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

PRNewswire
PITTSBURGH
10.22.2001

USX-U. S. Steel Group (NYSE: X) today issued the following:

                             Earnings Highlights
             (Dollars in millions except per diluted share data)

                                                    3Q 2001     3Q 2000

  Net income (loss) adjusted for special items        $(18)        $25
      - per diluted share                           $(0.22)      $0.26

  Net income (loss)                                   $(23)        $19

  Net income (loss) per diluted share               $(0.28)      $0.19

  Revenues and other income                         $1,660      $1,475

USX-U. S. Steel Group (NYSE: X) reported an adjusted third quarter 2001 net loss of $18 million, or 22 cents per diluted share, compared with adjusted net income of $25 million, or 26 cents per diluted share, in the third quarter 2000.

U. S. Steel Group recorded a third quarter 2001 net loss of $23 million, or 28 cents per diluted share. Included was the net effect of special items related to the Fairless facility shutdowns and USS-POSCO insurance recoveries which together reduced net income by $5 million, or 6 cents per share. Third quarter 2000 net income of $19 million, or 19 cents per diluted share, included after-tax charges of $6 million related to USX's share of restructuring and impairment charges at Republic Technologies International, LLC.

In third quarter 2001, U. S. Steel Group recorded a loss frol's share of insurance recoveries in excess of facility repair costs for the cold mill fire at USS-POSCO on May 31, 2001. Aside from the insurance recoveries, U. S. Steel's share of USS-POSCO's operating results was adversely impacted by the higher cost of operations following the fire. Claims for reimbursement for such higher costs and lost volumes under USS-POSCO's business interruption insurance coverage are pending and will be reflected in income as received in future periods. The cold mill is expected to resume production during first quarter 2002, although full production may not be achieved until mid-year.

Domestic Steel shipments in third quarter 2001 were 2.6 million net tons, about the same as third quarter 2000. The average realized domestic steel price was $420 per ton in third quarter 2001 compared with $454 per ton in the third quarter 2000 and $429 per ton in the second quarter 2001. The reduction from the second quarter 2001 was primarily related to product mix.

Commenting on third quarter results for Domestic Steel, USX Corporation Board Chairman Thomas J. Usher said, "Domestic Steel's commercial environment remains extremely difficult due to the weakening economy and the devastating impact that global oversupply continues to have on the U.S. steel industry."

U. S. Steel Kosice, s.r.o. (USSK), the Slovak Republic steel operation acquired during the fourth quarter 2000, reported third quarter 2001 segment income of $39 million, or $39 per ton.

"USSK enjoyed another strong quarter in a difficult European and international commercial climate," Usher said. Total USSK shipments in third quarter 2001 were 1.0 million net tons, down from 1.1 million tons in second quarter 2001, as shipments of low value-added products declined. The average USSK realized steel price in the third quarter was $256 per ton, up from $249 per ton in second quarter 2001, with the increase primarily related to improved product mix and hot rolled pricing.

On August 14, 2001, U. S. Steel announced its intention to permanently close the cold rolling and tin mill operations at Fairless Works near Philadelphia on or around November 12, 2001. These facilities' combined annual finishing capacity is 1.5 million tons. U. S. Steel intends to continue operating Fairless Works' hot dip galvanizing line, subject to market conditions. A pretax charge of $29 million was recorded in the third quarter and an additional $6 to $11 million is expected to be recorded in the fourth quarter.

"Fairless Works was yet another American victim of dumped and subsidized steel," said Usher, "but we remain optimistic about the Bush Administration's commitment and strategy to restore a level playing field for American steel companies and their workers. As we await the resolution of the Section 201 cases, we will continue to encourage Congress and the Administration to address the import problem. In addition, we will continue to file trade cases against nations responsible for unfairly traded imports. In late September, we joined seven other steel producers in filing trade law actions against 20 countries who are major exporters of cold-rolled steel products to the U.S.

"Despite the current difficulties facing the steel industry, U. S. Steel has pursued strategic investments that we expect will enhance future profitability and shareholder value. During the third quarter, we continued development of Straightline, a new technology-enabled steel distributor, which will open for business in certain parts of the country in the fourth quarter with additional development and regional expansion planned for 2002. USSK continued with the tin mill expansion and vacuum degasser projects.

"During the third quarter, we also completed the repairs to the Mon Valley Works No. 3 blast furnace and, in light of expected slow market conditions in the fourth quarter, we plan to advance the schedule for a maintenance outage on the Gary Works No. 6 blast furnace. Additionally, USSK has scheduled several outages in the fourth quarter which are expected to limit shipments and increase repair and maintenance expenses."

Usher added, "The domestic order rate for the fourth quarter is currently running lower than the third quarter rate. For the full year 2001, we now expect total shipments to approximate 13.5 to 13.8 million net tons. Domestic Steel shipments should account for approximately 10 million net tons of the total and USSK about 3.5 to 3.8 million net tons."

In connection with the proposed separation of USX Corporation's steel and energy businesses, U. S. Steel completed two private placements of Senior Notes during the third quarter having an aggregate principal amount of $535 million. The proposed separation of the U. S. Steel Group and the Marathon Group into two independent companies is subject to approval at a special meeting of stockholders to be held on October 25. The reorganization is also subject to several other conditions including receipt of a favorable ruling from the Internal Revenue Service as to the tax-free status of the separation. The separation is expected to occur at year-end, subject to the absence of any materially adverse change in business conditions for the energy and/or steel business, delay in obtaining the IRS ruling or other unfavorable circumstances. Shareholders should note that failure to cast a vote will have the same effect as voting against the separation. Shareholders may vote in person, by returning their proxy card, or by telephone or Internet.

This release contains forward-looking statements with respect to the expected restart of the USS-POSCO cold rolling mill, the regional expansion of Straightline, market conditions, costs, shipments and prices. One factor, among others, that may affect the restart of the cold rolling mill at the USS- POSCO joint venture is the timing of completion of repairs. Some factors that could affect the expansion of Straightline include economic conditions and the customers' acceptance of this technology-based buying approach. Some factors, among others, that could affect full year 2001 market conditions, costs, shipments and prices include import levels, customer inventory levels, plant operating performance, domestic natural gas prices and usage, and U.S. and European economic performance and political developments. 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, as amended in Forms 10-K/A, and in subsequent Forms 10-Q and Forms 8-K, 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 third quarter earnings on Monday, October 22 at 10 a.m. EDST. To listen to the webcast of the conference call, visit the USX website, http://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 until October 29.

For more information on USX Corporation and U. S. Steel Group, visit our websites at http://www.usx.com/ or http://www.ussteel.com/. USX Corporation press releases are available through Company News On-Call at http://www.prnewswire.com/gh/cnoc/comp/929150.html.

                   U. S. STEEL GROUP OF USX CORPORATION
                   STATEMENT OF OPERATIONS (Unaudited)
                   ------------------------------------

                                     Third Quarter        Nine Months
  (Dollars in millions,                  Ended               Ended
   except per share amounts)         September 30         September 30
                                     2001     2000       2001     2000
  REVENUES AND OTHER INCOME:
   Revenues                        $1,645    $1,462     $4,888   $4,673
   Income from investees               11         6         51       13
   Net gains on disposal of assets      4         6         20       34
   Other income (loss)                  -         1          2       (1)
                                   ------    ------     ------   ------
      Total revenues and
       other income                 1,660     1,475      4,961    4,719
                                   ------    ------     ------   ------
  COSTS AND EXPENSES:
   Cost of revenues (excludes
    items shown below)              1,519     1,344      4,658    4,234
   Selling, general and
   administrative expenses (credits)    7       (56)        19     (176)
   Depreciation, depletion
    and amortization                   94        69        246      222
   Taxes other than income taxes       65        58        191      176
                                   ------    ------     ------   ------
      Total costs and expenses      1,685     1,415      5,114    4,456
                                   ------    ------     ------   ------
  INCOME (LOSS) FROM OPERATIONS       (25)       60       (153)     263
  Net interest and other
   financial costs                     38        27         74       75
                                   ------    ------     ------   ------
  INCOME (LOSS) BEFORE
   INCOME TAXES                       (63)       33       (227)     188
  Provision (credit) for
   income taxes                       (40)       14       (183)      70
                                   ------    ------     ------   ------
  NET INCOME (LOSS)                   (23)       19        (44)     118
  Dividends on preferred stock          2         2          6        6
                                   ------    ------     ------   ------
  NET INCOME (LOSS) APPLICABLE
   TO STEEL STOCK                    $(25)      $17       $(50)    $112
                                   ======    ======     ======   ======

  STEEL STOCK DATA:
   Net income (loss)                 $(25)      $17       $(50)    $112
    - Per share - basic              (.28)      .19       (.56)    1.27
                - diluted            (.28)      .19       (.57)    1.27

   Dividends paid per share           .10       .25        .45      .75

   Weighted average shares,
    in thousands
    - Basic                        89,193    88,738     89,003   88,554
    - Diluted                      89,193    88,738     89,003   88,556


  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), which is now operated as East
      Chicago Tin.  In this noncash transaction, USX assumed approximately
      $66 million of certain employee related obligations from LTV.  The
      acquisition was accounted for using the purchase method of
      accounting.  Results of operations for the nine months of 2001
      include the operations of East Chicago Tin 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 nine months of 2001, a pretax gain of $68 million (included in
      income 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 was 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.  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 charge of
      $74 million for potentially uncollectible receivables from Republic.

  4.  Interest and other financial costs in the nine months of 2001
      includes a favorable adjustment of $67 million and provision for
      income taxes includes an unfavorable adjustment of $15 million
      related to prior years' taxes.

  5.  On August 14, 2001, USX announced its intention to permanently close
      the cold rolling and tin mill operations at U. S. Steel's Fairless
      Works.  In the third quarter of 2001, the U. S. Steel Group recorded
      a pretax charge of $29 million relative to the shutdown.

  6.  On July 31, 2001, USX announced that its board of directors approved
      the definitive plan of reorganization to separate the energy and
      steel businesses of USX (Proposed Separation).  The Proposed
      Separation envisions a tax-free spin-off of the steel business of USX
      into a freestanding, publicly traded company to be known as United
      States Steel Corporation.  Holders of current USX-U. S. Steel Group
      Common Stock will become holders of United States Steel Corporation
      Common Stock.  Holders of current USX-Marathon Group Common Stock
      will continue to hold their shares in USX which will be renamed
      Marathon Oil Corporation.  The Proposed Separation does not
      contemplate a cash distribution to stockholders.  The Proposed
      Separation is subject to the approval of the holders of a majority of
      the outstanding shares of each class of current USX common stock,
      receipt of a favorable private letter ruling from the Internal
      Revenue Service (IRS) on the tax-free nature of the transaction,
      completion of necessary financing arrangements and receipt of
      necessary regulatory and third party consents.  The transaction is
      expected to occur on or about December 31, 2001.

  7.  On July 2, 2001, a corporate reorganization was implemented to create
      a new holding company structure.  USX became a holding company that
      owns all of the outstanding equity of Marathon Oil Company, an Ohio
      Corporation which, directly and indirectly, owns and operates the
      businesses of the USX-Marathon Group, and United States Steel LLC, a
      Delaware limited liability company which, directly and indirectly,
      owns and operates the businesses of the USX-U. S. Steel Group.  The
      reorganization will not have any impact on the results of operations
      or financial position of USX Corporation, the Marathon Group or the
      U. S. Steel Group.

      This reorganization in corporate form was independent of the Proposed
      Separation of the energy and steel businesses of USX Corporation.


                   U. S. STEEL GROUP OF USX CORPORATION
             PRELIMINARY SUPPLEMENTAL STATISTICS (Unaudited)

                                      Third Quarter       Nine Months
                                          Ended              Ended
                                      September 30       September 30
  (Dollars in millions)              2001      2000       2001    2000

  INCOME (LOSS) FROM OPERATIONS
  Domestic Steel(a)(b)               $(47)      $23      $(267)    $145
  U. S. Steel Kosice(c)                39         -        121        -
                                    -----     -----      -----    -----
  Income (loss) from
   Reportable Segments                $(8)      $23      $(146)    $145
   Items not allocated to segment:
    Net Pension Credits(d)             38        67        110      199
    Administrative Expenses            (5)       (7)       (20)     (18)
    Costs related to former
     business activities(e)           (21)      (23)       (59)     (63)
    Costs related to proposed
     separation(f)                      -         -         (9)       -
    Costs related to Fairless
     facility shutdown(g)             (29)        -        (29)       -
                                    -----     -----      -----    -----
      Total U. S. Steel Group        $(25)      $60      $(153)    $263

  CAPITAL EXPENDITURES
   Domestic Steel                     $39       $36       $166     $133
   U. S. Steel Kosice                  17         -         31        -
                                    -----     -----      -----    -----
      Total U. S. Steel Group         $56       $36       $197     $133

  OPERATING STATISTICS
   Average steel price: ($/net ton)
      Domestic Steel                 $420      $454       $429     $448
      U. S. Steel Kosice              256         -        263        -
   Steel Shipments:(h)
      Domestic Steel                2,554     2,557      7,597    8,441
      U. S. Steel Kosice            1,008         -      2,826        -
                                    -----     -----      -----    -----
        Total Steel Shipments       3,562     2,557     10,423    8,441
   Raw Steel-Production:(h)
      Domestic Steel                2,689     2,752      7,933    8,938
      U. S. Steel Kosice            1,131         -      3,214        -
                                    -----     -----      -----    -----
        Total Raw Steel-Production  3,820     2,752     11,147    8,938
  Raw Steel-Capability
   Utilization:(i)
    Domestic Steel                   83.3%     85.5%      82.9%    93.3%
    U. S. Steel Kosice               89.7%       -        85.9%       -
  Iron ore shipments
   - Domestic Steel(h)              4,494     4,770     11,594   11,455

  -----------
  (a)   Results in the third quarter and first nine months of 2001 include
        a favorable $21 million from insurance recoveries for fire damages
        to the cold rolling mill at USS-POSCO.  Results in the first nine
        months of 2001 also include a favorable $68 million for USX's share
        of gain on the Transtar reorganization and a $74 million charge for
        a substantial portion of accounts receivable from Republic.
        Results in the third quarter and first nine months of 2000 included
        $10 million for USX's share of Republic's special charges.  Results
        in the first nine months of 2000 also include charges totaling
        $15 million for certain environmental and legal accruals.
  (b)   Includes the sale, domestic production and transportation of steel
        products, coke, taconite pellets and coal; the management of
        mineral resources; real estate development; engineering and
        consulting services; and equity income from joint ventures and
        partially owned companies.
  (c)   Includes the production and sale of steel products and coke from
        facilities primarily located in the Slovak Republic.
  (d)   Excludes termination costs of $11 million related to Fairless
        facility shutdown.
  (e)   Includes other postretirement benefit costs and certain other
        expenses principally attributable to former business units of the
        U. S. Steel Group.
  (f)   Includes professional fees and expenses and certain other costs
        related to the proposed separation.
  (g)   Includes costs related to the shutdown of the cold rolling and tin
        mill facilities at Fairless Works.
  (h)   Thousands of net tons.
  (i)   Based on annual raw steel production capability of 12.8 million
        tons for Domestic Steel and 5.0 million tons for U. S. Steel
        Kosice.


                 USX CORPORATION AND SUBSIDIARY COMPANIES
             CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

                                    Third Quarter         Nine Months
                                        Ended                Ended
                                     September 30        September 30
  (Dollars in millions)              2001    2000       2001      2000

  REVENUES AND OTHER INCOME:
  Revenues                        $10,139   $10,607    $31,099  $30,207
   Dividend and investee income        45        46        157       81
   Net gains (losses) on
    disposal of assets               (203)        8       (165)     138
   Other income                         7        18         85       32
                                   ------    ------     ------   ------
    Total revenues and
     other income                   9,988    10,679     31,176   30,458
                                   ------    ------     ------   ------
  COSTS AND EXPENSES:
   Cost of revenues (excludes
    items shown below)              7,557     8,184     23,108   23,107
   Selling, general and
    administrative expenses           178        95        516      233
   Depreciation, depletion
    and amortization                  396       310      1,157      949
   Taxes other than income taxes    1,282     1,250      3,732    3,650
   Exploration expenses                20        51         69      142
                                   ------    ------     ------   ------
     Total costs and expenses       9,433     9,890     28,582   28,081
                                   ------    ------     ------   ------
  INCOME FROM OPERATIONS              555       789      2,594    2,377
  Net interest and other
   financial costs                     74        80        183      267
  Minority interest in income
   of Marathon Ashland
   Petroleum LLC                      223       115        650      373
                                   ------    ------     ------   ------
  INCOME BEFORE INCOME TAXES
   AND CUMULATIVE EFFECT OF
   CHANGE IN ACCOUNTING PRINCIPLE     258       594      1,761    1,737
  Provision for income taxes           88       454        522      877
                                   ------    ------     ------   ------
  INCOME BEFORE CUMULATIVE
   EFFECT OF CHANGE IN
   ACCOUNTING PRINCIPLE               170       140      1,239      860
  Cumulative effect of change
   in accounting principle              -         -         (8)       -
                                   ------    ------     ------   ------
  NET INCOME                          170       140      1,231      860
  Dividends on preferred stock          2         2          6        6
                                   ------    ------     ------   ------
  NET INCOME APPLICABLE TO
   COMMON STOCKS                     $168      $138     $1,225     $854
                                   ======    ======     ======   ======


                 USX CORPORATION AND SUBSIDIARY COMPANIES
       CONSOLIDATED STATEMENT OF OPERATIONS (Continued) (Unaudited)
                         INCOME PER COMMON SHARE

                                      Third Quarter        Nine Months
                                          Ended               Ended
  (Dollars in millions,                September 30       September 30
    except per share amounts)         2001    2000       2001      2000

  APPLICABLE TO MARATHON STOCK:

   Income before cumulative
    effect of change in
    accounting principle              $193    $121      $1,283     $742
    - Per share - basic                .63     .38        4.16     2.38
                - diluted              .62     .38        4.15     2.37

   Cumulative effect of change
    in accounting principle              -       -          (8)       -
    - Per share - basic                  -       -        (.03)       -
                - diluted                -       -        (.03)       -

   Net income                         $193    $121      $1,275     $742
    - Per share - basic                .63     .38        4.13     2.38
                - diluted              .62     .38        4.12     2.37

   Dividends paid per share            .23     .23         .69      .65

   Weighted average shares,
    in thousands
    - Basic                        309,309 311,847     309,056  312,068
    - Diluted                      309,923 312,094     309,452  312,272

  APPLICABLE TO STEEL STOCK:

   Net income (loss)                  $(25)    $17        $(50)    $112
    - Per share - basic               (.28)    .19        (.56)    1.27
                - diluted             (.28)    .19        (.57)    1.27

   Dividends paid per share            .10     .25         .45      .75

   Weighted average shares,
    in thousands
    - Basic                         89,193  88,738      89,003   88,554
    - Diluted                       89,193  88,738      89,003   88,556


  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 a tax benefit of $5 million, was $8 million.  The
       unfavorable cumulative effect on other comprehensive income (OCI),
       net of a tax benefit of $4 million, was $8 million.  The amounts
       reported as OCI 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 completed on February 7, 2001 at $19 a share.  On March 26,
       2001, Pennaco was merged with a wholly owned subsidiary of Marathon.
       Under the terms of the merger, each share not held by Marathon was
       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.  Results of operations
       for the nine months of 2001 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), which is now operated as
       East Chicago Tin.  In this noncash transaction, USX assumed
       approximately $66 million of certain employee related obligations
       from LTV.  The acquisition was accounted for using the purchase
       method of accounting.  Results of operations for the nine months of
       2001 include the operations of East Chicago Tin 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 nine months of 2001, a pretax gain of $68 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 was 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.  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 charge of $74 million
       for potentially uncollectible receivables from Republic.

  4.   In the third quarter of 2001, the Marathon Group recorded a
       $221 million pretax loss related to the sale of Marathon's heavy oil
       assets in Canada, which is included in net gains (losses) on
       disposal of assets.

  5.   On August 14, 2001, USX announced its intention to permanently close
       the cold rolling and tin mill operations at U. S. Steel's Fairless
       Works.  In the third quarter of 2001, USX recorded a pretax charge
       of $29 million relative to the shutdown.

  6.   On July 31, 2001, USX announced that its board of directors approved
       the definitive plan of reorganization to separate the energy and
       steel businesses of USX (Proposed Separation).  The Proposed
       Separation envisions a tax-free spin-off of the steel business of
       USX into a freestanding, publicly traded company to be known as
       United States Steel Corporation.  Holders of current USX-U. S. Steel
       Group Common Stock will become holders of United States Steel
       Corporation Common Stock.  Holders of current USX-Marathon Group
       Common Stock will continue to hold their shares in USX which will be
       renamed Marathon Oil Corporation.  The Proposed Separation does not
       contemplate a cash distribution to stockholders.  The Proposed
       Separation is subject to the approval of the holders of a majority
       of the outstanding shares of each class of current USX common stock,
       receipt of a favorable private letter ruling from the Internal
       Revenue Service (IRS) on the tax-free nature of the transaction,
       completion of necessary financing arrangements and receipt of
       necessary regulatory and third party consents.  The transaction is
       expected to occur on or about December 31, 2001.

  7.   On July 2, 2001, a corporate reorganization was implemented to
       create a new holding company structure.  USX became a holding
       company that owns all of the outstanding equity of Marathon Oil
       Company, an Ohio Corporation which, directly and indirectly, owns
       and operates the businesses of the USX-Marathon Group, and United
       States Steel LLC, a Delaware limited liability company which,
       directly and indirectly, owns and operates the businesses of the
       USX-U. S. Steel Group.  The reorganization will not have any impact
       on the results of operations or financial position of USX
       Corporation, the Marathon Group or the U. S. Steel Group.

       This reorganization in corporate form was independent of the
       Proposed Separation of the energy and steel businesses of USX
       Corporation.

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SOURCE: USX-U. S. Steel Group

Contact: W. E. Keslar or Don H. Herring, +1-412-433-6870, both of U. S.
Steel Group

Website: http://www.usx.com/

Website: http://www.ussteel.com/

Company News On-Call: http://www.prnewswire.com/gh/cnoc/comp/929150.html