SFAS) 106 "Employers' Accounting for Postretirement Benefits Other than Pensions" requires accrual of future retiree medical and life insurance benefits. The immediate recognition of the transition obligation measured as of Jan. 1, 1992, will be reported as a change in accounting principle and will decrease the Marathon Group's previously reported first quarter 1992 net income by approximately $125 million, net of tax. The Marathon Group's ongoing pretax operating costs will also increase under this standard. For 1992, the annual increase is estimated at $10 million which will also be reflected in the restated quarterly results.
 The second accounting standard, SFAS 109 "Accounting for Income Taxes" requires a liability approach for measuring deferred income taxes. The estimated cumulative effect of adopting this standard as of Jan. 1, 1992, is in the range of $150 to $250 million, which will also be reported as a change in accounting principle and will decrease previously reported first quarter 1992 net income. In addition, the estimated incremental 1992 income tax expense associated with adoption of the new standard is approximately $40 million, which will be reflected in the restated quarterly results.
 The Group's cash flows will not be affected by the adoption of these two accounting standards. The amounts disclosed are subject to revision based on continuing evaluation of certain provisions of the standards and potential fourth quarter transactions.
 In addition to the dividend on USX - Marathon Group Common Stock discussed previously, the directors declared a dividend of $.9875 per share on USX Corporation's adjustable rate cumulative preferred stock, payable Dec. 31, 1992, to stockholders of record at the close of business Dec. 1, 1992.
 USX - Marathon Group's supplemental statistics and condensed financial statements, as well as USX Corporation's condensed consolidated financial statements, follow. The Marathon Group financial statements include the results of operations and financial position of the Delhi Group.
 USX - MARATHON GROUP
 CONDENSED STATEMENT OF INCOME (Unaudited)
 Third Qtr. Ended
 September 30
 (In Millions Except Per Share Data) 1992 1991
 SALES $ 3,382 $ 3,488
 Total operating costs (3,282) (3,377)
 Operating income 100 111
 Other income (loss) 4 10
 Net interest and other financial costs (60) (61)
 Total income before taxes on income 44 60
 Less provision for estimated income
 taxes - United States 10 28
 - Foreign 17 9
 NET INCOME 17 23
 Dividends on preferred stock (2) (1)
 NET INCOME APPLICABLE TO MARATHON STOCK $ 15 $ 22
 Per common share data:
 Primary:
 Weighted average shares, in thousands 285,184 256,417
 Net income $ .05 $ .08
 Fully diluted:
 Weighted average shares, in thousands 285,184 256,422
 Net income $ .05(A)$ .08(A)
 Dividends paid .35 .35
 USX - MARATHON GROUP
 CONDENSED STATEMENT OF INCOME (Unaudited)
 Nine Months Ended
 September 30
 (In Millions Except Per Share Data) 1992 1991
 SALES $ 9,544 $10,404
 Total operating costs (9,125) (9,898)
 Operating income 419 506
 Other income (loss) (3) 32
 Net interest and other financial costs (23) (238)
 Total income before taxes on income 393 300
 Less provision for estimated income
 taxes - United States 88 132
 - Foreign 27 10
 NET INCOME 278 158
 Dividends on preferred stock (5) (5)
 NET INCOME APPLICABLE TO MARATHON STOCK $ 273 $ 153
 Per common share data:
 Primary:
 Weighted average shares, in thousands 282,559 255,238
 Net income $ .97 $ .60
 Fully diluted:
 Weighted average shares, in thousands 288,805 255,249
 Net income $ .97 $ .60(A)
 Dividends paid 1.05 .96
 CONDENSED BALANCE SHEET (Unaudited)
 September 30 December 31
 (In Millions) 1992 1991
 ASSETS
 Cash and cash
 equivalents $ 591 $ 200
 Receivables - net 622 621
 Inventories 1,431 1,235
 Other current assets 117 97
 Total current assets 2,761 2,153
 Property, plant and
 equipment - net 8,786 8,796
 Other assets 738 695
 Total $12,285 $11,644
 CONDENSED BALANCE SHEET (Unaudited)
 September 30 December 31
 (In Millions) 1992 1991
 LIABILITIES AND
 STOCKHOLDERS' EQUITY
 Current liabilities $ 2,806 $ 2,467
 Long-term debt 3,829 4,073
 Other liabilities 1,786 1,809
 Total liabilities 8,421 8,349
 Preferred stock 80 80
 Common stockholders'
 equity 3,784 3,215
 Total $12,285 $11,644
 (A) Conversion of convertible debentures excluded from fully diluted computation because of antidilutive effects.
 The following notes are an integral part of these financial statements.
 USX - MARATHON GROUP
 SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS
 The condensed financial statements of the Marathon Group include the results of operations and financial position for the Energy segment and a portion of the corporate assets, liabilities and related transactions that are not separately identified with ongoing operating units of USX. These condensed financial statements should be read in connection with the condensed consolidated financial statements of USX.
 In the first nine months of 1992, the inventory market valuation reserve was reduced by $160 million to $100 million, which increased operating income and net income by $160 million ($38 million in the third quarter of 1992).
 The Board of Directors approved restructuring actions involving the disposition of nonstrategic domestic exploration and production properties, which resulted in a $115 million pretax charge to operating income in the second quarter of 1992. In the first quarter of 1991, operating income included a $24 million pretax charge for a number of restructuring actions.
 Pretax income in the first nine months of 1992 included a settlement of a production tax refund claim for the years 1982 through 1985. The refund resulted in a credit to operating income of $119 million as well as interest income of $177 million in the second quarter of 1992. Net interest and other financial costs in the third quarter of 1991 included $26 million of interest income related to prior years' production taxes. Other income also included a $19 million impairment of a 25 percent interest in a natural gas transmission partnership recorded in the first quarter of 1992.
 The provision for estimated U.S. and foreign income taxes for the periods reported is based on tax rates and amounts which recognize management's best estimate of annual financial and taxable income. The inventory market valuation credit is excluded from the determination of the U.S. income tax provision, since the adjusted book inventory value exceeds the tax inventory value.
 In January 1992, USX sold 25 million shares of USX - Marathon Group Common Stock to the public for net proceeds of $541 million which have been reflected in their entirety in the financial statements of the Marathon Group.
 On Oct. 2, 1992, USX sold 9,000,000 shares of a new class of common stock, USX - Delhi Group Common Stock (Delhi Stock), which is intended to reflect the performance of the Delhi Group. The Delhi Group consists of the Delhi Gas Pipeline Corporation and certain related companies which are engaged in the purchasing, gathering, processing, transporting and marketing of natural gas. Prior to the sale of Delhi Stock, the businesses of the Delhi Group had been part of the Marathon Group and their results of operations and financial condition had been reflected in their entirety in the financial statements of the Marathon Group. Net proceeds of $136 million from the sale will be directly reflected in the Marathon Group financial statements in the fourth quarter of 1992. The Marathon Group financial statements will initially reflect a Retained Interest of 35.71 percent in the Delhi Group.
 USX - MARATHON GROUP
 SUPPLEMENTAL STATISTICS
 ($'s in Millions)
 Third Quarter Nine Months
 Ended Ended
 September 30 September 30
 1992 1991 1992 1991
 SALES $3,382 $3,488 $9,544 $10,404
 OPERATING INCOME (LOSS)
 Energy Segment
 Explorat. & Product. $ 46 $ 34 $ 157 $ 237
 Refin., Market. & Trans. 23 85 119 318
 Gas Gathering & Processing 4 - 20 23
 Unallocated Administrative (8) (8) (29) (13)
 Special Items 38 20 164 (4)
 Total Energy Segment 103 131 431 561
 USX Corporate (3) (20) (12) (55)
 Total Marathon Group $ 100 $ 111 $ 419 $ 506
 CAPITAL EXPENDITURES $ 334 $ 257 $ 778 $ 613
 EXPLORATION EXPENSE $ 39 $ 54 $ 110 $ 120
 OPERATING STATISTICS
 Net Liquids Production:
 Domestic (A) 117.0 127.8 119.4 128.3
 International (A) 52.8 69.4 57.1 67.2
 Worldwide 169.8 197.2 176.5 195.5
 Net Natural Gas Production:
 Domestic (B) 543.1 645.9 617.6 705.1
 International (B) 306.4 273.5 334.5 320.2
 Worldwide 849.5 919.4 952.1 1,025.3
 Average Sales Prices:
 Liquid Hydrocarbons (per Bbl)
 Domestic $17.73 $17.53 $16.46 $17.46
 International 19.74 19.03 19.05 18.96
 Natural Gas (per Mcf)
 Domestic $ 1.58 $ 1.32 $ 1.50 $ 1.58
 International 1.68 1.89 1.79 2.16
 Crude Oil Refined (A) 565.6 509.2 552.0 543.1
 Refined Products Sold (A) 727.8 697.7 695.2 691.8
 Gas Gathering Throughput (B) 895.1 801.6 937.0 848.1
 (A) 000 BPD
 (B) MMCFPD
 USX CORPORATION AND SUBSIDIARY COMPANIES
 CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
 Third Qtr. Ended
 September 30
 (In Millions Except Per Share Data) 1992 1991
 SALES $ 4,650 $ 4,767
 Total operating costs (4,538) (4,626)
 Operating income 112 141
 Other income (loss) 4 24
 Net interest and other financial costs (99) (98)
 Total income (loss) before taxes on income 17 67
 Less provision (credit) for estimated
 income taxes - United States (11) 30
 - Foreign 18 9
 NET INCOME (LOSS) 10 28
 Dividends on preferred stock (3) (2)
 NET INCOME (LOSS) APPLICABLE TO COMMON
 STOCKS $ 7 $ 26
 Common share data - Marathon Stock
 Net income $ 15 $ 22
 Primary net income per share .05 .08
 Fully diluted net income per share .05(A) .08(A)
 Dividends paid per share .35 .35
 Common share data - Steel Stock
 Net income (loss) $ (8) $ 4
 Primary net income (loss) per share (.13) .09
 Fully diluted net income (loss) per share (.13)(A) .09(A)
 Dividends paid per share .25 .25
 USX CORPORATION AND SUBSIDIARY COMPANIES
 CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
 Nine Months Ended
 September 30
 (In Millions Except Per Share Data) 1992 1991
 SALES $ 13,238 $ 13,952
 Total operating costs (12,738) (13,897)
 Operating income 500 55
 Other income (loss) (1) 38
 Net interest and other financial costs (141) (344)
 Total income (loss) before taxes on income 358 (251)
 Less provision (credit) for estimated
 income taxes - United States 66 (77)
 - Foreign 28 10
 NET INCOME (LOSS) 264 (184)
 Dividends on preferred stock (7) (7)
 NET INCOME (LOSS) APPLICABLE TO COMMON
 STOCKS $ 257 $ (191)
 Common share data - Marathon Stock
 Net income $ 273 $ 153
 Primary net income per share .97 .60
 Fully diluted net income per share .97 .60(A)
 Dividends paid per share 1.05 .96
 Common share data - Steel Stock
 Net income (loss) $ (16) $ (344)
 Primary net income (loss) per share (.29) (6.75)
 Fully diluted net income (loss) per share (.29)(A) (6.75)(A)
 Dividends paid per share .75 .69
 CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
 September 30 December 31
 (In Millions) 1992 1991
 ASSETS
 Cash and cash
 equivalents $ 856 $ 279
 Receivables - net 1,066 1,098
 Inventories 2,152 1,858
 Other current assets 118 101
 Total current assets 4,192 3,336
 Property, plant and
 equipment - net 11,628 11,593
 Other assets 2,280 2,110
 Total $18,100 $17,039
 CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
 September 30 December 31
 (In Millions) 1992 1991
 LIABILITIES AND
 STOCKHOLDERS' EQUITY
 Current liabilities $ 4,125 $ 3,551
 Long-term debt 5,788 5,921
 Other liabilities 2,479 2,580
 Total liabilities 12,392 12,052
 Preferred stock 105 105
 Common stockholders'
 equity 5,603 4,882
 Total $18,100 $17,039
 (A) Conversion of convertible debentures excluded from fully diluted computation because of antidilutive effects.
 The following notes are an integral part of these financial statements.
 USX CORPORATION AND SUBSIDIARY COMPANIES
 SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 The financial information for the Marathon Group and the U. S. Steel Group, taken together, includes all accounts which comprise the corresponding consolidated financial information for USX.
 The numbers of shares used in the computation of earnings per share were as follows:
 (In Thousands)
 Third Quarter Ended
 September 30
 1992 1991
 Marathon Stock - primary 285,184 256,417
 - fully diluted 285,184 256,422
 Steel Stock - primary 59,388 51,064
 - fully diluted 59,388 51,078
 (In Thousands)
 Nine Months Ended
 September 30
 1992 1991
 Marathon Stock - primary 282,559 255,238
 - fully diluted 288,805 255,249
 Steel Stock - primary 54,492 50,935
 - fully diluted 54,492 50,935
 In the first nine months of 1992, the inventory market valuation reserve was reduced by $160 million to $100 million, which increased operating income and net income by $160 million ($38 million in the third quarter of 1992).
 The Board of Directors approved restructuring actions involving the disposition of nonstrategic domestic exploration and production properties, which resulted in a $115 million pretax charge to operating income in the second quarter of 1992. In the first quarter of 1991, operating income included a $346 million pretax charge for a number of restructuring actions primarily related to steel operations.
 Pretax income in the first nine months of 1992 included the settlement of a production tax refund claim for the years 1982 through 1985. The refund resulted in a credit to operating income of $119 million as well as interest income of $177 million in the second quarter of 1992. Net interest and other financial costs in the third quarter of 1991 included $26 million of interest income related to prior years' production taxes. Other income also included a $19 million impairment of a 25 percent interest in a natural gas transmission partnership recognized in the first quarter of 1992.
 The provision for estimated U.S. and foreign income taxes for the periods reported is based on tax rates and amounts which recognize management's best estimate of annual financial and taxable income. The inventory market valuation credit is excluded from the determination of the U.S. income tax provision since the adjusted book inventory value exceeds the tax inventory value.
 USX sold 25 million shares of Marathon Stock to the public for net proceeds of $541 million and 8.05 million shares of Steel Stock to the public for net proceeds of $198 million in the first and second quarters of 1992, respectively.
 Following approval by the common stockholders, the USX Certificate of Incorporation was amended on Sept. 30, 1992, to provide for the issuance of a new class of common stock, USX - Delhi Group Common Stock (Delhi Stock), which is intended to reflect the performance of the Delhi Group. The Delhi Group consists of the Delhi Gas Pipeline Corporation and certain related companies which are engaged in the purchasing, gathering, processing, transporting and marketing of natural gas. On Oct. 2, 1992, USX sold 9,000,000 shares of Delhi Stock. Net proceeds of $136 million from the sale will be recognized in the fourth quarter of 1992.
 USX plans to adopt two new accounting standards in the fourth quarter which will result in the first three quarters of 1992 being restated. Statement of Financial Accounting Standard No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," requires accrual of future retiree medical and life insurance benefits. The immediate recognition of the transition obligation measured as of Jan. 1, 1992, will be reported as a change in accounting principle and will decrease USX's previously reported first quarter 1992 net income by approximately $1.2 billion, net of tax. USX's ongoing pretax operating costs will also increase under this standard. For 1992, this annual increase is estimated at $70 million which will also be reflected in the restated quarterly results.
 The second accounting standard, Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes," requires a liability approach for measuring deferred income taxes. The estimated cumulative effect of adopting this standard as of Jan. 1, 1992, is in the range of $300 million to $500 million, which will also be reported as a change in accounting principle and will decrease previously reported first quarter 1992 net income. In addition, the estimated incremental 1992 income tax expense associated with adoption of the new standard is approximately $60 million, which will also be reflected in the restated quarterly results.
 Cash flows will not be affected by the adoption of these two accounting standards. The amounts disclosed are subject to revision based on continuing evaluation of certain provisions of the standards and fourth quarter transactions.
 /delval/
 -0- 10/27/92 R
 /CONTACT: W.E. Keslar or D.H. Herring of USX Corporation, 412-433-6870/
 (X MRO DGP) CO: USX Corporation; USX - Marathon Group; USX - Delhi Group ST: Pennsylvania IN: OIL MNG SU: ERN


DM -- PG002 -- 5443 10/27/92 13:15 EST
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