Filed by USX Corporation
Pursuant to Rule 425 under the Securities Act of 1933
And deemed filed pursuant to Rule 14a-12
Of the Securities Exchange Act of 1934
Subject Company: USX Corporation
Commission File No. 1-5153
USX CORPORATION FILES PRELIMINARY PROXY WITH SEC RELATING TO SEPARATION OF
ENERGY AND STEEL BUSINESSES
PITTSBURGH, June 15, 2001: USX Corporation today announced that it has
filed with the Securities and Exchange Commission a preliminary proxy relating
to the previously announced plan of reorganization of the corporation in order
to separate the energy and steel businesses: USX-Marathon Group (NYSE: MRO) and
USX-U. S. Steel Group (NYSE: X). The preliminary proxy statement is subject to
completion and modification before the final proxy statement is distributed to
stockholders. The plan of reorganization is subject to the approval of the
holders of a majority of the outstanding shares of each class of the current USX
common stock at a special meeting of stockholders. The reorganization is
subject to several other conditions, including receipt of a favorable tax 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, and board approval of definitive
documentation for the transaction. The transaction 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.
The preliminary proxy contains the following update to the Outlook for
the U. S. Steel Group that was included in USX's Quarterly Report on Form 10-Q
for the quarter ended March 31, 2001.
Although the domestic order book is stronger than in the second quarter of
2000, Domestic Steel continues to experience mills that are running at
less-than-efficient utilization rates, depressed prices for most products
and high natural gas prices. For Domestic Steel, United States Steel
expects second quarter shipments to be approximately 2.6 million net tons
and second quarter average realized prices to be somewhat lower than the
first quarter, largely due to a less favorable product mix. In early June,
work began on the refurbishment of the Mon Valley No. 3 blast furnace,
which is expected to be available to resume production in August, business
conditions permitting.
On May 31, 2001 a major fire damaged the cold rolling mill at USS-POSCO,
which is fifty percent owned by United States Steel. Damage was limited to
the cold roll milling area of the plant. USS-POSCO maintains insurance
coverage against such losses, including coverage for business interruption.
At this time, the financial impact and the duration of the outage have not
been determined. As a major supplier of hot-rolled bands to USS-POSCO,
United States Steel is experiencing some short term disruption in shipments
to USS-POSCO.
For USSK, second quarter shipments are expected to be more than 30 percent
higher than the first quarter and second quarter average realized prices
are expected to be more than 10 percent 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
14.0 to 14.5 million net tons with Domestic Steel shipments of
approximately 10.5 to 11 million net tons and USSK shipments of
approximately 3.5 million net tons.
The preliminary proxy statement also addresses the impact of
completion of the transaction on preferred securities issued by USX and certain
wholly owned entities. If the transaction occurs it will have the following
effects on outstanding preferred securities. These impacts will occur only if
the transaction occurs and investors should consider the conditions to the
consummation of the transaction that are discussed in this release and in the
preliminary proxy statement before buying or selling any of these securities.
6.5% Cumulative Convertible Preferred
USX is the issuer of 2,404,487 shares of the 6.50% Cumulative Convertible
Preferred Stock that is convertible into USX-U. S. Steel Group Common Stock at a
price of $46.125 per share. Upon consummation of the merger that will
implement the transaction, each issued and outstanding share of the 6.5%
Cumulative Convertible Preferred Stock will be converted into the right to
receive $50.00 in cash.
6.75% Convertible Quarterly Income Preferred Securities issued by USX Capital
Trust I
USX Capital Business Trust I, a subsidiary of USX, has outstanding 3,937,487
shares of 6.75% Convertible Quarterly Income Preferred SecuritiesT with a
liquidation amount of $50.00 per share and convertible into USX-U. S. Steel
Group Common Stock at a price of $46.25 per share. Upon consummation of the
merger that will implement the transaction, each issued and outstanding share of
the 6.75% Convertible Quarterly Income Preferred SecuritiesT will be redeemed
for $50.00 in cash.
8 3/4% Cumulative Monthly Income Preferred Shares, Series A issued by USX
Capital LLC
USX Capital Trust LLC, a wholly owned subsidiary of USX (the "Trust"), has
outstanding 10,000,000 shares of 8 3/4% Cumulative Monthly Income Preferred
Shares with a liquidation preference of $25 per share. Upon consummation of the
merger that will implement the transaction, each issued and outstanding share
will remain outstanding and continue to be an obligation of the Trust, and USX,
which will be renamed Marathon Oil Corporation, will continue to be the obligor
of all obligations relating to these securities.
OOo
The foregoing contains "forward-looking statements" which are based on
(1) a number of assumptions concerning future events made by management and (2)
information currently available to management. Readers are cautioned not to put
undue reliance on such forward-looking statements, which are not a guarantee of
performance and are subject to a number of uncertainties and other facts, many
of which are outside USX Corporation's control, that could cause actual events
to differ materially from such statements. For a more detailed description of
the factors that could cause such a difference, please see USX Corporation's
filings with the Securities and Exchange Commission. There are also a number of
uncertainties, risks, conditions and other factors which could prevent the
implementation of the above described plan of reorganization.
Concerning the updated outlook for United States Steel a number of
factors could cause actual results to be different. 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.
In connection with the above described transactions, USX Corporation
has filed a preliminary proxy statement and intends to file a definitive proxy
statement and other materials with the Securities and Exchange Commission.
Security holders are urged to read these materials when they become available
because they will contain important information. Investors and security holders
may obtain a free copy of these materials when they become available as well as
other materials filed with the Securities and Exchange Commission concerning USX
Corporation at the Securities and Exchange Commission's website at
http://www.sec.gov. In addition, these materials and other documents may be
obtained for free from USX Corporation by directing a request to USX Corporation
at 600 Grant Street, Pittsburgh, PA 15219; Attn: Investor Relations.
USX Corporation and its officers and directors may be deemed to be
participants in the solicitation of proxies from USX Corporation's stockholders
with respect to these transactions. Information regarding such officers and
directors is included in USX Corporation's proxy statement for its 2001 annual
meeting of stockholders filed with the Securities and Exchange Commission on
March 12, 2001. This document is available free of charge at the SEC's internet
site or from USX Corporation as described above.