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LTV REPORTS $129 MILLION FOURTH QUARTER LOSS

 CLEVELAND, Feb. 2 /PRNewswire/ -- The LTV Corporation (NYSE: QLTV) today reported a fourth quarter net loss of $129.0 million, compared with a net loss of $8.5 million in the fourth quarter of 1991.
 The loss includes a $140 million extraordinary charge for LTV's estimated liability related to the Coal Industry Retiree Health Benefit Act of 1992. The extraordinary charge was partially offset by a $60 million special credit from the reversal of reserves established in connection with the 1988 sale of LTV Steel's former Warren, Ohio facility.
 Absent the $140 million extraordinary item and the $60 million special credit, LTV would have had a net loss for the quarter of $49.0 million.
 The Coal Industry Retiree Health Benefit Act is a new law enacted in late 1992 containing an unusual "reach back" provision affecting former employers of coal miners, including companies no longer in the coal mining business. The effect of the reach back provision is to require previous owners of mines to fund benefits for long-retired coal miners, some of whom never worked for the companies at all, and others with whom the companies have had no relationship for decades.
 On Jan. 29, LTV began litigation contending the act is unconstitutional and improperly imposes obligations which LTV has already paid in full.
 LTV Chairman and Chief Executive Officer David H. Hoag said, "LTV believes the current Congress should rescind or modify the legislation. LTV and dozens of other companies paid retiree medical and death benefits as long as they operated the mines. All of LTV's obligations to its former coal mine employees have been fulfilled."
 Consolidated Operating Results
 LTV's consolidated sales for the fourth quarter totaled $947 million compared with sales of $925 million in the year earlier quarter. Sales of steel products increased by $24 million for the quarter, while oil field supply sales declined by approximately $1 million.
 Sales and income for the fourth quarter of 1991 and the 12 month periods of 1991 and 1992 have been adjusted to reflect the 1992 sale of LTV's former aerospace and defense businesses. Aerospace and defense results are reported as income from discontinued operations.
 Fourth quarter operating income was $13.4 million compared with an operating loss of $70.3 million in the fourth quarter of 1991. Results for the current quarter reflect the $60 million special credit and a $23.7 million improvement in steel and energy products operations.
 Interest and other income for the current quarter was $64.2 million less than a year ago primarily because 1991 results included $53.3 million of interest income related to a federal income tax refund.
 For the 12-month period ending Dec. 31, net income rose to $598.7 million, compared with net income of $74.1 million for all of 1991. The improvement was attributable to a gain of $737 million on the sale of the aerospace and defense businesses. Improved 1992 results were offset by the $140 million fourth quarter extraordinary charge.
 Results for the 12 month period in 1991 included a $129.7 million federal income tax refund and $53.3 million of related interest.
 Consolidated sales for 1992 were $3.83 billion compared with a year earlier total of $3.70 billion. Steel sales increased by $172 million for the year, while energy products sales declined by $47 million.
 The operating loss for the 12-month period was $122.0 million compared with a year earlier loss of $224.2 million. The 1992 results include the $60 million special credit for reversal of the Warren plant reserve and a combined improvement of $36 million in the operations of the steel and energy products businesses.
 "The poor financial results for the quarter and the year resulted primarily from low prices and low sales volumes caused, in part, by the recession," Hoag said. "In addition, unfairly priced and subsidized steel imports have been taking away sales and pushing down prices. If the economy recovers, as expected, and pending trade litigation corrects the unfair advantages enjoyed by foreign steel companies, we hope to see higher shipments, higher product prices and overall improvement in our 1993 operating results.
 "The margins, or tariffs, set recently by the Department of Commerce's preliminary rulings on foreign dumping of steel in the U.S. market, and margin sset previously on subsidized foreign steel," Hoag said, "show the extent to which U.S. trade laws have been violated. It is imperative that the trade cases be fully pursued."
 Operating results for 1992 continue to reflect charges stemming from the company's adoption in 1988 of a change in accounting for postemployment medical and life insurance benefits. Beginning in 1993, publicly traded companies will be required to adopt similar standards recognizing their postemployment benefits liability.
 For LTV's operating groups, the fourth quarter and 12-month negative incremental effects of accounting for postemployment benefits was (in millions):
 Fourth Quarter Year-to-date
 1992 1991 1992 1991
 Steel $32.5 $41.8 $131.1 $139.0
 Energy Products (0.1) (0.5) (0.6) (0.3)
 Total Effect on Operating
 Income (Loss) $32.4 $41.3 $130.5 $138.7
 LTV's cash and cash equivalents increased to $1.63 billion as of Dec. 31, 1992, compared with $1.17 billion at Dec. 31, 1991, primarily as a result of cash proceeds from the sale of aerospace and defense businesses. The company also had available credit at year end of $125.2 million.
 Steel Operations
 LTV's steel business recorded a fourth quarter operating loss of $49.1 million, compared with a loss of $54.0 million in the same period of 1991. Increased shipments and improved cost performance during the quarter were largely offset by lower selling prices. Prices remained at ten-year-ago levels, due in large part to the significant presence in the U.S. market of unfairly traded imported steel.
 Fourth quarter sales increased to $874 million on shipments of 1.78 million tons, compared with sales of $850 million and shipments of 1.65 million tons a year earlier. The steel plant operating rate during the quarter was 85 percent of capacity compared with an 84 percent operating rate in the corresponding quarter of 1991.
 For the 12-month period ending Dec. 31, LTV Steel had an operating loss of $178.2 million on sales of $3.56 billion, compared with a loss of $202.8 million on sales of $3.39 billion in the full year of 1991. Shipments for the year increased by 542,000 tons from a year earlier, and the plant operating rate increased to 85 percent of capacity compared with 78 percent for 1991.
 The improvement in 1992 steel operating results, compared with 1991, was due primarily to higher manufacturing costs in 1991 related to the scheduled relining of a blast furnace. The benefits of increased shipments, improved cost performance and cost reductions in 1992 were offset, for the most part, by lower selling prices and higher employment costs related to the labor agreement currently in effect.
 The demand for steel products during the year was higher among the automotive, service center and converter markets, but lower among the containers and packaging, electrical, agricultural and other machinery and export markets. Shipments of hot rolled and cold rolled sheets and galvanized products increased, while shipments of tin mill products decreased.
 "We are encouraged by the recent incoming order rate," Hoag said. "The volume of new orders received in December and January are at the highest levels in several years, suggesting that the domestic economy is strengthening. This, we believe, along with the enforcement of U. S. trade laws, will combine to support an improved financial performance. Nevertheless," Hoag said, "we continue to further reduce costs and increase productivity in order to improve results, an objective of vital importance to all of our constituents."
 Energy Products
 LTV's energy products business recorded operating income of $2.5 million on sales of $74 million in the fourth quarter, compared with an operating loss of $16.3 million on sales of $74 million in the same period a year ago.
 The 1991 fourth quarter operating loss was due primarily to the recording of significant reserves and write downs, while 1992 fourth quarter operating income was due in part to much smaller, but favorable inventory adjustments.
 Sales and profit margins continue to be adversely affected by the oil and gas industry's low rate of domestic exploration and drilling activity. An average of 871 drilling rigs operated in the U. S. during the fourth quarter -- up only 9 percent from the same time a year earlier. The low rate of domestic activity, which has prevailed since the mid-1980s, is attributed to depressed natural gas prices and uncertain oil prices.
 For the 12 months of 1992, LTV Energy Products had an operating loss of $3.8 million compared with an operating loss of $15.3 million for the year earlier. Sales for the 12 months declined to $263 million, down 15 percent from the 1991 level of $310 million. An average of 717 domestic drilling rigs operated during the year, a decline of 17 percent from the 1991 average of 860 rigs operating.
 Discontinued Operations
 The sale of LTV's remaining aerospace and defense businesses -- the Missiles Division and the Aircraft Division -- took place on Aug. 31, 1992. After finalization of the sales, proceeds included $469 million cash and $25 million preferred stock. The sale of LTV's AM General vehicle business closed on April 30, 1992, resulting in cash proceeds which have to date totaled $72.5 million.
 Aerospace/defense income of $96.8 million for 1992 and $102.8 million for 1991 is reported as income from discontinued operations.
 The net gain on the sale of these businesses was $737 million, resulting primarily from the buyers' assumption of approximately $900 million of postemployment medical and life insurance liabilities.
 Other
 In 1992, LTV made substantial progress in its reorganization. In addition to successfully completing the sale of its aerospace and defense businesses, the company negotiated a new labor agreement that is expected to save the company $60 million per year.
 On Jan. 19, 1993, LTV filed a modified Chapter 11 Plan of Reorganization and Disclosure Statement with the United States Bankruptcy Court. A hearing on the Disclosure Statement is scheduled for Feb. 17.
 The Disclosure Statement outlines proposed recoveries for LTV creditors and equity holders, as well as the capital structure and projected earnings and cashflows of the post-Chapter 11 company. If approved by the court, the plan is expected to be submitted to a vote of creditors and shareholders in March.
 LTV is a diversified manufacturing company involved in steel and energy products.
 SUMMARY OF CONSOLIDATED OPERATIONS
 The LTV Corporation and Subsidiaries
 (dollars in millions, except per share data)
 Three Months Ended
 December 31,
 1992 1991
 Sales:
 Steel $ 874.5 $ 850.4
 Energy Products 73.6 74.3
 Sales between segments (0.9) -
 Total $ 947.2 $ 924.7
 Operating Income (Loss):
 Steel $ (49.1) $ (54.0)
 Energy Products 2.5 (16.3)
 Special credit (charges) (A) 60.0 -
 Total 13.4 (70.3)
 Interest and other income (expense), net (B) (6.2) 58.0
 Income (loss) from continuing operations
 before income taxes and extraordinary item 7.2 (12.3)
 Income tax (provision) credit (C) (1.2) (1.5)
 Income (loss) from continuing operations
 before extraordinary item 6.0 (13.8)
 Discontinued Operations (D):
 Income from operations of aerospace and
 defense businesses - 5.3
 Gain on disposal of aerospace and defense
 businesses 5.0 -
 Income (loss) before extraordinary item 11.0 (8.5)
 Extraordinary item-charge related to the
 Coal Industry Retiree Health Benefit Act
 of 1992 (E) (140.0) -
 Net Loss $ (129.0) $ (8.5)
 Earnings (Loss) Per Share:
 Fully diluted
 Continuing operations $ 0.01 $ (0.16)
 Discontinued operations 0.04 0.04
 Extraordinary item (1.15) -
 Net Loss $ (1.10) $ (0.12)
 Primary
 Continuing operations $ 0.01 $ (0.16)
 Discontinued operations 0.04 0.04
 Extraordinary item (1.15) -
 Net Loss $ (1.10) $ (0.12)
 Average number of common shares used
 in per share calculation (thousands):
 Fully diluted 121,534 119,253
 Primary 121,534 119,253
 Raw steel production - tons (millions) 2.090 2.064
 Steel plant operating rate (pct) 85 84
 Steel shipments - tons (millions) 1.778 1.646
 Twelve Months Ended
 December 31,
 1992 1991
 Sales:
 Steel $ 3,564.9 $ 3,392.5
 Energy Products 262.5 309.9
 Sales between segments (1.5) (0.7)
 Total $ 3,825.9 $ 3,701.7
 Operating Income (Loss):
 Steel $ (178.2) $ (202.8)
 Energy Products (3.8) (15.3)
 Special credit (charges) (A) 60.0 (6.1)
 Total (122.0) (224.2)
 Interest and other income (expense), net (B) 32.1 71.5
 Income (loss) from continuing operations
 before income taxes and extraordinary item (89.9) (152.7)
 Income tax (provision) credit (C) (5.2) 124.0
 Income (loss) from continuing operations
 before extraordinary item (95.1) (28.7)
 Discontinued Operations (D):
 Income from operations of aerospace and
 defense businesses 96.8 102.8
 Gain on disposal of aerospace and defense
 businesses 737.0 -
 Income (loss) before extraordinary item 738.7 74.1
 Extraordinary item-charge related to the
 Coal Industry Retiree Health Benefit
 Act of 1992 (E) (140.0) -
 Net Income $ 598.7 $ 74.1
 Earnings (Loss) Per Share: (F)
 Fully diluted
 Continuing operations $ (0.66) $ (0.39)
 Discontinued operations 5.70 0.78
 Extraordinary item (0.95) -
 Net Income $ 4.09 $ 0.39
 Primary
 Continuing operations $ (0.90) $ (0.44)
 Discontinued operations 6.70 0.87
 Extraordinary item (1.12) -
 Net Income $ 4.68 $ 0.43
 Average number of common shares used
 in per share calculation (thousands):
 Fully diluted 146,259 132,636
 Primary 124,461 117,927
 Raw steel production - tons (millions) 8.293 7.652
 Steel plant operating rate (pct) 85 78
 Steel shipments - tons (millions) 7.171 6.629
 (A) -- During the fourth quarter of 1992, the company reversed previously established reserves related to the company's interest in a reversionary trust established in connection with the sale of its Warren, Ohio steel facility in 1988. During the first quarter of 1991, the company incurred restructuring costs of $5.9 million for Steel and $0.2 million for Energy Products.
 (B) -- Interest and other income (expense), net for the twelve months ended December 31, 1992 includes $38.1 million of income related to the collection of the Gulf States Steel note receivable. Interest and other income (expense), net for the three and twelve months of 1991 includes $53.3 million of interest income received in December 1991 which relates to the federal income tax refund (see (C) below). Interest and other income (expense), net includes Chapter 11 administrative expenses of $11.9 million and $8.2 million for the three months ended December 31, 1992 and 1991, respectively, and $36.7 million and $33.0 million for the twelve months of 1992 and 1991, respectively.
 (C) -- Income tax credit for the twelve months ended December 31, 1991 includes a $129.7 million refund pursuant to the Tax Reform Act of 1986 ("Tax Act") which provides for an elective 15 year carryback by steel companies of their unused investment tax credit carryforwards existing at December 31, 1985. Under the Tax Act, the tax refund must be used in the manufacture or production of steel.
 (D) -- As a result of the sale of the aircraft and missiles divisions on August 31, 1992, the operating results of the aerospace and defense businesses are reported as discontinued operations. The proceeds from the sales of the aircraft and missiles divisions consisted of $469 million of cash and $25 million of preferred stock. The AM General sale closed on April 30, 1992 and cash proceeds to date have been $72.5 million. The gains from the sales of the aerospace and defense businesses for the twelve months ended December 31, 1992 resulted primarily from the assumption by the buyers of approximately $900 million of postemployment benefit obligations. The income from operations of aerospace and defense businesses for the twelve months ended December 31, 1992 includes applicable income tax credits of $2.9 million, and for the three and twelve months ended December 31, 1991 includes applicable income tax provisions of $10.9 million and $13.5 million, respectively. The gain on disposal of aerospace and defense businesses for the twelve months ended December 31, 1992 is net of an applicable income tax provision of $4.9 million. The aerospace and defense businesses had sales of $1,320 million and $2,285 million for the twelve months ended December 31, 1992 and 1991, respectively, and $592 million for the three months ended December 31, 1991. As a direct result of the sale of the aerospace and defense businesses, the company provided $18.0 million for the relocation of LTV's corporate headquarters to Cleveland. This charge has been netted against the gain on sale of the aerospace and defense businesses.
 (E) -- During the fourth quarter of 1992, the company recorded a charge to recognize its estimated liability related to the requirements of the Coal Industry Retiree Health Benefit Act of 1992 ("Act"). The Act relates to the 1950 and 1974 Benefit Trusts which were established by the Bituminous Coal Operators' Association and the United Mine Workers of America. The Act creates a new multiemployer benefit plan called the United Mine Workers of America Combined Benefit Fund ("Combined Fund") which will provide medical and death benefits, beginning in 1993, to all beneficiaries in the 1950 and 1974 benefit plans who were actually receiving benefits as of July 20, 1992.
 (F) -- 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- 2/2/93
 /CONTACT: Charles M. Palmer, 214-979-7941; or Mark Tomasch, 216-622-4635; both of The LTV Corporation/
 (QLTV)


CO: The LTV Corporation ST: Ohio IN: MNG SU: ERN

KK -- CL011 -- 1908 02/02/93 13:08 EST
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