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The United States Securities and Exchange Commission (the "SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved probable and possible reserves. From time to time, we may use certain terms on this website or the documents contained herein, such as net unrisked mean resource potential, net unrisked resource potential, net resource, 2P resource, 2P net resource, net 2P resource, gross unrisked potential resource, gross resources, gross discovered resources, gross resource potential, gross block resource potential, resources, resource potential, potential resource, and other similar terms or variations of the foregoing terms. The SEC guidelines strictly prohibit us from including these terms in filings with the SEC. U.S. Investors are urged to consider closely the disclosures in our Forms 10-K, 10-Qs and 8-Ks, Commission File No. 1-5153, available from us at Marathon Oil Corporation, Attn. Investor Relations, 5555 San Felipe Street, Houston, TX 77056-2723. Our Form 10-K and other filings with the SEC can also be electronically accessed from our website or the SEC's website at http://www.sec.gov/.




<PAGE> 1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 10-Q
                                        

(Mark One)

      [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
                                        
                For the Quarterly Period Ended September 30, 2001
                                        
                                       or
                                        
      [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

           For the transition period from ------------ to ------------
                                        
                                        
                                 USX CORPORATION
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware             1-5153            25-0996816
       ---------------       ------------    -------------------
       (State or other       (Commission        (IRS Employer
       jurisdiction of       File Number)    Identification No.)
        incorporation)

600 Grant Street, Pittsburgh, PA                  15219-4776
---------------------------------------           ----------
(Address of principal executive offices)          (Zip Code)

                                 (412) 433-1121
                         ------------------------------
                         (Registrant's telephone number,
                              including area code)


-------------------------------------------------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes..X..No.....

Common stock outstanding at October 31, 2001 follows:

               USX-Marathon Group       -  309,393,089 shares
               USX-U. S. Steel Group    -   89,196,007 shares




<PAGE> 2

                                 USX CORPORATION
                                  SEC FORM 10-Q
                        QUARTER ENDED September 30, 2001
                        --------------------------------

                                     INDEX                        Page
                                     -----                        ----

PART I - FINANCIAL INFORMATION

     A.   Consolidated Corporation


       Item 1. Financial Statements:

               Consolidated Statement of Operations                  4

               Consolidated Balance Sheet                            6

               Consolidated Statement of Cash Flows                  8

               Selected Notes to Consolidated
                Financial Statements                                 9

               Ratio of Earnings to Combined Fixed Charges
                and Preferred Stock Dividends and Ratio of
                Earnings to Fixed Charges                           28


       Item 2. Management's Discussion and Analysis of
                Financial Condition and Results of
                Operations                                          29


       Item 3. Quantitative and Qualitative Disclosures about
               Market Risk                                          41

               Financial Statistics                                 44

     B.   Marathon Group


       Item 1. Financial Statements:

               Marathon Group Statement of Operations               45

               Marathon Group Balance Sheet                         46

               Marathon Group Statement of Cash Flows               47

               Selected Notes to Financial Statements               48


       Item 2. Marathon Group Management's Discussion and
                Analysis of Financial Condition and
                Results of Operations                               61


       Item 3. Quantitative and Qualitative Disclosures about
                Market Risk                                         74

               Supplemental Statistics                              77

<PAGE> 3

                                 USX CORPORATION
                                  SEC FORM 10-Q
                        QUARTER ENDED September 30, 2001
                        --------------------------------

                                     INDEX                        Page
                                     -----                        ----

PART I - FINANCIAL INFORMATION (Continued)

     C.   U. S. Steel Group


       Item 1. Financial Statements:

               U. S. Steel Group Statement of Operations            79

               U. S. Steel Group Balance Sheet                      80

               U. S. Steel Group Statement of Cash Flows            81

               Selected Notes to Financial Statements               82


       Item 2. U. S. Steel Group Management's Discussion
                and Analysis of Financial Condition
                and Results of Operations                           93


       Item 3. Quantitative and Qualitative Disclosures about
                Market Risk                                        106

               Supplemental Statistics                             109


PART II - OTHER INFORMATION



       Item 1. Legal Proceedings                                   110

       Item 4. Submission of Matters to a Vote of Security Holders 113

       Item 5. Other Information                                   114

       Item 6. Exhibits and Reports on Form 8-K                    115



<PAGE> 4


Part I - Financial Information

     A.   Consolidated Corporation

                    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 (Note 11)                     $10,139 $10,607 $31,099 $30,207
 Dividend and investee income                45      46     157      81
 Net gains (losses) on disposal of assets  (204)      7    (160)    129
 Gain (loss) on ownership change in
  Marathon Ashland Petroleum LLC              1       1      (5)      9
 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
                                         ======  ======  ======  ======



Selected notes to financial statements appear on pages 9-27.

<PAGE> 5
                                        
                    USX CORPORATION AND SUBSIDIARY COMPANIES
          CONSOLIDATED STATEMENT OF OPERATIONS (Continued) (Unaudited)
                             INCOME PER COMMON SHARE
          ------------------------------------------------------------


                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions, 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                                309,309311,847309,056312,068
  - Diluted                              309,923312,094309,452312,272

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











Selected notes to financial statements appear on pages 9-27.

<PAGE> 6

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     CONSOLIDATED BALANCE SHEET (Unaudited)
                    ----------------------------------------
                                        
                                     ASSETS
                                                 September 30December 31
(Dollars in millions)                                2001      2000
--------------------------------------------------------------------------
ASSETS

Current assets:
 Cash and cash equivalents                           $987      $559
 Receivables, less allowance for doubtful
  accounts of $134 and $60                          2,788     2,888
 Receivables subject to a security interest           350       350
 Inventories                                        2,907     2,813
 Deferred income tax benefits                         220       261
 Assets held for sale                                  51       330
 Other current assets                                 116       131
                                                   ------    ------
     Total current assets                           7,419     7,332

Investments and long-term receivables,
 less reserves of $39 and $38                       1,416       801
Property, plant and equipment, less accumulated
 depreciation, depletion and amortization of
 $16,975 and $16,222                               12,471    12,114
Prepaid pensions                                    2,963     2,879
Other noncurrent assets                               408       275
                                                   ------    ------
     Total assets                                 $24,677   $23,401
                                                   ======    ======























Selected notes to financial statements appear on pages 9-27.

<PAGE> 7

                    USX CORPORATION AND SUBSIDIARY COMPANIES
               CONSOLIDATED BALANCE SHEET (Continued) (Unaudited)
               --------------------------------------------------
                                        
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                 September 30December 31
(Dollars in millions)                                2001      2000
--------------------------------------------------------------------------
LIABILITIES

Current liabilities:
 Notes payable                                         $-      $150
 Accounts payable                                   3,473     3,774
 Payroll and benefits payable                         428       432
 Accrued taxes                                        617       281
 Accrued interest                                      74       108
 Long-term debt due within one year                   227       287
                                                   ------    ------
     Total current liabilities                      4,819     5,032

Long-term debt, less unamortized discount           4,140     4,173
Deferred income taxes                               2,110     2,020
Employee benefits                                   2,617     2,415
Deferred credits and other liabilities                724       724
Preferred stock of subsidiary                         250       250
USX obligated mandatorily redeemable convertible preferred
 securities of a subsidiary trust holding solely junior
 subordinated convertible debentures of USX           183       183

Minority interest in Marathon Ashland
 Petroleum LLC                                      2,029     1,840

STOCKHOLDERS' EQUITY

Preferred stock -
 6.50% Cumulative Convertible issued - 2,404,487 shares
   and 2,413,487 shares ($120 and $121 liquidation
   preference, respectively)                            2         2
Common stocks:
 Marathon Stock issued - 312,165,978 shares and
  312,165,978 shares                                  312       312
 Steel Stock issued - 89,196,332 shares and
  88,767,395 shares                                    89        89
 Securities exchangeable solely into Marathon Stock
  issued - 0 shares and 281,148 shares                  -         -
Treasury common stock, at cost -
 Marathon Stock - 2,880,559 shares 
 and 3,899,714 shares                                 (77)     (104)
Additional paid-in capital                          4,677     4,676
Deferred compensation                                 (24)       (8)
Retained earnings                                   2,819     1,847
Accumulated other comprehensive income (loss)           7       (50)
                                                   ------    ------
     Total stockholders' equity                     7,805     6,764
                                                   ------    ------
     Total liabilities and stockholders' equity   $24,677   $23,401
                                                   ======    ======

Selected notes to financial statements appear on pages 9-27.

<PAGE> 8
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
                ------------------------------------------------
                                                   Nine Months Ended
                                                      September 30
(Dollars in millions)                                2001      2000
------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

OPERATING ACTIVITIES:
Net income                                         $1,231      $860
Adjustments to reconcile to net cash provided
 from operating activities:
 Cumulative effect of change in 
  accounting principle                                  8         -
 Minority interest in income of Marathon Ashland
  Petroleum LLC                                       650       373
 Depreciation, depletion and amortization           1,157       949
 Exploratory dry well costs                            12        52
 Pensions and other postretirement benefits           (38)     (217)
 Deferred income taxes                               (136)      522
 (Gain) loss on ownership change in Marathon Ashland
  Petroleum LLC                                         5        (9)
 Net (gains) losses on disposal of assets             160      (129)
 Changes in:
     Current receivables                              142      (364)
     Inventories                                      (78)     (259)
     Current accounts payable and accrued expenses   (264)       10
 All other - net                                       43       (32)
                                                   ------    ------
     Net cash provided from operating activities    2,892     1,756
                                                   ------    ------
INVESTING ACTIVITIES:
Capital expenditures                               (1,217)   (1,011)
Acquisition of Pennaco Energy, Inc.                  (506)        -
Disposal of assets                                    198       269
Restricted cash - withdrawals                          71       219
                - deposits                            (54)     (207)
Investees - investments                                (9)      (80)
          - loans and advances                         (5)      (13)
          - returns and repayments                     10         9
All other - net                                        14        20
                                                   ------    ------
     Net cash used in investing activities         (1,498)     (794)
                                                   ------    ------
FINANCING ACTIVITIES:
Commercial paper and revolving credit
 arrangements - net                                  (526)     (329)
Other debt - borrowings                               661       273
           - repayments                              (397)     (328)
Common stock repurchased                               (1)      (37)
Treasury stock reissued                                11         -
Preferred stock repurchased                             -       (12)
Dividends paid                                       (260)     (275)
Distributions to minority shareholder of
 Marathon Ashland Petroleum LLC                      (450)     (212)
                                                   ------    ------
     Net cash used in financing activities           (962)     (920)
                                                   ------    ------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                (4)       (4)
                                                   ------    ------
NET INCREASE IN CASH AND CASH EQUIVALENTS             428        38
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR        559       133
                                                   ------    ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $987      $171
                                                   ======    ======
Cash used in operating activities included:
 Interest and other financial costs paid (net of
  amount capitalized)                               $(305)    $(301)
 Income taxes paid                                   (266)     (381)
     Selected notes to financial statements appear on pages 9-27.

<PAGE> 9

                    USX CORPORATION AND SUBSIDIARY COMPANIES
               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)


    1.   The information furnished in these financial statements is unaudited
    but, in the opinion of management, reflects all adjustments necessary for a
    fair presentation of the results for the periods covered.  All such
    adjustments are of a normal recurring nature unless disclosed otherwise.
    These financial statements, including selected notes, have been prepared in
    accordance with the applicable rules of the Securities and Exchange
    Commission and do not include all of the information and disclosures
    required by generally accepted accounting principles for complete financial
    statements.  Certain reclassifications of prior year data have been made to
    conform to 2001 classifications.  Additional information is contained in
    the USX Annual Report on Form 10-K for the year ended December 31, 2000, as
    amended.

    2.   USX uses commodity-based and foreign currency derivative instruments
    to manage its exposure to price risk.  Management has authorized the use of
    futures, forwards, swaps and options to reduce the effects of fluctuations
    related to the purchase, production or sale of crude oil, natural gas,
    refined products, and nonferrous metals and also certain business
    transactions denominated in foreign currencies.

         Effective January 1, 2001, USX adopted Statement of Financial
    Accounting Standards No. 133, "Accounting for Derivative Instruments and
    Hedging Activities" (SFAS No. 133), as amended by SFAS Nos. 137 and 138.
    This Standard, as amended, requires recognition of all derivatives at fair
    value as either assets or liabilities.  Changes in the fair value of all
    derivatives are recognized immediately in earnings, unless the derivative
    qualifies as a hedge of future cash flows or certain foreign currency
    exposures.  For derivatives qualifying as hedges of future cash flows or
    certain foreign currency exposures, the effective portion of any changes in
    fair value is recognized in a component of stockholders' equity called
    other comprehensive income ("OCI") and then reclassified to earnings when
    the underlying anticipated transaction is consummated.  Any ineffective
    portion of such hedges is recognized in earnings as it occurs.  For
    derivatives designated as hedges of the fair value of recognized assets,
    liabilities or firm commitments, changes in the fair value of the hedged
    item are recognized immediately in earnings.  Since changes in fair value
    of the related derivative are also recognized immediately in earnings, the
    net effect of that accounting is to reflect in earnings the extent to which
    the hedge is not effective in achieving offsetting changes in fair value.

         In order to apply hedge accounting under SFAS No. 133, USX is required
    to establish at the inception of the hedge the method it will use for
    assessing the effectiveness of the hedging derivative and the measurement
    approach for determining the ineffective portion of the hedge.  Generally,
    USX has not elected to designate derivative instruments as qualifying for
    hedge accounting treatment.  As a result, the changes in fair value of most
    derivatives are recognized immediately in earnings, while the changes in
    the fair value of the underlying items generally are not recognized until
    the transaction is consummated.

<PAGE> 10

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    2.   (Continued)

         A portion of the cumulative effect adjustment relating to the adoption
    of SFAS No. 133 was recognized in OCI which relates only to deferred gains
    or losses existing as of the close of business on December 31, 2000, for
    hedge transactions under prior accounting rules.  OCI is also impacted by
    the changes in fair value associated with cash flow hedges.  A
    reconciliation of the changes in OCI relating to derivative instruments is
    as follows (amounts in millions):

                                                    Third      Nine
                                                   Quarter    Months
                                                    Ended     Ended
                                                   Sept. 30  Sept. 30
   Deferred gain (loss), net of tax                  2001      2001
   ---------------------------------------------------------------------------
   Beginning balance                                  $42        $-
   Cumulative effect adjustment                         -        (8)
   Reclassification of the cumulative effect
    adjustment into earnings                           (7)       28
   Changes in fair value                               20        35
   Reclassification to earnings                         2         2
                                                     ----      ----
   Balance at September 30, 2001                      $57       $57
                                                     ====      ====

         Of the $57 million recorded in OCI as of September 30, 2001, $13
    million, net of income taxes, is expected to be reclassified to earnings
    over the 12-month period ending September 30, 2002.  The actual amounts
    that will be reclassified to earnings over the next twelve months will vary
    as a result of continual changes in fair value.

         The ineffective portion of changes in the fair value, on a before tax
    basis, for cash flow hedges recognized during the third quarter and nine
    months of 2001 was a favorable $6 million and $10 million, respectively.
    In addition, during the third quarter, $2 million was recognized in income
    before tax as the result of a discontinuation of a portion of a cash flow
    natural gas equity production hedge.  These amounts were included in
    revenues.

         The futures contracts used in cash flow hedge strategies vary in
    duration with certain contracts extending to December 2002.

         There was no ineffectiveness associated with fair value hedges for the
    third quarter or year-to-date because the hedging instrument and the
    existing firm commitment contract are priced on the same underlying index.
    Certain derivative instruments used in the fair value hedges extend into
    2008.
         USX did not have any foreign currency contracts that qualified for
    hedge accounting.  The changes in fair value of the forward currency
    contracts are recognized immediately in earnings.  These forward currency
    contracts have various maturities extending into 2001.

<PAGE> 11

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    3.   In June 2001, the Financial Accounting Standards Board (FASB) issued
    Statements of Financial Accounting Standards No. 141 "Business
    Combinations" (SFAS No. 141), No. 142 "Goodwill and Other Intangible
    Assets" (SFAS No. 142) and No. 143 "Accounting for Asset Retirement
    Obligations" (SFAS No. 143).

         SFAS No. 141 requires that all business combinations completed after
    June 30, 2001, be accounted for under the purchase method.  This standard
    also establishes for all business combinations made after June 30, 2001,
    specific criteria for the recognition of intangible assets separately from
    goodwill.  SFAS No. 141 also requires that the excess of fair value of
    acquired assets over cost in a business combination (negative goodwill) be
    recognized immediately as an extraordinary gain, rather than deferred and
    amortized.

         SFAS No. 142 addresses the accounting for goodwill and other
    intangible assets after an acquisition.  The most significant changes made
    by SFAS No. 142 are: 1) goodwill and intangible assets with indefinite
    lives will no longer be amortized; 2) goodwill and intangible assets with
    indefinite lives must be tested for impairment at least annually; and 3)
    the amortization period for intangible assets with finite lives will no
    longer be limited to forty years.  USX will adopt SFAS No. 142 effective
    January 1, 2002, as required.  At that time, amortization of existing
    goodwill will cease on the unamortized portion associated with previous
    acquisitions and certain investments accounted for under the equity method.
    This will have a favorable impact on the results of operations of
    approximately $5 million, net of tax, annually beginning in 2002.

         SFAS No. 143 establishes a new accounting model for the recognition
    and measurement of retirement obligations associated with tangible long-
    lived assets.  SFAS No. 143 requires that an asset retirement cost should
    be capitalized as part of the cost of the related long-lived asset and
    subsequently allocated to expense using a systematic and rational method.
    USX will adopt the Statement effective January 1, 2003.  The transition
    adjustment resulting from the adoption of SFAS No. 143 will be reported as
    a cumulative effect of a change in accounting principle.  At this time, USX
    cannot reasonably estimate the effect of the adoption of this Statement on
    either its financial position or results of operations.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for
    Impairment or Disposal of Long-Lived Assets" (SFAS No. 144). This Statement
    establishes a single accounting model for long-lived assets to be disposed
    of by sale and provides additional implementation guidance for assets to be
    held and used and assets to be disposed of other than by sale.  There will
    be no financial implication related to the adoption of SFAS No. 144, and
    the guidance will be applied on a prospective basis.  USX will adopt the
    Statement effective January 1, 2002.


<PAGE> 12

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    4.   The Marathon Group's operations consist of three reportable operating
    segments: 1) Exploration and Production (E&P) - explores for and produces
    crude oil and natural gas on a worldwide basis; 2) Refining, Marketing and
    Transportation (RM&T) - refines, markets and transports crude oil and
    petroleum products, primarily in the Midwest and southeastern United States
    through Marathon Ashland Petroleum LLC (MAP); and 3) Other Energy Related
    Businesses (OERB).  OERB is an aggregation of two segments which fall below
    the quantitative reporting thresholds: 1) Natural Gas and Crude Oil
    Marketing and Transportation - markets and transports its own and third-
    party natural gas and crude oil in the United States; and 2) Power
    Generation - develops, constructs and operates independent electric power
    projects worldwide.

         The U. S. Steel Group consists of two reportable operating segments:
    1) Domestic Steel and 2) U. S. Steel Kosice (USSK).  Domestic Steel
    includes the United States operations of U. S. Steel while USSK includes
    the U. S. Steel Kosice operations primarily located in the Slovak Republic.
    Domestic Steel is engaged in the domestic production, sale and
    transportation of steel mill products, coke, taconite pellets and coal; the
    management of mineral resources; real estate development; and engineering
    and consulting services.  USSK is engaged in the production and sale of
    steel mill products and coke and primarily serves central European markets.


<PAGE> 13

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    4.   (Continued)

         The results of segment operations for USX are as follows:

                                                                Total
                                                               Marathon
(In millions)                              E&P    RM&T    OERB Segments
---------------------------------------------------------------------------
THIRD QUARTER 2001
------------------
Revenues and other income:
 Customer                                 $873  $7,212   $413   $8,498
 Intersegment (a)                          123       2     14      139
 Intergroup (a)                              4       -      2        6
 Equity in earnings of unconsolidated 
  investees                                 16      14      -       30
 Other                                      (1)     20      3       22
                                         ------ ------ ------   ------
 Total revenues and other income        $1,015  $7,248   $432   $8,695
                                        ======  ====== ======   ======
Segment income                            $259    $575     $6     $840
                                        ======  ====== ======   ======

THIRD QUARTER 2000
------------------
Revenues and other income:
 Customer (b)                           $1,140  $7,518   $492   $9,150
 Intersegment (a)                           74       7     20      101
 Intergroup (a)                              9       -     10       19
 Equity in earnings of unconsolidated
  investees                                 28       5      4       37
 Other                                       5      13      3       21
                                        ------  ------ ------   ------
 Total revenues and other income        $1,256  $7,543   $529   $9,328
                                        ======  ====== ======   ======
Segment income (b)                        $464    $299    $13     $776
                                        ======  ====== ======   ======


(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.

(b)Certain amounts have been reclassified from E&P to OERB to reflect 2001
   classifications.

<PAGE> 14

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    4.   (Continued)

                                                  Total    Total
                                  Domestic      U.S.Steel Marathon
(In millions)                      Steel   USSK  Segments Segments Total
--------------------------------------------------------------------------
THIRD QUARTER 2001
------------------
Revenues and other income:
 Customer                          $1,359  $285  $1,644   $8,498  $10,142
 Intersegment (a)                       2     -       2      139      141
 Intergroup (a)                         2     -       2        6        8
 Equity in earnings of unconsolidated
  investees                            11     -      11       30       41
 Other                                  2     1       3       22       25
                                   ------ ----- -------   ------   ------
 Total revenues and other income   $1,376  $286  $1,662   $8,695  $10,357
                                   ====== =====  ======   ======   ======
Segment income (loss)                $(47)  $39     $(8)    $840     $832
                                   ====== =====  ======   ======   ======

THIRD QUARTER 2000
------------------
Revenues and other income:
 Customer                          $1,457    $-  $1,457   $9,150  $10,607
 Intersegment (a)                       -     -       -      101      101
 Intergroup (a)                         5     -       5       19       24
 Equity in earnings of unconsolidated
  investees                             6     -       6       37       43
 Other                                  7     -       7       21       28
                                   ------ -----  ------   ------   ------
 Total revenues and other income   $1,475    $-  $1,475   $9,328  $10,803
                                   ====== =====  ======   ======   ======
Segment income                        $23    $-     $23     $776     $799
                                   ====== =====  ======   ======   ======


(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.

<PAGE> 15

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    4.   (Continued)

                                                                Total
                                                               Marathon
(In millions)                              E&P    RM&T    OERB Segments
------------------------------------------------------------------------------
NINE MONTHS 2001
----------------
Revenues and other income:
 Customer                               $3,251 $21,490  $1,478  $26,219
 Intersegment (a)                          393      15      58      466
 Intergroup (a)                             19       -       7       26
 Equity in earnings of unconsolidated
  investees                                 52      28      11       91
 Other                                      16      52      10       78
                                        ------  ------  ------   ------
 Total revenues and other income        $3,731 $21,585  $1,564  $26,880
                                        ======  ======  ======   ======
Segment income                          $1,304  $1,693     $38   $3,035
                                        ======  ======  ======   ======

NINE MONTHS 2000
----------------
Revenues and other income:
 Customer (b)                           $3,046 $21,351  $1,150  $25,547
 Intersegment (a)                          262      62      52      376
 Intergroup (a)                             20       -      21       41
 Equity in earnings of unconsolidated
  investees                                 24      15      12       51
 Other                                      15      34       9       58
                                        ------  ------  ------   ------
 Total revenues and other income        $3,367 $21,462  $1,244  $26,073
                                        ======  ======  ======   ======
Segment income (b)                      $1,128    $968     $27   $2,123
                                        ======  ======  ======   ======


(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.

(b)Certain amounts have been reclassified from E&P to OERB to reflect 2001
   classifications.


<PAGE> 16

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    4.   (Continued)

                                                  Total    Total
                                  Domestic      U.S.Steel Marathon
(In millions)                      Steel   USSK  Segments Segments  Total
-----------------------------------------------------------------------------
NINE MONTHS 2001
----------------
Revenues and other income:
 Customer                          $4,068  $815   $4,883  $26,219  $31,102
 Intersegment (a)                       5     -        5      466      471
 Intergroup (a)                         6     -        6       26       32
 Equity in earnings of unconsolidated
  investees                            50     1       51       91      142
 Other                                 19     2       21       78       99
                                   ------ -----   ------   ------   ------
 Total revenues and other income   $4,148  $818   $4,966  $26,880  $31,846
                                   ====== =====   ======   ======   ======
Segment income (loss)               $(267) $121    $(146)  $3,035   $2,889
                                   ====== =====   ======   ======   ======

NINE MONTHS 2000
----------------
Revenues and other income:
 Customer                          $4,660    $-   $4,660  $25,547  $30,207
 Intersegment (a)                       -     -        -      376      376
 Intergroup (a)                        13     -       13       41       54
 Equity in earnings of unconsolidated
  investees                            13     -       13       51       64
 Other                                 33     -       33       58       91
                                   ------ -----   ------   ------   ------
 Total revenues and other income   $4,719    $-   $4,719  $26,073  $30,792
                                   ====== =====   ======   ======   ======
Segment income                       $145    $-     $145   $2,123   $2,268
                                   ====== =====   ======   ======   ======


(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.


<PAGE> 17

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)
                                        

    4.   (Continued)

    The following schedules reconcile segment amounts to amounts reported in
    the Marathon and U. S. Steel Groups' financial statements:

                                         Marathon Group U. S. Steel Group
                                         Third Quarter  Third Quarter
                                             Ended          Ended
                                          September 30   September 30
(In millions)                              2001   2000    2001   2000
-----------------------------------------------------------------------------
Revenues and other income:
 Revenues and other income of
  reportable segments                     $8,695 $9,328  $1,662 $1,475
 Items not allocated to segments:
   Loss related to sale of certain
    Canadian assets                         (221)     -       -      -
   Gain on ownership change in MAP             1      1       -      -
 Elimination of intersegment revenues       (139)  (101)     (2)     -
                                          ------ ------   -----  -----
   Total Group revenues and other income  $8,336 $9,228  $1,660 $1,475
                                          ====== ======  ====== ======

Income:
 Income (loss) for reportable segments      $840   $776     $(8)   $23
 Items not allocated to segments:
   Gain on ownership change in MAP             1      1       -      -
   Administrative expenses                   (39)   (48)     (5)    (7)
   Net pension credits                         -      -      38     67
   Costs related to former
    business activities                        -      -     (21)   (23)
   Loss related to sale of certain
    Canadian assets                         (221)     -       -      -
   Costs related to Fairless
    facility shutdowns                         -      -     (29)     -
   Costs related to Proposed Separation       (1)     -       -      -
                                          ------ ------  ------ ------
  Total Group income (loss) from operations $580   $729    $(25)   $60
                                          ====== ======  ====== ======


<PAGE> 18

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)
    4.   (Continued)
                                         Marathon Group U. S. Steel Group
                                          Nine Months    Nine Months
                                             Ended          Ended
                                          September 30   September 30
(In millions)                              2001   2000    2001   2000
----------------------------------------------------------------------------
Revenues and other income:
 Revenues and other income of 
  reportable segments                    $26,880 $26,073 $4,966 $4,719
 Items not allocated to segments:
   Loss related to sale of certain
    Canadian assets                         (221)      -      -      -
   Gain (loss) on ownership change in MAP     (5)      9      -      -
   Other (a)                                  59      87      -      -
 Elimination of intersegment revenues       (466)   (376)    (5)     -
                                          ------  ------  -----  -----
  Total Group revenues and other income  $26,247 $25,793 $4,961 $4,719
                                          ======  ====== ====== ======
Income:
 Income (loss) for reportable segments    $3,035  $2,123  $(146)  $145
 Items not allocated to segments:
  Gain (loss) on ownership change in MAP      (5)      9      -      -
  Administrative expenses                   (104)   (105)   (20)   (18)
  Net pension credits                          -       -    110    199
  Costs related to former 
   business activities                         -       -    (59)   (63)
  Loss related to sale of certain
   Canadian assets                          (221)      -      -      -
  Costs related to Fairless
   facility shutdowns                          -       -    (29)     -
  Costs related to Proposed Separation       (17)      -     (9)     -
  Other (a)                                   59      87      -      -
                                          ------  ------ ------ ------
  Total Group income (loss) from 
     operations                           $2,747  $2,114  $(153)  $263
                                          ======  ====== ====== ======

(a) Represents in 2001 for the Marathon Group, gain on offshore lease
    resolution with the U.S. Government and in 2000, gain on disposition of
    Angus/Stellaria.

    5.   On November 24, 2000, USX acquired U. S. Steel Kosice, s.r.o. (USSK),
    which is primarily located in the Slovak Republic.  USSK was formed in June
    2000 to hold the steel operations and related assets of VSZ a.s. (VSZ), a
    diversified Slovak corporation.  The acquisition was accounted for under
    the purchase method of accounting.

         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 cash purchase price of Pennaco was $506 million.  The
    acquisition was accounted for under the purchase method of accounting.  The
    excess of the purchase price over the preliminary fair value of net assets
    acquired (goodwill) was $64 million and was originally to be amortized over
    17 years.

<PAGE> 19

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    5.   (Continued)

         However, with the adoption of SFAS No. 142, effective January 1, 2002,
    USX will cease the amortization of goodwill and will test the unamortized
    balance for impairment on an annual basis.  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.

         The following unaudited pro forma data for USX includes the results of
    operations of the above acquisitions giving effect to them as if they had
    been consummated at the beginning of the periods presented.  The nine month
    2001 pro forma results exclude the $68 million gain and $33 million tax
    benefit recorded as a result of the Transtar transaction.  In addition, VSZ
    did not historically provide carve-out financial information for its steel
    activities prepared in accordance with generally accepted accounting
    principles in the United States. Therefore, USX made certain estimates and
    assumptions regarding revenues and costs used in the preparation of the
    unaudited pro forma data relating to USSK for the nine months of 2000.

         The following pro forma data is based on historical information and
    does not necessarily reflect the actual results that would have occurred
    nor is it necessarily indicative of future results of operations.

<PAGE> 20

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    5.   (Continued)


                                                   Nine Months Ended
                                                      September 30
     (In millions, except per share amounts)         2001      2000
     ---------------------------------------------------------------------------
-
     Revenues and other income                    $31,162   $31,414
     Income before cumulative effect of change in
      accounting principle                          1,134       892
     Net income                                     1,126       892

     Applicable to Marathon Stock:
     Income before cumulative effect of change in
      accounting principle                          1,281       716
      - Per share - basic                            4.15      2.29
                  - diluted                          4.14      2.29
     Net income                                     1,273       716
      - Per share - basic                            4.12      2.29
                  - diluted                          4.11      2.29

     Applicable to Steel Stock:
     Net income (loss)(a)                            (153)      170
      - Per share - basic and diluted               (1.72)     1.92

     (a) Amounts are net of dividends on preferred stock of $6 million.


    6.   In the third quarter of 2001, MAP and Pilot Corporation formed a joint
    venture combining their travel center operations.  The joint venture
    company named Pilot Travel Centers LLC, commenced operations on September
    1, 2001 and is accounted for under the equity method of accounting.

         In December 2000, Marathon and Kinder Morgan Energy Partners, L.P.
    signed a definitive agreement to form a joint venture combining certain of
    their oil and gas producing activities in the U.S. Permian Basin, including
    Marathon's interest in the Yates Field. The joint venture, named MKM
    Partners L.P., commenced operations in January 2001 and is accounted for
    under the equity method of accounting.

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

         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
    related to the shutdown of these operations, of which $12 million is
    included in depreciation, depletion and amortization and $17 million is
    included in cost of revenues.

<PAGE> 21

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    8.   Inventories are carried at lower of cost or market.  Cost of
    inventories is determined primarily under the last-in, first-out (LIFO)
    method.

                                                     (In millions)
                                                ------------------------
                                                 September 30December 31
                                                     2001      2000
                                                 -----------------------

    Raw materials                                    $886      $915
    Semi-finished products                            419       429
    Finished products                               1,406     1,279
    Supplies and sundry items                         196       190
                                                   ------    ------
      Total                                        $2,907    $2,813
                                                   ======    ======

         Cost of revenues was reduced by $13 million in the nine months of 2001
    as a result of liquidations of LIFO inventories.

    9.   Total comprehensive income was $185 million for the third quarter of
    2001, $138 million for the third quarter of 2000, $1,288 million for the
    nine months of 2001 and $854 million for the nine months of 2000.

    10.  The method of calculating net income (loss) per share for the Marathon
    Stock and Steel Stock reflects the USX Board of Directors' intent that the
    separately reported earnings and surplus of the Marathon Group and the
    U. S. Steel Group, as determined consistent with the USX Restated
    Certificate of Incorporation, are available for payment of dividends on the
    respective classes of stock, although legally available funds and
    liquidation preferences of these classes of stock do not necessarily
    correspond with these amounts.  The financial statements of the Marathon
    Group and the U. S. Steel Group, taken together, include all accounts which
    comprise the corresponding consolidated financial statements of USX.

         Basic net income (loss) per share is calculated by adjusting net
    income (loss) for dividend requirements of preferred stock and is based on
    the weighted average number of common shares outstanding.

         Diluted net income (loss) per share for both groups assumes exercise
    of stock options and for the U. S. Steel Group assumes exercise of common
    stock warrants in an equity investee, provided the effects are not
    antidilutive.

<PAGE> 22

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    10.  (Continued)

         COMPUTATION OF INCOME PER SHARE
                                              Third Quarter Ended
                                                  September 30
                                              2001           2000
                                          Basic Diluted  Basic Diluted
------------------------------------------------------------------------------
Marathon Group
--------------
Net income (millions)                      $193    $193    $121    $121
                                         ======  ======  ======  ======
Shares of common stock outstanding (thousands):
 Average number of common
  shares outstanding                    309,309 309,309 311,847 311,847
 Effect of dilutive securities 
  - stock options                             -     614       -     247
                                         ------  ------  ------  ------
 Average common shares and
     dilutive effect                    309,309 309,923 311,847 312,094
                                         ======  ======  ======  ======
Net income per share                       $.63    $.62    $.38    $.38
                                         ======  ======  ======  ======
U. S. Steel Group
-----------------
Net income (loss) (millions):
 Net income (loss)                         $(23)   $(23)    $19     $19
 Dividends on preferred stock                 2       2       2       2
                                         ------  ------  ------  ------
Net income (loss) applicable
   to Steel Stock                          $(25)   $(25)    $17     $17
                                         ======  ======  ======  ======
Shares of common stock outstanding (thousands) -
 Average number of common
  shares outstanding                     89,193  89,193  88,738  88,738
                                         ======  ======  ======  ======
Net income (loss) per share               $(.28)  $(.28)   $.19    $.19
                                         ======  ======  ======  ======

<PAGE> 23

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    10.  (Continued)

         COMPUTATION OF INCOME PER SHARE
                                               Nine Months Ended
                                                  September 30
                                              2001           2000
                                          Basic Diluted  Basic Diluted
--------------------------------------------------------------------------
Marathon Group
--------------
Net income (millions):
 Income before cumulative effect of change
  in accounting principle                $1,283  $1,283    $742    $742
 Cumulative effect of change in
  accounting principle                       (8)     (8)      -       -
                                         ------  ------  ------  ------
 Net income                              $1,275  $1,275    $742    $742
                                         ======  ======  ======  ======
Shares of common stock outstanding (thousands):
 Average number of common
  shares outstanding                    309,056 309,056 312,068 312,068
 Effect of dilutive securities
  - stock options                             -     396       -     204
                                         ------  ------  ------  ------
 Average common shares and dilutive
   effect                               309,056 309,452 312,068 312,272
                                         ======  ======  ======  ======
Per share:
 Income before cumulative effect of change
  in accounting principle                 $4.16   $4.15   $2.38   $2.37
 Cumulative effect of change in accounting
  principle                                (.03)   (.03)      -       -
                                         ------  ------  ------  ------
 Net income                               $4.13   $4.12   $2.38   $2.37
                                         ======  ======  ======  ======
U. S. Steel Group
-----------------
Net income (loss) (millions):
 Net income (loss)                         $(44)   $(44)   $118    $118
 Dividends on preferred stock                 6       6       6       6
                                         ------  ------  ------  ------
Net income (loss) applicable to 
   Steel Stock                             $(50)   $(50)   $112    $112
                                         ======  ======  ======  ======
Shares of common stock outstanding (thousands):
 Average number of common 
  shares outstanding                     89,003  89,003  88,554  88,554
 Effect of dilutive securities                -       -       -       2
                                         ------  ------  ------  ------
 Average common shares and 
   dilutive effect                       89,003  89,003  88,554  88,556
                                         ======  ======  ======  ======
Net income (loss) per share               $(.56)  $(.57)  $1.27   $1.27
                                         ======  ======  ======  ======

<PAGE> 24

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)
                                        
                                        
    11.  Included in revenues and costs and expenses for the third quarter of
    2001 and 2000 were $1,152 million and $1,121 million, respectively,
    representing excise taxes on petroleum products and merchandise.  Similar
    amounts for the nine months of 2001 and 2000 were $3,322 million and $3,268
    million, respectively.

    12.  The provision for income taxes for the periods reported is based on
    tax rates and amounts which recognize management's best estimate of current
    and deferred tax assets and liabilities.

         The provision for income taxes for the third quarter and nine months
    of 2001 included deferred tax charges related to certain prior years' taxes
    of $7 million and $27 million, respectively.

         The income tax provision for the third quarter and nine months of 2000
    included a one-time, noncash deferred tax charge of $235 million as a
    result of the change in amount, timing and nature of expected future
    foreign source income due to the exchange of the Marathon Group's interest
    in Sakhalin Energy Investment Company, Ltd. for other oil and gas producing
    interests.

         Interest and other financial costs in the nine months of 2001 included
    a favorable adjustment of $76 million related to certain prior years'
    taxes.

    13.  At September 30, 2001, USX had no borrowings against its
    $1,354 million long-term revolving credit facility and no borrowings
    against its $451 million short-term revolving credit facility.

         Certain banks provide USX with short-term lines of credit totaling
    $75 million which require a .125% fee or maintenance of compensating
    balances.  At September 30, 2001, there were no borrowings against these
    facilities.

         At September 30, 2001, MAP had no borrowings against its $450 million
    revolving credit agreements with banks and had no amounts outstanding
    against its $190 million revolving credit agreement with Ashland, which was
    amended and extended for one year to March 15, 2002.

         At September 30, 2001, USSK had no borrowings against its $50 million
    short-term credit facility.

         At September 30, 2001, in the event of a change in control of USX,
    debt obligations totaling $3,599 million and operating lease obligations of
    $101 million may be declared immediately due and payable.  In such event,
    USX may also be required to either repurchase the leased Fairfield slab
    caster for $100 million or provide a letter of credit to secure the
    remaining obligation.

    14.  On March 30, 2001, USX borrowed $30 million under a five-year
    promissory note agreement.  The amount borrowed is unsecured and requires
    quarterly principal payments and interest at a rate of 6.57%.  At September
    30, 2001, $27 million was outstanding under the agreement.

<PAGE> 25

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    15.  On August 13, 2001, Marathon Oil Canada Limited, an indirect
    subsidiary of Marathon Oil Company, redeemed its outstanding securities
    exchangeable solely into Marathon Stock through an exchange for shares of
    Marathon Stock on a one-for-one basis.

    16.  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.

    17.  In 1998, USX redeemed all shares of USX-Delhi Group Common Stock.
    After the redemption, 50,000,000 shares of this stock remain authorized but
    unissued.

    18.  USX is the subject of, or a party to, a number of pending or
    threatened legal actions, contingencies and commitments involving a variety
    of matters, including laws and regulations relating to the environment.
    Certain of these matters are discussed below.  The ultimate resolution of
    these contingencies could, individually or in the aggregate, be material to
    the consolidated financial statements.  However, management believes that
    USX will remain a viable and competitive enterprise even though it is
    possible that these contingencies could be resolved unfavorably.  See
    discussion of Liquidity in USX Consolidated Management's Discussion and
    Analysis of Financial Condition and Results of Operations.

         USX is subject to federal, state, local and foreign laws and
    regulations relating to the environment.  These laws generally provide for
    control of pollutants released into the environment and require responsible
    parties to undertake remediation of hazardous waste disposal sites.
    Penalties may be imposed for noncompliance.  At September 30, 2001, and
    December 31, 2000, accrued liabilities for remediation totaled $219 million
    and $212 million, respectively.  It is not presently possible to estimate
    the ultimate amount of all remediation costs that might be incurred or the
    penalties that may be imposed.  Receivables for recoverable costs from
    certain states, under programs to assist companies in cleanup efforts
    related to underground storage tanks at retail marketing outlets, were $59
    million at September 30, 2001, and $57 million at December 31, 2000.

         For a number of years, USX has made substantial capital expenditures
    to bring existing facilities into compliance with various laws relating to
    the environment.  In the nine months of 2001 and for the years 2000 and
    1999, such capital expenditures totaled $38 million, $91 million and $78
    million, respectively.  USX anticipates making additional such expenditures
    in the future; however, the exact amounts and timing of such expenditures
    are uncertain because of the continuing evolution of specific regulatory
    requirements.

<PAGE> 26

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)
                                        
                                        
    18.  (Continued)

         On May 11, 2001, MAP entered into a consent decree with the U.S.
    Environmental Protection Agency which commits it to complete certain agreed
    upon environmental capital projects over the next eight years primarily
    aimed at reducing air emissions at its seven refineries.  This consent
    decree was approved by the court on August 28, 2001.  The current estimated
    cost to complete these projects is approximately $270 million.  In
    addition, MAP is required to complete certain agreed upon supplemental
    environmental projects as part of an enforcement action for alleged Clean
    Air Act violations, at a current estimated cost of $8 million.

         At September 30, 2001, and December 31, 2000, accrued liabilities for
    platform abandonment and dismantlement totaled $184 million and $162
    million, respectively.

         Guarantees by USX of the liabilities of affiliated entities totaled
    $59 million at September 30, 2001.  In the event that any defaults of
    guaranteed liabilities occur, USX has access to its interest in the assets
    of most of the affiliates to reduce losses resulting from these guarantees.
    As of September 30, 2001, the largest guarantee for a single affiliate was
    $26 million.

         At September 30, 2001, USX's pro rata share of obligations of LOOP LLC
    and various pipeline affiliates secured by throughput and deficiency
    agreements totaled $112 million.  Under the agreements, USX is required to
    advance funds if the affiliates are unable to service debt.  Any such
    advances are prepayments of future transportation charges.

         Contract commitments to acquire property, plant and equipment at
    September 30, 2001, totaled $445 million compared with $663 million at
    December 31, 2000.

    19.  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 would become holders
    of United States Steel Corporation Common Stock.  Holders of current USX-
    Marathon Group Common Stock would remain holders of such stock which would
    be renamed Marathon Oil Corporation Common Stock.  The Proposed Separation
    does not contemplate a cash distribution to stockholders.  Each company
    would carry approximately the same assets and liabilities now associated
    with its existing business, except for a value transfer of approximately
    $900 million from Marathon Oil Corporation to United States Steel
    Corporation, intended to maintain United States Steel Corporation as a
    strong, independent company.  The form of the value transfer would be a
    reattribution of USX corporate debt between the USX-Marathon Group and the
    USX-U. S. Steel Group.  The Proposed Separation was approved by
    shareholders at an October 25, 2001 meeting and is subject to receipt of a
    favorable private letter ruling from the Internal Revenue Service ("IRS")

<PAGE> 27

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


    19.  (Continued)

         on the tax-free nature of the transaction, completion of necessary
    financing arrangements and receipt of necessary regulatory and third party
    consents.  The Proposed Separation is expected to occur on or about
    December 31, 2001, 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.  Costs related
    to the Proposed Separation include professional fees and certain other
    expenses and are included in selling, general and administrative expenses.
    These costs in the third quarter and nine months of 2001 were $1 million
    and $26 million, respectively.

    20.  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 did 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.

    21.  On July 27, 2001 and September 11, 2001, United States Steel LLC and
    United States Steel LLC's wholly owned subsidiary, United States Steel
    Financing Corp., issued in total, $535 million of Senior Notes due August
    1, 2008 (Notes), at an interest rate of 10.75 percent.  The Notes were
    issued to meet, in part, the conditions of the Proposed Separation related
    to the completion of necessary financing arrangements.  These notes are
    guaranteed by USX Corporation until completion of the Proposed Separation,
    at which time they will be solely the obligation of United States Steel
    Corporation.  The notes allow their redemption if the Proposed Separation
    does not occur.

         The indenture governing the Notes contains covenants that will impose
    restrictions on certain activities of United States Steel Corporation after
    the Proposed Separation.  The majority of these covenants will not apply if
    an investment grade rating is reached in the future.

<PAGE> 28

                                 USX CORPORATION
           COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                          AND PREFERRED STOCK DIVIDENDS
                      TOTAL ENTERPRISE BASIS - (Unaudited)
                              CONTINUING OPERATIONS
           ----------------------------------------------------------
                                        

Nine Months Ended
  September 30                  Year Ended December 31
----------------------------------------------------------------------------

 2001      2000      2000      1999      1998      1997      1996
 ----      ----      ----      ----      ----      ----      ----

 8.51      6.60      3.79      4.20      3.45      3.63      3.41
 ====      ====      ====      ====      ====      ====      ====





                                 USX CORPORATION
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                      TOTAL ENTERPRISE BASIS - (Unaudited)
                              CONTINUING OPERATIONS
                -------------------------------------------------


Nine Months Ended
  September 30                  Year Ended December 31
----------------------------------------------------------------------------

 2001      2000      2000      1999      1998      1997      1996
 ----      ----      ----      ----      ----      ----      ----

 8.77      6.77      3.89      4.32      3.56      3.79      3.65
 ====      ====      ====      ====      ====      ====      ====

<PAGE> 29
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     USX Corporation ("USX") is a diversified company that is principally
engaged in the energy business through its Marathon Group and in the steel
business through its U. S. Steel Group. The following discussion should be read
in conjunction with the third quarter 2001 USX Consolidated Financial Statements
and Selected Notes to Financial Statements.  For income per common share amounts
applicable to USX's two classes of common stock, USX-Marathon Group Common Stock
("Marathon Stock") and USX-U. S. Steel Group Common Stock ("Steel Stock"), see
Consolidated Statement of Operations - Income per Common Share.  For individual
Group results, see Management's Discussion and Analysis of Financial Condition
and Results of Operations for the Marathon Group and the U. S. Steel Group.  For
operating statistics, see Supplemental Statistics following Management's
Discussion and Analysis of Financial Condition and Results of Operations for
each of the respective Groups.

     On October 25, 2001, USX announced that the shareholders 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 Steel Stock
would become holders of United States Steel Corporation Common Stock.  Holders
of current Marathon Stock would remain holders of such stock which would be
renamed Marathon Oil Corporation Common Stock.  The Proposed Separation does not
contemplate a cash distribution to stockholders. Each company would carry
approximately the same assets and liabilities now associated with its existing
business, except for a value transfer of approximately $900 million from
Marathon Oil Corporation to United States Steel Corporation, intended to
maintain United States Steel Corporation as a strong, independent company.  The
form of the value transfer would be a reattribution of USX corporate debt
between the USX-Marathon Group and the USX-U. S. Steel Group.  The Proposed
Separation is subject to the 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 Proposed Separation is expected to
occur on or about December 31, 2001, 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.

     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, a 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 did 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.

<PAGE> 30

                    USX CORPORATION AND SUBSIDIARY COMPANIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Certain sections of Management's Discussion and Analysis include forward-
looking statements concerning trends or events potentially affecting USX. These
statements typically contain words such as "anticipates", "believes",
"estimates", "expects" or similar words indicating that future outcomes are
uncertain. In accordance with "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, these statements are accompanied by cautionary
language identifying important factors, though not necessarily all such factors,
which could cause future outcomes to differ materially from those set forth in
the forward-looking statements. For additional risk factors affecting the
businesses of USX, see Supplementary Data - Disclosures About Forward-Looking
Statements in the USX Annual Report on Form 10-K for the year ended December 31,
2000, as amended, and in subsequent Forms 10-Q and 8-K.

Results of Operations
---------------------

     Revenues and other income for the third quarter and the first nine months
of 2001 and 2000 are set forth in the following table:

                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions)                      2001  2000     2001   2000
------------------------------------------------------------------------------
Revenues and other income
 Marathon Group                          $8,336 $9,228  $26,247 $25,793
 U. S. Steel Group                        1,660  1,475    4,961   4,719
 Eliminations                                (8)   (24)     (32)    (54)
                                         ------ ------   ------  ------
 Total revenues and other income         $9,988$10,679  $31,176 $30,458
Less:
 Excise taxes(a)                          1,152  1,121    3,322   3,268
 Matching buy/sell transactions(a)        1,150  1,086    3,280   3,381
                                         ------ ------   ------  ------
 Revenues and other income
     excluding above items               $7,686 $8,472  $24,574 $23,809
                                         ====== ======   ======  ======
------
(a)  Consumer excise taxes on petroleum products and merchandise and matching
     crude oil and refined products buy/sell transactions settled in cash are
     included in both revenues and costs and expenses for the Marathon Group and
     USX consolidated.

     For discussion of revenues and other income by Group, see Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
Marathon Group and the U. S. Steel Group.

<PAGE> 31

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Income from operations for the third quarter and the first nine months of
2001 and 2000 are set forth in the following table:

                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions)                      2001  2000     2001   2000
------------------------------------------------------------------------------
Reportable segments
 Marathon Group
  Exploration & production (a)             $259   $464  $1,304  $1,128
  Refining, marketing & transportation      575    299   1,693     968
  Other energy related businesses (a)         6     13      38      27
                                         ------ ------  ------  ------
   Income for reportable segments
     -Marathon Group                       $840   $776  $3,035  $2,123

 U. S. Steel Group
  Domestic Steel                           $(47)   $23   $(267)   $145
  U. S. Steel Kosice                         39      -     121       -
                                          -----  -----   -----   -----
   Income (loss) for reportable segments
     -U. S. Steel Group                     $(8)   $23   $(146)   $145

 Income for reportable segments 
   - USX Corporation                        832    799   2,889   2,268

Items not allocated to segments:
 Marathon Group                            (260)   (47)   (288)     (9)
 U. S. Steel Group                          (17)    37      (7)    118
                                          -----  -----   -----   -----
  Total income from operations
     -USX Corporation                      $555   $789  $2,594  $2,377
---------
(a)Certain amounts have been reclassified from Exploration & production to
   Other energy related businesses to reflect 2001 classifications.


     For discussion of income from operations by segment, see Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
Marathon Group and the U. S. Steel Group.

     Net interest and other financial costs for the third quarter of 2001
decreased $6 million compared to the third quarter of 2000.  The first nine
months of 2001 included a favorable adjustment of $76 million related to prior
years' taxes.  Excluding this adjustment, net interest and other financial costs
for the first nine months of 2001 decreased $8 million compared to the same
period in 2000.  The decreases for the third quarter and nine months of 2001
were primarily due to increased interest income as a result of higher invested
cash balances, partially offset by an increase in interest expense due to higher
average debt levels.

     The minority interest in income of MAP, which represents Ashland's 38
percent ownership interest, increased $108 million and $277 million in the third
quarter and first nine months of 2001, respectively, due to higher MAP income.
For further discussion, see Management Discussion and Analysis of Financial
Condition and Results of Operations for the Marathon Group.

<PAGE> 32

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Provisions for income taxes decreased $366 million and $355 million for the
third quarter and first nine months of 2001, respectively.  The provisions were
based on tax rates and amounts that recognize management's best estimate of
current and deferred tax assets and liabilities.  The first nine months of 2001
included a $33 million tax benefit associated with the Transtar reorganization
and deferred tax charges of $27 million related to certain prior years' taxes.
The third quarter and first nine months of 2000 included a one-time, noncash
deferred tax charge of $235 million as a result of the change in amount, timing
and nature of expected future foreign source income due to the exchange of
Marathon's interest in Sakhalin Energy for other oil and gas producing
interests.

     Cumulative effect of change in accounting principle of $8 million, net of a
tax benefit of $5 million, in the first nine months of 2001 was an unfavorable
transition adjustment related to adopting SFAS No. 133.  For further discussion,
see Note 2 to the USX Consolidated Financial Statements.

     Net income was $170 million for the third quarter of 2001, an increase of
$30 million compared to the third quarter of 2000 reflecting an increase of
$72 million for the Marathon Group and a decrease of $42 million for the U. S.
Steel Group.  Net income was $1,231 million for the first nine months of 2001,
an increase of $371 million compared with the first nine months of 2000,
reflecting an increase of $533 million for the Marathon Group and a $162 million
decrease for the U. S. Steel Group.

Dividends to Stockholders
-------------------------
     On October 30, 2001, the USX Board of Directors (the "Board") declared
dividends of 23 cents per share on Marathon Stock and 10 cents per share on
Steel Stock, payable December 10, 2001, to stockholders of record at the close
of business on November 21, 2001. The Board also declared a dividend of $0.8125
per share on USX's 6.50% Cumulative Convertible Preferred Stock, payable
December 31, 2001, to stockholders of record at the close of business on
December 3, 2001.

     On August 13, 2001, Marathon Oil Canada Limited, an indirect subsidiary of
Marathon Oil Company, redeemed its outstanding securities exchangeable solely
into Marathon Stock through an exchange for shares of Marathon Stock on a one-
for-one basis.

Balance Sheet
-------------
     Current assets at September 30, 2001 increased $87 million from year-end
2000 primarily due to an increase in cash and cash equivalents and inventories,
partially offset by a decrease in assets held for sale and receivables.  The
increase in cash and cash equivalents resulted from an increase in domestic time
deposits primarily due to the issuance of the 10.75% Senior Notes.  The increase
in inventories primarily resulted from an increase in refined products and crude
oil inventories.  The decrease in assets held for sale primarily resulted from
the contribution of the Yates field assets to a joint venture, partially offset
by certain Canadian assets and Speedway SuperAmerica stores held for sale at
September 30, 2001.  The decrease in receivables was mainly due to a decrease in
accounts receivable related to lower commodity prices, partially offset by an
increase in other receivables related to derivative activity for the Marathon
Group.

<PAGE> 33

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Investments and long-term receivables increased $615 million from year-end
2000, primarily due to the contribution of assets to the MKM Partners L.P. and
Pilot Travel Centers LLC joint ventures.

     Net property, plant and equipment at September 30, 2001 increased
$357 million from year-end 2000 primarily due to the acquisitions of Pennaco
Energy, Inc. ("Pennaco") and East Chicago Tin and the Transtar reorganization,
partially offset by the contribution of assets to Pilot Travel Centers LLC.

     Current liabilities at September 30, 2001 decreased $213 million compared
to year-end 2000 primarily due to a decrease in accounts payable, debt due
within one year and notes payable, partially offset by an increase in accrued
taxes.  The increase in accrued taxes was primarily related to the settlement of
prior years' taxes.

     Total long-term debt and notes payable was $4,367 million at September 30,
2001, $243 million lower than year-end 2000.  During the first nine months of
2001, USX repaid outstanding balances from year-end on notes payable, revolving
credit agreements and commercial paper.  USX also repaid $250 million of 9.80%
notes when they matured in July of 2001.  Partially offsetting the debt
repayments was the issuance of $535 million of 10.75% Senior Notes.  Most of the
debt is a direct obligation of, or is guaranteed by, USX.

     Employee benefits at September 30, 2001 increased $202 million compared to
year-end 2000 about half of which was due to the addition of employees and
retirees with the Transtar reorganization and the acquisition of the tin mill
products business of LTV Corporation.  The remainder of the increase was
primarily due to ongoing accruals in excess of cash payments from company
assets.  Following the elective $500 million Voluntary Employee Benefit
Association ("VEBA") funding in the fourth quarter of 2000, which decreased the
employee benefits liability, most union retiree medical claims are being paid
from the VEBA instead of company assets.

     Minority interest in Marathon Ashland Petroleum LLC increased by
$189 million from year-end 2000 due to Ashland's share of recorded MAP income
exceeding cash distributions to Ashland.

     Total stockholders' equity increased $1,041 million from year-end 2000
primarily due to increased net income, partially offset by dividends paid.

Cash Flows
----------
     Net cash provided from operating activities totaled $2,892 million in the
first nine months of 2001, a $1,136 million increase from the first nine months
of 2000, reflecting increases of $962 million for the Marathon Group and
$174 million for the U. S. Steel Group.  The increases primarily reflect higher
net income for the Marathon Group and lower use of working capital.  For
details, see Management's Discussion and Analysis of Financial Condition and
Results of Operation for each Group.


<PAGE> 34

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Capital expenditures for property, plant and equipment in the first nine
months of 2001 were $1,217 million compared with $1,011 million for the first
nine months of 2000.  For further details, see Management's Discussion and
Analysis of Financial Condition and Results of Operations for each of the
respective Groups.

     Contract commitments to acquire property, plant and equipment and long-term
investments at September 30, 2001, totaled $445 million compared with
$663 million at December 31, 2000.  In addition, MAP has a commitment to spend
approximately $270 million over the next eight years for future environmental
projects.

     The acquisition of Pennaco Energy, Inc. included cash payments of
$506 million.  For further discussion of Pennaco, see Note 5 to the USX
Consolidated Financial Statements.

     Cash from disposal of assets was $198 million in the first nine months of
2001, compared with $269 million in the first nine months of 2000.  Proceeds in
2001 were for the disposition of various Canadian oil fields, SSA stores, and
various domestic production properties.  Proceeds in 2000 were mainly from the
disposition of Marathon's 33.34 percent interest in the Angus/Stellaria
development in the Gulf of Mexico.

     The net change in restricted cash was a net withdrawal of $17 million in
the first nine months of 2001, compared with a net withdrawal of $12 million in
the first nine months of 2000.  Restricted cash in both periods primarily
reflected the net effects of cash deposited and withdrawn from domestic
production property dispositions and acquisitions.

     Financial obligations (the net of commercial paper and revolving credit
agreements and other debt borrowings and repayments on the Consolidated
Statement of Cash Flows) decreased $262 million in the first nine months of 2001
compared with a decrease of $384 million in the first nine months of 2000.  The
decrease in 2001 reflects net cash provided from operating activities and asset
sales in excess of cash used for capital expenditures, acquisitions, dividend
payments and minority interest distributions.

     Distributions to minority shareholder of MAP were $450 million in the first
nine months of 2001, compared with $212 million in the first nine months of
2000.  For further details, see Management's Discussion and Analysis of
Financial Condition and Results of Operations for the Marathon Group.

Debt and Preferred Stock Ratings
--------------------------------
     Standard & Poor's Corp. rates USX's and Marathon's senior debt BBB+, USX's
subordinated debt BBB- and preferred stock BB+.  Moody's Investor Services, Inc.
rates USX's and Marathon's senior debt Baa1, USX's subordinated debt Baa2 and
preferred stock Baa3.  Fitch IBCA Duff & Phelps rates USX's senior notes BBB and
USX's subordinated debt as BBB-.  All senior debt of USX holds an investment
grade rating.  In connection with the Proposed Separation, Standard & Poor's
reported that they had assigned a corporate credit rating of BBB+ for Marathon
Oil Corporation with a stable outlook and a corporate credit rating of BB to
United States Steel Corporation with a negative outlook, assuming the Proposed
Separation is completed.  Moody's has assigned a Ba2 senior implied rating to
United States Steel Corporation with a negative outlook.  Additionally, Standard
& Poor's and Moody's have assigned BB and Ba3 ratings, respectively, to United
States Steel LLC's $535 million Senior Notes due August 1, 2008.

<PAGE> 35

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

Liquidity
---------
     At September 30, 2001, USX had no borrowings against its $1,354 million
long-term revolving credit agreement, no borrowings against its $451 million 
364-day facility and no commercial paper borrowings. There were no borrowings
against USX's short-term lines of credit totaling $75 million at September 30,
2001.  At September 30, 2001, there were no borrowings against the USSK short-
term credit facility.  At September 30, 2001, MAP had no borrowings against its
revolving credit agreements with banks and no amounts outstanding against its
revolving credit agreement with Ashland.  At September 30, 2001, USX had
$27 million outstanding under a five-year promissory note agreement expiring in
2006.

     On July 27, 2001, United States Steel LLC and United States Steel LLC's
wholly owned subsidiary, United States Steel Financing Corp., issued
$385 million of Senior Notes due August 1, 2008 ("Notes"), at an interest rate
of 10.75 percent.  An additional $150 million of Notes were issued September 11,
2001.  The Notes have been attributed to and are reflected in the financial
statements of both groups.  The Notes were issued to meet, in part, the
conditions of the Proposed Separation related to the completion of necessary
financing arrangements.  These Notes are guaranteed by USX Corporation until
completion of the Proposed Separation, at which time they will be solely the
obligation of United States Steel Corporation.  The Notes allow their redemption
if the Proposed Separation does not occur.  The Notes contain certain covenants
that impose restrictions on certain activities of United States Steel
Corporation.  For a description of these covenants, see Management's Discussion
and Analysis of Financial Condition and Results of Operation for the U. S. Steel
Group, "Liquidity", on page 98.

     On November 7, 2001, United States Steel LLC commenced offers to exchange,
up to an aggregate of $365 million:
   - $50 principal amount of its 10% Senior Quarterly Income Debt Securities due
     2031 ("SQUIDS") for each validly tendered and accepted share of 6.50% 
     Cumulative Convertible Preferred Stock of USX Corporation ("6.50% Preferred
     Stock"), up to a maximum of $77 million;
   - $50 principal amount of its SQUIDS for each validly tendered and accepted
     6.75% Convertible Quarterly Income Preferred Security ("6.75% QUIPS") of 
     USX Capital Trust I, up to a maximum of $127 million, plus a cash payment 
     for accrued but unpaid distributions; and
   - $25 principal amount of its SQUIDS for each validly tendered and accepted
     8.75% Cumulative Monthly Income Preferred Share, Series A ("8.75% MIPS"), 
     of USX Capital LLC, up to a maximum of $161 million, plus a cash payment 
     for accrued but unpaid dividends.
Holders of shares of 6.50% Preferred Stock tendered and accepted in the exchange
offers will not be paid accrued dividends in the exchange offers.  Rather, all
holders of 6.50% Preferred Stock as of December 3, 2001 will receive payment on
December 31, 2001 in the amount of the full quarterly dividend payable on the
6.50% Preferred Stock for the fourth quarter.  The exchange offers are scheduled
to expire on December 7, 2001, unless extended or terminated.  The SQUIDS are
being issued to meet, in part, the conditions of the Proposed Separation and
will be fully and unconditionally guaranteed by USX Corporation until completion
of the Proposed Separation, at which time they will be solely the obligation of
United States Steel Corporation.  The SQUIDS provide for redemption if the
Proposed Separation does not

<PAGE> 36

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

occur.  The covenants included in the SQUIDS are similar to those currently in
USX indentures. All outstanding shares of 6.50% Preferred Stock at the effective
time of the Proposed Separation will be converted into the right to receive, in
cash, $50 plus accrued but unpaid dividends, and all outstanding 6.75% QUIPS at
the effective time of the Proposed Separation will be redeemed for a cash
payment of $50 plus accrued but unpaid distributions.  All outstanding 8.75%
MIPS will be redeemed on December 31, 2001 for a cash payment of $25 plus
accrued but unpaid dividends.

     United States Steel LLC is currently negotiating a $400 million Accounts
Receivable Facility that will provide a portion of the funding needed to
implement the Proposed Separation.  United States Steel LLC is also negotiating
a $400 million Inventory Financing Facility to meet the financing needs of the
Proposed Separation.  Both facilities are expected to close in November 2001.

     Capital expenditures in the first nine months of 2001 were $1.2 billion and
are expected to be approximately $2.1 billion for the full year, including
expenditures by recently acquired businesses.  Contract commitments for capital
expenditures at September 30, 2001 totaled $445 million.

     USX management believes that its short-term and long-term liquidity is
adequate to satisfy its obligations as of September 30, 2001, to complete
currently authorized capital spending programs and to complete the Proposed
Separation.  Future requirements for USX's business needs, including the funding
of capital expenditures, debt maturities for the balance of 2001 and years 2002
and 2003, and any amounts that may ultimately be paid in connection with
contingencies (which are discussed in Note 18 to the USX Consolidated Financial
Statements), are expected to be financed by a combination of internally
generated funds, proceeds from the sale of stock, borrowings and other external
financing sources.  Until the Proposed Separation is implemented or abandoned,
USX management believes that it will be more difficult to access traditional
debt and equity markets.

     USX management's opinion concerning liquidity and USX's ability to avail
itself in the future of the financing options mentioned in the above forward-
looking statements are based on currently available information.  To the extent
that this information proves to be inaccurate, future availability of financing
may be adversely affected.  Factors that could affect the availability of
financing include the performance of each Group (as measured by various factors
including cash provided from operating activities), the state of worldwide debt
and equity markets, investor perceptions and expectations of past and future
performance, the overall U.S. financial climate, and, in particular, with
respect to borrowings, by levels of USX's outstanding debt and credit ratings by
rating agencies.

Environmental Matters, Contingencies and Commitments
----------------------------------------------------
     USX has incurred and will continue to incur substantial capital, operating
and maintenance, and remediation expenditures as a result of environmental laws
and regulations.  To the extent these expenditures, as with all costs, are not
ultimately reflected in the prices of USX's products and services, operating
results will be adversely affected.  USX believes that domestic competitors of
the

<PAGE> 37
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

U. S. Steel Group and substantially all the competitors of the Marathon Group
are subject to similar environmental laws and regulations.  However, the
specific impact on each competitor may vary depending on a number of factors,
including the age and location of its operating facilities, marketing areas,
production processes and the specific products and services it provides.

     USX has been notified that it is a potentially responsible party ("PRP") at
33 waste sites under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") as of September 30, 2001.  In addition, there are 14
sites where USX has received information requests or other indications that USX
may be a PRP under CERCLA but where sufficient information is not presently
available to confirm the existence of liability.  There are also 150 additional
sites, excluding retail gasoline stations, where remediation is being sought
under other environmental statutes, both federal and state, or where private
parties are seeking remediation through discussions or litigation.  Of these
sites, 13 were associated with properties conveyed to MAP by Ashland for which
Ashland has retained liability for substantially all costs associated with
remediation.  At many of these sites, USX is one of a number of parties involved
and the total cost of remediation, as well as USX's share thereof, is frequently
dependent upon the outcome of investigations and remedial studies.  USX accrues
for environmental remediation activities when the responsibility to remediate is
probable and the amount of associated costs is reasonably determinable.  As
environmental remediation matters proceed toward ultimate resolution or as
additional remediation obligations arise, charges in excess of those previously
accrued may be required.

     New Tier II gasoline rules, which were finalized by the U.S. Environmental
Protection Agency ("EPA") in February 2000, and the diesel fuel rules, which
were finalized in January 2001, require substantially reduced sulfur levels.
The combined capital cost to achieve compliance with the gasoline and diesel
regulations could amount to approximately $700 million between 2002 and 2006.
This is a forward-looking statement and can only be a broad-based estimate due
to the ongoing evolution of regulatory requirements.  Some factors (among
others) that could potentially affect gasoline and diesel fuel compliance costs
include obtaining the necessary construction and environmental permits,
operating and logistical considerations, and unforeseen hazards such as weather
conditions.

     In May 2001, Marathon and MAP settled in a consent decree EPA allegations
that the Robinson refinery did not qualify for an exemption under the National
Emission Standards for Benzene Waste Operations pursuant to the Clean Air Act
("CAA").  The government had alleged in a federal court lawsuit that the
refinery's Total Annual Benzene releases exceeded the limitation of 10 megagrams
per year, and as a result, the refinery was in violation of the benzene waste
emission control, recordkeeping, and reporting requirements.  The consent
decree was approved by the court on July 26, 2001 and requires Marathon and MAP
to pay a combined $1.6 million civil penalty, perform $125,000 in supplemental
environmental projects, as part of an enforcement action for alleged CAA
violations, and install various controls and other improvements.

<PAGE> 38

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     In 1998, the EPA conducted multi-media inspections of MAP's Detroit and
Robinson refineries, covering compliance with the CAA, the Clean Water Act,
reporting obligations under the Emergency Planning and Community Right to Know
Act, CERCLA and the handling of process waste.  The EPA served a number of
Notices of Violation ("NOV") and Findings of Violation as a result of these
inspections but these allegations were resolved as part of the New Source Review
("NSR") global consent decree which MAP agreed to on May 11, 2001.  MAP's
settlement with the EPA includes all of MAP's refineries and commits MAP to
specific control technologies and implementation schedules for approximately
$270 million in environmental capital expenditures and improvements to MAP's
refineries over approximately an eight year period that are consistent with
MAP's current capital spending plans.  It also commits MAP to payment of an
aggregate civil penalty in the amount of $3.8 million and the performance of
about $8 million in supplemental environmental projects, as part of an
enforcement action for alleged CAA violations.  MAP believes that this
settlement will provide MAP with increased permitting and operating flexibility
while achieving significant emission reductions.  The court approved this
consent decree on August 28, 2001.

     In 2000, the Kentucky Natural Resources and Environmental Cabinet sent
Marathon Ashland Pipe Line LLC a NOV seeking a civil penalty associated with a
pipeline spill earlier that year in Winchester, Kentucky.  MAP has settled this
NOV in concept for a $170,000 penalty and reimbursement of past response costs
up to $131,000.  A final administrative order resolving this matter is expected
in the fourth quarter 2001.

     In October 1996, USX was notified by the Indiana Department of
Environmental Management ("IDEM") acting as lead trustee, that IDEM and the U.S.
Department of the Interior had concluded a preliminary investigation of
potential injuries to natural resources related to the releases of hazardous
substances from various municipal and industrial sources along the east branch
of the Grand Calumet River and Indiana Harbor Canal.  The public trustees
completed a pre-assessment screen pursuant to federal regulations and have
determined to perform a Natural Resource Damages Assessment. USX was identified
as a PRP along with 15 other companies owning property along the river and
harbor canal.  USX and eight other PRPs have formed a joint defense group.  In
2000, the trustees concluded their assessment of sediment injuries, which
includes a technical review of environmental conditions.  The PRP joint defense
group has proposed terms for the settlement of this claim which have been
endorsed by representatives of the trustees and the EPA to be included in a
consent decree that USX expects will resolve this claim.  A reserve has been
established for the USX share of this anticipated settlement.
                                        
     The Berks Associates/Douglassville Site ("Berks Site") is situated on a 50-
acre parcel located on the Schuylkill River in Berks County, Pa.  Used oil and
solvent reprocessing operations were conducted on the Berks Site between 1941
and 1986.  In September 1997, USX signed a consent decree to conduct a
feasibility study at the site relating to the alternative remedy.  In 1999, a
new Record of Decision was approved by the EPA and the U.S. Department of
Justice.  On January 19, 2001, USX signed a consent decree with the EPA to
remediate this site.  On April 6, 2001, USX paid $0.4 million for costs
associated with this site.  The only remaining outstanding claim is the natural
resource damages claim filed by the Commonwealth of Pennsylvania.

<PAGE> 39

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     In 1987, the California Department of Health Services ("DHS") issued a
remedial action order for the GBF/Pittsburg landfill near Pittsburg, California.
DHS alleged that from 1972 through 1974, Pittsburg Works arranged for the
disposal of approximately 2.6 million gallons of waste oil, sludge, caustic mud
and acid, which were eventually taken to this landfill for disposal.  In 2000,
the parties reached a buyout arrangement with a third party remediation firm,
whereby the firm agreed to take title to and remediate the site and also
indemnify the PRPs.  This commitment was backed by pollution insurance.  USX's
share to participate in the buyout was approximately $1.1 million.  Payment of
the USX buyout amount was made in December 2000.  Title to the site was 
transferred to the remediation firm on January 31, 2001.

     In 1987, USX and the PA Department of Environmental Resources ("PADER")
entered into a consent Order to resolve an incident in January 1985 involving
the alleged unauthorized discharge of benzene and other organic pollutants from
Clairton Works in Clairton, Pa. That consent Order required USX to pay a penalty
of $50,000 and a monthly payment of $2,500 for five years. In 1990, USX and the
PADER reached agreement to amend the consent Order. Under the amended Order, USX
agreed to remediate the Peters Creek Lagoon (a former coke plant waste disposal
site); to pay a penalty of $300,000; and to pay a monthly penalty of up to
$1,500 each month until the former disposal site is closed. Remediation costs
have amounted to $9.8 million with another $1.2 million presently projected to
complete the project.

     In 1988, USX and three other PRPs agreed to the issuance of an
administrative order by the EPA to undertake emergency removal work at the
Municipal & Industrial Disposal Co. site in Elizabeth Township, Pa. The cost of
such removal, which has been completed, was approximately $4.2 million, of which
USX paid $3.4 million. The EPA indicated that further remediation of this site
would be required. In October 1991, the PADER placed the site on the
Pennsylvania State Superfund list and began a Remedial Investigation ("RI")
which was issued in 1997. USX's share of any final allocation formula for
cleanup of the entire site was never determined; however, based on presently
available information, USX may have been responsible for as much as 70% of the
waste material deposited at the site.  PA Department of Environmental Protection
("PADEP"), formerly PADER, issued its Final Feasibility Study Report for the
entire site in August 2001.  The report identifies and evaluates feasible
remedial alternatives and selects three preferred alternatives.  These
alternatives are estimated to cost from $17 million to $20 million.  Consultants
for United States Steel have concluded that a less costly alternative should be
employed at the site, which is estimated to cost $5.5 million. Based on the
allocation of liability that has been recognized for past site cleanup
activities, the United States Steel share of costs for this remedy would be
approximately $3.7 million.

     In November 2000, a NOV was issued by the Jefferson County Health
Department ("JCHD") alleging violation of the Halogenated Solvent National
Emission Standards for Hazardous Air Pollutants and the JCHD Volatile Organic
Compound ("VOC") regulations at the sheet mill stretch leveler at Fairfield
Works.  U. S. Steel Group proposed a civil penalty of $100,000 and a VOC
emission limit, which have been agreed to by JCHD.  A consent order was executed
and approved by the court in May 2001.  The penalty was paid by U. S. Steel
Group in June 2001.

<PAGE> 40

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     In September 2001, USX agreed to an Administrative Order on Consent with
the State of North Carolina for the assessment and cleanup of a Greensboro, NC
fertilizer manufacturing site.  The site was owned by Armour Agriculture
Chemical Company (now named Viad) from 1912 to 1968.  USX owned the site from
1968 to 1986 and sold the site to LaRoche Industries in 1986.  The agreed order
allocated responsibility for assessment and cleanup costs as follows:  Viad -
48%, USX - 26% and LaRoche - 26%; and LaRoche was appointed to be the lead party
responsible for conducting the cleanup.  In March 2001, USX was notified that
LaRoche had filed for protection under the Bankruptcy law.  On August 23, 2001,
the allocation of responsibility for this site assessment and cleanup and the
cost allocation was approved by the bankruptcy court in the LaRoche Bankruptcy.
The estimated remediation costs are $4.4 million to $5.7 million.  USX's
estimated share of these costs is $1.6 million.

     USX is the subject of, or a party to, a number of pending or threatened
legal actions, contingencies and commitments involving a variety of matters,
including laws and regulations relating to the environment (see Note 18 to the
USX Consolidated Financial Statements for a discussion of certain of these
matters).  The ultimate resolution of these contingencies could, individually or
in the aggregate, be material to the USX Consolidated Financial Statements.
However, management believes that USX will remain a viable and competitive
enterprise even though it is possible that these contingencies could be resolved
unfavorably.  See discussion of Liquidity herein.

Outlook
-------
     See Outlook in Management's Discussion and Analysis of Financial Condition
and Results of Operations for the Marathon Group and the U. S. Steel Group.

<PAGE> 41

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                    -----------------------------------------
                                        
Commodity Price Risk and Related Risks
--------------------------------------
     Sensitivity analysis of the incremental effects on pretax income of
hypothetical 10% and 25% changes in commodity prices for commodity-based
derivative instruments are provided in the following table(a):
                                            Incremental Decrease in
                                           Income Before Income Taxes
                                            Assuming a Hypothetical
                                                Price Change of:

(Dollars in millions)                             10%     25%
----------------------------------------------------------------------------
Commodity-Based Derivative Instruments
Marathon Group(b)(c)

    Crude oil(f)(g)                              $8.8   $20.7   (d)

    Natural gas(f)(g)                             8.2    21.2   (d)

    Refined products(f)(g)                        0.7     4.6   (d)


U. S. Steel Group

    Natural Gas                                   1.3     3.2   (e)

    Zinc                                          2.8     6.9   (e)

    Tin                                           0.2     0.6   (e)

      (a)  With the adoption of SFAS No. 133, the definition of a derivative
      instrument has been expanded to include certain fixed price physical
      commodity contracts.  Such instruments are included in the above table.
      Amounts reflect the estimated incremental effects on pretax income of
      hypothetical 10% and 25% changes in closing commodity prices at
      September 30, 2001.  Management evaluates the portfolios of commodity-
      based derivative instruments on an ongoing basis and adjusts strategies
      to reflect anticipated market conditions, changes in risk profiles and
      overall business objectives.  Changes to the portfolios subsequent to
      September 30, 2001, may cause future pretax income effects to differ from
      those presented in the table.
      (b)  The number of net open contracts varied throughout third quarter
      2001, from a low of 19,040 contracts at July 18, to a high of 39,868
      contracts at September 26, and averaged 24,900 for the quarter.  The type
      of derivative instruments and number of positions entered into will vary
      which changes the composition of the portfolio.  Because of these
      variations, the number of open contracts, by itself, cannot be used to
      predict future income effects.
      (c)  The calculation of sensitivity amounts for basis swaps assumes that
      the physical and paper indices are perfectly correlated.  Gains and
      losses on options are based on changes in intrinsic value only.
      (d)  Price increase.
      (e)  Price decrease.
      (f)  The direction of the price change used in calculating the
      sensitivity amount for each commodity reflects that which would result in
      the largest incremental decrease in pretax income.
      (g)  Adjusted to reflect Marathon's 62 percent ownership of MAP.

<PAGE> 42

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                    -----------------------------------------
                                        
Interest Rate Risk
------------------
     USX is subject to the effects of interest rate fluctuations on certain of
its non-derivative financial instruments.  A sensitivity analysis of the
projected incremental effect of a hypothetical 10% decrease in September 30,
2001 interest rates on the fair value of USX's non-derivative financial
instrument is provided in the following table:

(Dollars in millions)
-------------------------------------------------------------------------------
As of September 30, 2001
                                                           Incremental
                                                           Increase in
Non-Derivative                                        Fair     Fair
Financial Instruments(a)                             Value   Value(b)
-------------------------------------------------------------------------------
Financial assets:
 Investments and
   long-term receivables                             $272       $ -
-------------------------------------------------------------------------------
Financial liabilities:
 Long-term debt(c)(d)                              $4,642      $187
 Preferred stock of
   subsidiary                                         245        21
 USX obligated mandatorily redeemable convertible
   preferred securities of a subsidiary trust         184        16
                                                    ------    ------
       Total liabilities                           $5,071      $224
-------------------------------------------------------------------------------
(a)    Fair values of cash and cash equivalents, receivables, notes payable,
   accounts payable and accrued interest approximate carrying value and are
   relatively insensitive to changes in interest rates due to the short-term
   maturity of the instruments. Accordingly, these instruments are excluded from
   the table.
(b)    Reflects, by class of financial instrument, the estimated incremental
   effect of a hypothetical 10% decrease in interest rates at September 30, 2001
   on the fair value of USX's non-derivative financial instruments. For
   financial liabilities, this assumes a 10% decrease in the weighted average
   yield to maturity of USX's long-term debt at September 30, 2001.
(c)    Includes amounts due within one year.
(d)    Fair value was based on market prices where available, or current
   borrowing rates for financings with similar terms and maturities.

<PAGE> 43

                    USX CORPORATION AND SUBSIDIARY COMPANIES
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                    -----------------------------------------
                                        
Foreign Currency Exchange Rate Risk
-----------------------------------
     USX is subject to the risk of price fluctuations related to anticipated
revenues and operating costs, firm commitments for capital expenditures and
existing assets or liabilities denominated in currencies other than U.S.
dollars.  USX has not generally used derivative instruments to manage this risk.
However, USX has made limited use of forward currency contracts to manage
exposure to certain currency price fluctuations.
     
     At September 30, 2001, USX had open Euro forward sale contracts for both
U.S. dollars (total carrying value of approximately $4.2 million) and Slovak
Koruna (total carrying value of approximately $7.3 million).  A 10% increase in
the September 30, 2001 Euro forward rates would result in an immaterial charge
to income.  The entire amount of these contracts is attributed to the U. S.
Steel Group.
     
     At September 30, 2001, USX had open Canadian dollar forward purchase
contracts with a total carrying value of approximately $3 million.  A 10%
increase in the Canadian dollar to U.S. dollar forward rate would result in an
immaterial charge to income.  The entire amount of these contracts is attributed
to the Marathon Group.

Equity Price Risk
-----------------
     As of September 30, 2001, USX was subject to equity price risk and market
liquidity risk related to its investment in VSZ a.s., the former parent of U. S.
Steel Kosice, s.r.o., which is attributed to the U. S. Steel Group.  These risks
are not readily quantifiable.

Safe Harbor
-----------
     USX's quantitative and qualitative disclosures about market risk include
forward-looking statements with respect to management's opinion about risks
associated with USX's use of derivative instruments.  These statements are based
on certain assumptions with respect to market prices and industry supply and
demand for crude oil, natural gas, refined products, steel products and certain
raw materials. To the extent that these assumptions prove to be inaccurate,
future outcomes with respect to USX's hedging programs may differ materially
from those discussed in the forward-looking statements.


<PAGE> 44

                         USX CORPORATION
                        FINANCIAL STATISTICS (Unaudited)
                        --------------------------------


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

REVENUES AND OTHER INCOME

 Marathon Group                          $8,336  $9,228 $26,247 $25,793
 U. S. Steel Group                        1,660   1,475   4,961   4,719
 Eliminations                                (8)    (24)    (32)    (54)
                                        ------- ------- ------- -------
    Total                                $9,988 $10,679 $31,176 $30,458


INCOME (LOSS) FROM OPERATIONS

 Marathon Group                            $580    $729  $2,747  $2,114
 U. S. Steel Group                          (25)     60    (153)    263
                                         ------  ------  ------  ------
    Total                                  $555    $789  $2,594  $2,377




CASH FLOW DATA
--------------

CAPITAL EXPENDITURES

 Marathon Group                            $392    $302 $1,020   $878
 U. S. Steel Group                           56      36    197    133
                                         ------  ------ ------ ------
    Total                                  $448    $338 $1,217 $1,011


<PAGE> 45

Part I - Financial Information (Continued):

     B.   Marathon Group

                        MARATHON GROUP OF USX CORPORATION
                       STATEMENT OF OPERATIONS (Unaudited)
                       -----------------------------------
                                        
                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions, except per 
      share amounts)                      2001    2000   2001   2000
---------------------------------------------------------------------------
REVENUES AND OTHER INCOME:
 Revenues (Note 5)                      $8,502  $9,169 $26,243 $25,588
 Dividend and investee income               34      40     106      68
 Net gains (losses) on disposal of assets (208)      1    (180)     95
 Gain (loss) on ownership change in
  Marathon Ashland Petroleum LLC             1       1      (5)      9
 Other income                                7      17      83      33
                                        ------  ------  ------  ------
  Total revenues and other income        8,336   9,228  26,247  25,793
                                        ------  ------  ------  ------
COSTS AND EXPENSES:
 Cost of revenues (excludes items
  shown below)                           6,046   6,864  18,482  18,927
 Selling, general and
  administrative expenses                  171     151     497     409
 Depreciation, depletion and amortization  302     241     911     727
 Taxes other than income taxes           1,217   1,192   3,541   3,474
 Exploration expenses                       20      51      69     142
                                        ------  ------  ------  ------
  Total costs and expenses               7,756   8,499  23,500  23,679
                                        ------  ------  ------  ------
INCOME FROM OPERATIONS                     580     729   2,747   2,114
Net interest and other financial costs      36      53     109     192
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  321     561   1,988   1,549
Provision for income taxes                 128     440     705     807
                                        ------  ------  ------  ------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE                      193     121   1,283     742
Cumulative effect of change in accounting
 principle                                   -       -      (8)      -
                                        ------  ------  ------  ------
NET INCOME                                $193    $121  $1,275    $742
                                        ======  ======  ======  ======
MARATHON STOCK DATA:
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


Selected notes to financial statements appear on pages 48-60.

<PAGE> 46

                        MARATHON GROUP OF USX CORPORATION
                            BALANCE SHEET (Unaudited)
                        ---------------------------------
                                        
                                        
                                                 September 30December 31
(Dollars in millions)                                2001      2000
--------------------------------------------------------------------------
ASSETS

Current assets:
 Cash and cash equivalents                           $512      $340
 Receivables, less allowance for doubtful
  accounts of $3 and $3                             2,132     2,267
 Inventories                                        1,957     1,867
 Deferred income tax benefits                          35        60
 Assets held for sale                                  51       330
 Other current assets                                 110       121
                                                   ------    ------
     Total current assets                           4,797     4,985

Investments and long-term receivables               1,067       362
Property, plant and equipment, less accumulated
 depreciation, depletion and amortization of
 $10,200 and $9,691                                 9,382     9,375
Prepaid pensions                                      223       207
Other noncurrent assets                               372       303
                                                   ------    ------
     Total assets                                 $15,841   $15,232
                                                   ======    ======
LIABILITIES

Current liabilities:
 Notes payable                                         $-       $80
 Accounts payable                                   2,672     3,021
 Income taxes payable                                 379       364
 Payroll and benefits payable                         200       230
 Accrued taxes                                        358       108
 Accrued interest                                      33        61
 Long-term debt due within one year                    91       148
                                                   ------    ------
     Total current liabilities                      3,733     4,012

Long-term debt, less unamortized discount           1,518     1,937
Deferred income taxes                               1,357     1,354
Employee benefits                                     681       648
Deferred credits and other liabilities                363       412
Preferred stock of subsidiary                         184       184

Minority interest in Marathon Ashland
 Petroleum LLC                                      2,029     1,840

COMMON STOCKHOLDERS' EQUITY                         5,976     4,845
                                                   ------    ------
Total liabilities and common stockholders' equity $15,841   $15,232
                                                   ======    ======

Selected notes to financial statements appear on pages 48-60.

<PAGE> 47
                        MARATHON GROUP OF USX CORPORATION
                       STATEMENT OF CASH FLOWS (Unaudited)
                       -----------------------------------
                                                   Nine Months Ended
                                                      September 30
(Dollars in millions)                                2001      2000
--------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

OPERATING ACTIVITIES:
Net income                                         $1,275      $742
Adjustments to reconcile to net cash provided from
 operating activities:
 Cumulative effect of change in accounting
  principle                                             8         -
 Minority interest in income of Marathon Ashland
  Petroleum LLC                                       650       373
 Depreciation, depletion and amortization             911       727
 Exploratory dry well costs                            12        52
 Pensions and other postretirement benefits            21        17
 Deferred income taxes                               (220)      314
 (Gain) loss on ownership change in Marathon Ashland
  Petroleum LLC                                         5        (9)
 Net (gains) losses on disposal of assets             180       (95)
 Changes in:
     Current receivables                              132      (364)
     Inventories                                     (101)     (146)
     Current accounts payable and accrued expenses   (296)      179
 All other - net                                      136       (39)
                                                   ------    ------
     Net cash provided from operating activities    2,713     1,751
                                                   ------    ------
INVESTING ACTIVITIES:
Capital expenditures                               (1,020)     (878)
Acquisition of Pennaco Energy, Inc.                  (506)        -
Disposal of assets                                    181       252
Restricted cash - withdrawals                          66       216
                - deposits                            (52)     (205)
Investees - investments                                (6)      (62)
          - loans and advances                         (5)       (5)
          - returns and repayments                     10         9
All other - net                                         4        16
                                                   ------    ------
     Net cash used in investing activities         (1,328)     (657)
                                                   ------    ------
FINANCING ACTIVITIES:
Decrease in Marathon Group's portion of USX
 consolidated debt                                   (556)     (586)
Specifically attributed debt - borrowings             112       273
                             - repayments            (112)     (271)
Common stock repurchased                               (1)      (37)
Treasury stock reissued                                11         -
Dividends paid                                       (214)     (203)
Distributions to minority shareholder of
 Marathon Ashland Petroleum LLC                      (450)     (212)
                                                   ------    ------
     Net cash used in financing activities         (1,210)   (1,036)
                                                   ------    ------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                (3)       (4)
                                                   ------    ------
NET INCREASE IN CASH AND CASH EQUIVALENTS             172        54
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR        340       111
                                                   ------    ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $512      $165
                                                   ======    ======
Cash used in operating activities included:
 Interest and other financial costs paid (net of
  amount capitalized)                               $(150)    $(233)
 Income taxes paid, including settlements with the
  U. S. Steel Group                                  (653)     (466)
      Selected notes to financial statements appear on pages 48-60.

<PAGE> 48

                        MARATHON GROUP OF USX CORPORATION
                     SELECTED NOTES TO FINANCIAL STATEMENTS
                     --------------------------------------
                                   (Unaudited)


    1.   The information furnished in these financial statements is unaudited
    but, in the opinion of management, reflects all adjustments necessary for a
    fair presentation of the results for the periods covered.  All such
    adjustments are of a normal recurring nature unless disclosed otherwise.
    These financial statements, including selected notes, have been prepared in
    accordance with the applicable rules of the Securities and Exchange
    Commission and do not include all of the information and disclosures
    required by generally accepted accounting principles for complete financial
    statements.  Certain reclassifications of prior year data have been made to
    conform to 2001 classifications.  Additional information is contained in
    the USX Annual Report on Form 10-K for the year ended December 31, 2000, as
    amended.

    2.   The financial statements of the Marathon Group include the financial
    position, results of operations and cash flows for the businesses of
    Marathon Oil Company (Marathon) and certain other subsidiaries of USX, and
    a portion of the corporate assets and liabilities and related transactions
    which are not separately identified with ongoing operating units of USX.
    These financial statements are prepared using the amounts included in the
    USX consolidated financial statements.  Corporate amounts reflected in
    these financial statements are determined based upon methods which
    management believes to be reasonable.  The accounting policies applicable
    to the preparation of the financial statements of the Marathon Group may be
    modified or rescinded in the sole discretion of the Board of Directors of
    USX (Board), although the Board has no present intention to do so.  The
    Board may also adopt additional policies depending on the circumstances.

         Although the financial statements of the Marathon Group and the U. S.
    Steel Group separately report the assets, liabilities (including contingent
    liabilities) and stockholders' equity of USX attributed to each such Group,
    such attribution of assets, liabilities (including contingent liabilities)
    and stockholders' equity between the Marathon Group and the U. S. Steel
    Group for the purpose of preparing their respective financial statements
    does not affect legal title to such assets and responsibility for such
    liabilities.  Holders of USX-Marathon Group Common Stock (Marathon Stock)
    and USX-U. S. Steel Group Common Stock (Steel Stock) are holders of common
    stock of USX and continue to be subject to all the risks associated with an
    investment in USX and all of its businesses and liabilities.  Financial
    impacts arising from one Group that affect the overall cost of USX's
    capital could affect the results of operations and financial condition of
    the other Group.  In addition, net losses of either Group, as well as
    dividends or distributions on any class of USX Common Stock or series of
    Preferred Stock and repurchases of any class of USX Common Stock or series
    of Preferred Stock at prices in excess of par or stated value, will reduce
    the funds of USX legally available for payment of dividends on both classes
    of Common Stock.  Accordingly, the USX consolidated financial information
    should be read in connection with the Marathon Group financial information.

<PAGE> 49

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    2.   (Continued)

         The financial statement provision for income taxes and related tax
    payments or refunds have been reflected in the Marathon Group and the
    U. S. Steel Group financial statements in accordance with USX's tax
    allocation policy for such groups.  In general, such policy provides that
    the consolidated tax provision and related tax payments or refunds are
    allocated between the Marathon Group and the U. S. Steel Group for group
    financial statement purposes, based principally upon the financial income,
    taxable income, credits, preferences and other amounts directly related to
    the respective groups.

         The provision for income taxes for the Marathon Group is based on tax
    rates and amounts which recognize management's best estimate of current and
    deferred tax assets and liabilities.  Differences between the combined
    interim tax provisions of the Marathon and U. S. Steel Groups and USX
    consolidated are allocated to each group based on the relationship of the
    individual group provisions to the combined interim provisions.

    3.   The Marathon Group uses commodity-based and foreign currency
    derivative instruments to manage its exposure to price risk.  Management
    has authorized the use of futures, forwards, swaps and options to reduce
    the effects of fluctuations related to the purchase, production or sale of
    crude oil, natural gas, and refined products and also certain business
    transactions denominated in foreign currencies.

         Effective January 1, 2001, USX adopted Statement of Financial
    Accounting Standards No. 133, "Accounting for Derivative Instruments and
    Hedging Activities" (SFAS No. 133), as amended by SFAS Nos. 137 and 138.
    This Standard, as amended, requires recognition of all derivatives at fair
    value as either assets or liabilities.  Changes in the fair value of all
    derivatives are recognized immediately in earnings, unless the derivative
    qualifies as a hedge of future cash flows or certain foreign currency
    exposures.  For derivatives qualifying as hedges of future cash flows or
    certain foreign currency exposures, the effective portion of any changes in
    fair value is recognized in a component of stockholders' equity called
    other comprehensive income ("OCI") and then reclassified to earnings when
    the underlying anticipated transaction is consummated.  Any ineffective
    portion of such hedges is recognized in earnings as it occurs.  For
    derivatives designated as hedges of the fair value of recognized assets,
    liabilities or firm commitments, changes in the fair value of the hedged
    item are recognized immediately in earnings.  Since changes in fair value
    of the related derivative are also recognized immediately in earnings, the
    net effect of that accounting is to reflect in earnings the extent to which
    the hedge is not effective in achieving offsetting changes in fair value.


<PAGE> 50

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        
                                        
    3.   (Continued)

         In order to apply hedge accounting under SFAS No. 133, the Marathon
    Group is required to establish at the inception of the hedge the method it
    will use for assessing the effectiveness of the hedging derivative and the
    measurement approach for determining the ineffective portion of the hedge.
    Generally, the Marathon Group has not elected to designate derivative
    instruments as qualifying for hedge accounting treatment.  As a result, the
    changes in fair value of most derivatives are recognized immediately in
    earnings, while the changes in the fair value of the underlying items
    generally are not recognized until the transaction is consummated.

         A portion of the cumulative effect adjustment relating to the adoption
    of SFAS No. 133 was recognized in OCI which relates only to deferred gains
    or losses existing as of the close of business on December 31, 2000, for
    hedge transactions under prior accounting rules.  OCI is also impacted by
    the changes in fair value associated with cash flow hedges.  A
    reconciliation of the changes in OCI relating to derivative instruments is
    as follows (amounts in millions):

                                                    Third      Nine
                                                   Quarter    Months
                                                    Ended     Ended
                                                   Sept. 30  Sept. 30
   Deferred gain (loss), net of tax                  2001      2001
   -------------------------------------------------------------------------
   Beginning balance                                  $42        $-
   Cumulative effect adjustment                         -        (8)
   Reclassification of the cumulative effect
    adjustment into earnings                           (7)       28
   Changes in fair value                               20        35
   Reclassification to earnings                         2         2
                                                     ----      ----
   Balance at September 30, 2001                      $57       $57
                                                     ====      ====

         Of the $57 million recorded in OCI as of September 30, 2001, $13
    million, net of income taxes, is expected to be reclassified to earnings
    over the 12-month period ending September 30, 2002.  The actual amounts
    that will be reclassified to earnings over the next twelve months will vary
    as a result of continual changes in fair value.

         The ineffective portion of changes in the fair value, on a before tax
    basis,  for cash flow hedges recognized during the third quarter and nine
    months of 2001 was a favorable $6 million and $10 million, respectively.
    In addition, during the third quarter, $2 million was recognized in income
    before tax as the result of a discontinuation of a portion of a cash flow
    natural gas equity production hedge.  These amounts were included in
    revenues.

         The futures contracts used in cash flow hedge strategies vary in
    duration with certain contracts extending to December 2002.

<PAGE> 51

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    3.   (Continued)

         There was no ineffectiveness associated with fair value hedges for the
    third quarter or year-to-date because the hedging instrument and the
    existing firm commitment contract are priced on the same underlying index.
    Certain derivative instruments used in the fair value hedges extend into
    2008.

         The Marathon Group did not have any foreign currency contracts that
    qualified for hedge accounting.  The changes in fair value of the forward
    currency contracts are recognized immediately in earnings.  These forward
    currency contracts have various maturities extending into 2001.

    4.   In June 2001, the Financial Accounting Standards Board (FASB) issued
    Statements of Financial Accounting Standards No. 141 "Business
    Combinations" (SFAS No. 141), No. 142 "Goodwill and Other Intangible
    Assets" (SFAS No. 142) and No. 143 "Accounting for Asset Retirement
    Obligations" (SFAS No. 143).

         SFAS No. 141 requires that all business combinations completed after
    June 30, 2001, be accounted for under the purchase method.  This standard
    also establishes for all business combinations made after June 30, 2001,
    specific criteria for the recognition of intangible assets separately from
    goodwill.  SFAS No. 141 also requires that the excess of fair value of
    acquired assets over cost in a business combination (negative goodwill) be
    recognized immediately as an extraordinary gain, rather than deferred and
    amortized.

         SFAS No. 142 addresses the accounting for goodwill and other
    intangible assets after an acquisition.  The most significant changes made
    by SFAS No. 142 are: 1) goodwill and intangible assets with indefinite
    lives will no longer be amortized; 2) goodwill and intangible assets with
    indefinite lives must be tested for impairment at least annually; and 3)
    the amortization period for intangible assets with finite lives will no
    longer be limited to forty years.  USX will adopt SFAS No. 142 effective
    January 1, 2002, as required.  At that time, amortization of existing
    goodwill will cease on the unamortized portion associated with previous
    acquisitions and certain investments accounted for under the equity method.
    This will have a favorable impact on the results of operations of the
    Marathon Group of approximately $5 million, net of tax, annually beginning
    in 2002.

<PAGE> 52

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    4.   (Continued)

         SFAS No. 143 establishes a new accounting model for the recognition
    and measurement of retirement obligations associated with tangible long-
    lived assets.  SFAS No. 143 requires that an asset retirement cost should
    be capitalized as part of the cost of the related long-lived asset and
    subsequently allocated to expense using a systematic and rational method.
    USX will adopt the Statement effective January 1, 2003.  The transition
    adjustment resulting from the adoption of SFAS No. 143 will be reported as
    a cumulative effect of a change in accounting principle.  At this time, the
    Marathon Group cannot reasonably estimate the effect of the adoption of
    this Statement on either its financial position or results of operations.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for
    Impairment or Disposal of Long-Lived Assets" (SFAS No. 144). This Statement
    establishes a single accounting model for long-lived assets to be disposed
    of by sale and provides additional implementation guidance for assets to be
    held and used and assets to be disposed of other than by sale.  There will
    be no financial implication related to the adoption of SFAS No. 144, and
    the guidance will be applied on a prospective basis.  The Marathon Group
    will adopt the Statement effective January 1, 2002.

    5.   Included in revenues and costs and expenses for the third quarter of
    2001 and 2000 were $1,152 million and $1,121 million, respectively,
    representing excise taxes on petroleum products and merchandise.  Similar
    amounts for the nine months of 2001 and 2000 were $3,322 million and $3,268
    million, respectively.

    6.   The Marathon Group's total comprehensive income was $208 million for
    the third quarter of 2001, $121 million for the third quarter of 2000,
    $1,335 million for the nine months of 2001 and $739 million for the nine
    months of 2000.

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

    8.   In the first quarter 2001, 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 cash purchase price of Pennaco was $506 million.  The
    acquisition was accounted for under the purchase method of accounting.  The
    excess of the purchase price over the preliminary fair value of net assets
    acquired (goodwill) was $64 million and was originally to be amortized over
    17 years.  However, as a result of USX's adoption of SFAS No. 142,
    effective January 1, 2002, the Marathon Group will cease the amortization
    of goodwill and will test the unamortized balance for impairment on an
    annual basis.  Results of operations for the nine months of 2001 include
    the results of Pennaco from February 7, 2001.


<PAGE> 53

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        
                                        
    8.   (Continued)

         The following unaudited pro forma data for the Marathon Group includes
    the results of operations of Pennaco giving effect to the acquisition as if
    it had been consummated at the beginning of the years presented.  The pro
    forma data is based on historical information and does not necessarily
    reflect the actual results that would have occurred nor is it necessarily
    indicative of future results of operations.
                              
                                                   Nine Months Ended
                                                      September 30
     (In millions, except per share amounts)         2001      2000
     ------------------------------------------------------------------------
     Revenues and other income                    $26,255   $25,825
     Income before cumulative effect of change in
      accounting principle                          1,281       716
      - Per common share - basic                     4.15      2.29
                         - diluted                   4.14      2.29
     Net income                                     1,273       716
      - Per common share - basic                     4.12      2.29
                         - diluted                   4.11      2.29

    9.   In the third quarter of 2001, MAP and Pilot Corporation formed a joint
    venture combining their travel center operations.  The joint venture
    company named Pilot Travel Centers LLC, commenced operations on September
    1, 2001 and is accounted for under the equity method of accounting.

         In December 2000, Marathon and Kinder Morgan Energy Partners, L.P.
    signed a definitive agreement to form a joint venture combining certain of
    their oil and gas producing activities in the U.S. Permian Basin, including
    Marathon's interest in the Yates Field.  The joint venture, named MKM
    Partners L.P., commenced operations in January 2001 and is accounted for
    under the equity method of accounting.

    10.  The Marathon Group's operations consist of three reportable operating
    segments: 1) Exploration and Production (E&P) - explores for and produces
    crude oil and natural gas on a worldwide basis; 2) Refining, Marketing and
    Transportation (RM&T) - refines, markets and transports crude oil and
    petroleum products, primarily in the Midwest and southeastern United States
    through Marathon Ashland Petroleum LLC (MAP); and 3) Other Energy Related
    Businesses (OERB).  OERB is an aggregation of two segments which fall below
    the quantitative reporting thresholds: 1) Natural Gas and Crude Oil
    Marketing and Transportation - markets and transports its own and third-
    party natural gas and crude oil in the United States; and 2) Power
    Generation - develops, constructs and operates independent electric power
    projects worldwide.  The results of segment operations are as follows:

<PAGE> 54

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    10.  (Continued)

                                                                Total
(In millions)                              E&P    RM&T    OERB Segments
--------------------------------------------------------------------------
THIRD QUARTER 2001
------------------
Revenues and other income:
 Customer                                 $873   $7,212   $413  $8,498
 Intersegment (a)                          123        2     14     139
 Intergroup (a)                              4        -      2       6
 Equity in earnings of unconsolidated
  investees                                 16       14      -      30
 Other                                      (1)      20      3      22
                                        ------   ------ ------  ------
  Total revenues and other income       $1,015   $7,248   $432  $8,695
                                        ======   ====== ======  ======
Segment income                            $259     $575     $6    $840
                                        ======   ====== ======  ======

THIRD QUARTER 2000
------------------
Revenues and other income:
 Customer (b)                           $1,140   $7,518   $492  $9,150
 Intersegment (a)                           74        7     20     101
 Intergroup (a)                              9        -     10      19
 Equity in earnings of unconsolidated
  investees                                 28        5      4      37
 Other                                       5       13      3      21
                                        ------   ------ ------  ------
  Total revenues and other income       $1,256   $7,543   $529  $9,328
                                        ======   ====== ======  ======
Segment income (b)                        $464     $299    $13    $776
                                        ======   ====== ======  ======


(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.

(b)Certain amounts have been reclassified from E&P to OERB to reflect 2001
   classifications.


<PAGE> 55

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    10.  (Continued)


                                                                Total
(In millions)                              E&P    RM&T    OERB Segments
---------------------------------------------------------------------------
NINE MONTHS 2001
----------------
Revenues and other income:
 Customer                               $3,251 $21,490  $1,478  $26,219
 Intersegment (a)                          393      15      58      466
 Intergroup (a)                             19       -       7       26
 Equity in earnings of unconsolidated
  investees                                 52      28      11       91
 Other                                      16      52      10       78
                                        ------  ------  ------   ------
  Total revenues and other income       $3,731 $21,585  $1,564  $26,880
                                        ======  ======  ======   ======
Segment income                          $1,304  $1,693     $38   $3,035
                                        ======  ======  ======   ======

NINE MONTHS 2000
----------------
Revenues and other income:
 Customer (b)                           $3,046 $21,351  $1,150  $25,547
 Intersegment (a)                          262      62      52      376
 Intergroup (a)                             20       -      21       41
 Equity in earnings of unconsolidated
  investees                                 24      15      12       51
 Other                                      15      34       9       58
                                        ------  ------  ------   ------
   Total revenues and other income      $3,367 $21,462  $1,244  $26,073
                                        ======  ======  ======   ======
Segment income (b)                      $1,128    $968     $27   $2,123
                                        ======  ======  ======   ======


(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.

(b)Certain amounts have been reclassified from E&P to OERB to reflect 2001
   classifications.


<PAGE> 56

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        

    10.  (Continued)

    The following schedules reconcile segment amounts to amounts reported in
    the Marathon Group financial statements:

                                                    Third Quarter Ended
                                                      September 30
(In millions)                                        2001      2000
-----------------------------------------------------------------------------
Revenues and other income:
 Revenues and other income of reportable segments  $8,695    $9,328
 Items not allocated to segments:
  Loss related to sale of certain Canadian assets    (221)        -
  Gain on ownership change in MAP                       1         1
 Elimination of intersegment revenues                (139)     (101)
                                                   ------    ------
     Total Group revenues and other income         $8,336    $9,228
                                                   ======    ======

Income:
 Income for reportable segments                      $840      $776
 Items not allocated to segments:
  Gain on ownership change in MAP                       1         1
  Administrative expenses                             (39)      (48)
  Loss related to sale of certain Canadian assets    (221)        -
  Costs related to Proposed Separation                 (1)        -
                                                   ------   -------
     Total Group income from operations              $580      $729
                                                   ======    ======

PAGE> 57

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        

    10.  (Continued)

                                                    Nine Months Ended
                                                      September 30
(In millions)                                        2001      2000
-----------------------------------------------------------------------------
Revenues and other income:
 Revenues and other income of reportable segments $26,880   $26,073
 Items not allocated to segments:
  Loss related to sale of certain
   Canadian assets                                   (221)        -
  Gain (loss) on ownership change in MAP               (5)        9
  Other (a)                                            59        87
 Elimination of intersegment revenues                (466)     (376)
                                                   ------    ------
     Total Group revenues and other income        $26,247   $25,793
                                                   ======    ======

Income:
 Income for reportable segments                    $3,035    $2,123
 Items not allocated to segments:
  Gain (loss) on ownership change in MAP               (5)        9
  Administrative expenses                            (104)     (105)
  Loss related to sale of certain
   Canadian assets                                   (221)        -
  Costs related to Proposed Separation                (17)        -
  Other (a)                                            59        87
                                                   ------    ------
     Total Group income from operations            $2,747    $2,114
                                                   ======    ======

(a)Represents in 2001, gain on offshore lease resolution with the U.S.
   Government and in 2000, gain on disposition of Angus/Stellaria.


    11.  Inventories are carried at the lower of cost or market.  Cost of
    inventories of crude oil and refined products is determined under the last-
    in, first-out (LIFO) method.

                                                     (In millions)
                                                ------------------------
                                                 September 30December 31
                                                     2001      2000
                                                 -----------------------
    Crude oil and natural gas liquids                $708      $701
    Refined products and merchandise                1,159     1,069
    Supplies and sundry items                          90        97
                                                   ------    ------
      Total                                        $1,957    $1,867
                                                   ======    ======


<PAGE> 58

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        
                                        
    12.  At September 30, 2001, and December 31, 2000, income taxes payable
    represents an estimated income tax payable to the U. S. Steel Group. In
    addition, included in deferred credits and other liabilities at September
    30, 2001, and December 31, 2000, respectively, are $43 million and $97
    million of income taxes payable to the U. S. Steel Group.  These amounts
    have been determined in accordance with the tax allocation policy discussed
    in Note 2.

    13.  The provision for income taxes for the third quarter and nine months
    of 2001 included deferred tax charges related to certain prior years' taxes
    of $7 million and $12 million, respectively.

         The income tax provision for the third quarter and nine months of 2000
    included a one-time, noncash deferred tax charge of $235 million as a
    result of the change in amount, timing and nature of expected future
    foreign source income due to the exchange of Marathon's interest in
    Sakhalin Energy Investment Company, Ltd. for other oil and gas producing
    interests.

         Interest and other financial costs in the nine months of 2001 included
    a favorable adjustment of $9 million related to certain prior years' taxes.

    14.  The method of calculating net income (loss) per common share for the
    Marathon Stock and Steel Stock reflects the Board's intent that the
    separately reported earnings and surplus of the Marathon Group and the
    U. S. Steel Group, as determined consistent with the USX Restated
    Certificate of Incorporation, are available for payment of dividends on the
    respective classes of stock, although legally available funds and
    liquidation preferences of these classes of stock do not necessarily
    correspond with these amounts.

         Basic net income per share is based on the weighted average number of
    common shares outstanding.

         Diluted net income per share assumes exercise of stock options,
    provided the effect is not antidilutive.

         See Note 10 of the Notes to USX Consolidated Financial Statements for
    the computation of income per share.

    15.  USX is the subject of, or a party to, a number of pending or
    threatened legal actions, contingencies and commitments relating to the
    Marathon Group involving a variety of matters, including laws and
    regulations relating to the environment.  Certain of these matters are
    discussed below.  The ultimate resolution of these contingencies could,
    individually or in the aggregate, be material to the Marathon Group
    financial statements.  However, management believes that USX will remain a
    viable and competitive enterprise even though it is possible that these
    contingencies could be resolved unfavorably to the Marathon Group.  See
    discussion of Liquidity in USX Consolidated Management's Discussion and
    Analysis of Financial Condition and Results of Operations.


<PAGE> 59

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        

    15.  (Continued)

         The Marathon Group is subject to federal, state, local and foreign
    laws and regulations relating to the environment.  These laws generally
    provide for control of pollutants released into the environment and require
    responsible parties to undertake remediation of hazardous waste disposal
    sites.  Penalties may be imposed for noncompliance.  At September 30, 2001,
    and December 31, 2000, accrued liabilities for remediation totaled $80
    million and $75 million, respectively.  It is not presently possible to
    estimate the ultimate amount of all remediation costs that might be
    incurred or the penalties that may be imposed.  Receivables for recoverable
    costs from certain states, under programs to assist companies in cleanup
    efforts related to underground storage tanks at retail marketing outlets,
    were $59 million at September 30, 2001, and $57 million at December 31,
    2000.

         For a number of years, the Marathon Group has made substantial capital
    expenditures to bring existing facilities into compliance with various laws
    relating to the environment.  In the nine months of 2001 and for the years
    2000 and 1999, such capital expenditures totaled $27 million, $73 million
    and $46 million, respectively.  The Marathon Group anticipates making
    additional such expenditures in the future; however, the exact amounts and
    timing of such expenditures are uncertain because of the continuing
    evolution of specific regulatory requirements.

         On May 11, 2001, MAP entered into a consent decree with the U.S.
    Environmental Protection Agency which commits it to complete certain agreed
    upon environmental capital projects over the next eight years primarily
    aimed at reducing air emissions at its seven refineries.  This consent
    decree was approved by the court on August 28, 2001.  The current estimated
    cost to complete these projects is approximately $270 million.  In
    addition, MAP is required to complete certain agreed upon supplemental
    environmental projects as part of an enforcement action for alleged Clean
    Air Act violations, at a current estimated cost of $8 million.

         At September 30, 2001, and December 31, 2000, accrued liabilities for
    platform abandonment and dismantlement totaled $184 million and $162
    million, respectively.

         At September 30, 2001, a guarantee by USX of the liabilities of an
    affiliated entity totaled $26 million.

         At September 30, 2001, the Marathon Group's pro rata share of
    obligations of LOOP LLC and various pipeline affiliates secured by
    throughput and deficiency agreements totaled $112 million.  Under the
    agreements, the Marathon Group is required to advance funds if the
    affiliates are unable to service debt.  Any such advances are prepayments
    of future transportation charges.

         The Marathon Group's contract commitments to acquire property, plant
    and equipment at September 30, 2001, totaled $368 million compared with
    $457 million at December 31, 2000.


<PAGE> 60

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    16.  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 would become holders
    of United States Steel Corporation Common Stock.  Holders of current USX-
    Marathon Group Common Stock would remain holders of such stock which would
    be renamed Marathon Oil Corporation Common Stock.  The Proposed Separation
    does not contemplate a cash distribution to stockholders.  Each company
    would carry approximately the same assets and liabilities now associated
    with its existing business, except for a value transfer of approximately
    $900 million from Marathon Oil Corporation to United States Steel
    Corporation, intended to maintain United States Steel Corporation as a
    strong, independent company.  The form of the value transfer would be a
    reattribution of USX corporate debt between the USX-Marathon Group and the
    USX-U. S. Steel Group.  The Proposed Separation was approved by
    shareholders at an October 25, 2001 meeting and is subject to 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 Proposed Separation is expected to occur on or about
    December 31, 2001, 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.  Costs related
    to the Proposed Separation include professional fees and other expenses and
    are included in selling, general and administrative expenses.  These costs
    in the third quarter and nine months of 2001 were $1 million and $17
    million, respectively.

    17.  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 did 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.

<PAGE> 61

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The Marathon Group includes Marathon Oil Company ("Marathon") and certain
other subsidiaries of USX Corporation ("USX"), which are engaged in worldwide
exploration and production of crude oil and natural gas; domestic refining,
marketing and transportation of petroleum products primarily through Marathon
Ashland Petroleum ("MAP"), owned 62 percent by Marathon; and other energy
related businesses.  The Management's Discussion and Analysis should be read in
conjunction with the Marathon Group's Financial Statements and Selected Notes to
Financial Statements.  The discussion of Results of Operations should be read in
conjunction with the Supplemental Statistics provided on page 77.

     On October 25, 2001, the stockholders of USX Corporation approved the
separation of the Marathon Group and the U.S. Steel Group into two independent
companies ("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.  The Proposed Separation
is subject to certain conditions and is expected to occur on or about December
31, 2001.  For further discussion, see Management's Discussion and Analysis for
USX Corporation on page 29.

     Certain sections of Management's Discussion and Analysis include forward-
looking statements concerning trends or events potentially affecting the
businesses of the Marathon Group.  These statements typically contain words such
as "anticipates", "believes", "estimates", "expects", "targets", "scheduled" or
similar words indicating that future outcomes are uncertain.  In accordance with
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, these statements are accompanied by cautionary language identifying
important factors, though not necessarily all such factors, that could cause
future outcomes to differ materially from those set forth in forward-looking
statements.  For additional risk factors affecting the businesses of the
Marathon Group, see Supplementary Data - Disclosures About Forward-Looking
Statements in the USX Annual Report on Form 10-K for the year ended December 31,
2000, as amended, and in subsequent Forms 10-Q and Forms 8-K.

<PAGE> 62

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

Results of Operations
---------------------
     Revenues and other income for the third quarter and first nine months of
2001 and 2000 are summarized in the following table:

                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions)                      2001   2000    2001   2000
                                          -----  -----   -----  -----
Exploration & production ("E&P") (a)     $1,015  $1,256 $3,731 $3,367
Refining, marketing & transportation
 ("RM&T")                                 7,248   7,543 21,585 21,462
Other energy related businesses 
 ("OERB") (a) (b)                           432     529  1,564  1,244
                                         ------  ------ ------ ------
Revenues and other income of 
 reportable segments                     $8,695  $9,328$26,880$26,073

Revenues and other income not allocated to segments:
 Gain/(loss) on ownership change in MAP       1       1     (5)     9
 Other (c)                                    -       -     59     87
 Loss related to sale of certain 
  Canadian assets                          (221)      -   (221)     -
 Elimination of intersegment revenues      (139)   (101)  (466)  (376)
                                         ------  ------ ------ ------
  Total Group revenues and other income  $8,336  $9,228$26,247$25,793
                                         ======  ====== ====== ======

Items included in both revenues and costs and expenses, resulting in no effect
on income:

Consumer excise taxes on petroleum
  products and merchandise               $1,152  $1,121 $3,322 $3,268
Matching crude oil and refined product
  buy/sell transactions settled in cash:
   E&P                                     $126    $124   $359   $513
   RM&T                                   1,024     962  2,921  2,868
                                          -----   -----  -----  -----
     Total buy/sell transactions         $1,150  $1,086 $3,280 $3,381
---------
(a)Certain amounts have been reclassified from E&P to OERB to reflect 2001
   classifications.
(b)Includes domestic natural gas and crude oil marketing and transportation,
   and power generation.
(c)Represents a gain on the offshore lease resolution with the U.S. Government
   in 2001 and a gain on the disposition of Angus/Stellaria in 2000.

     E&P segment revenues decreased by $241 million in the third quarter of 2001
from the comparable prior-year period.  This decrease primarily reflected lower
worldwide liquid hydrocarbon and natural gas prices.  For the first nine months
of 2001, revenues increased by $364 million from the prior-year period.  This
increase primarily reflected higher worldwide natural gas prices, gains from
derivative activities, and higher international liquid hydrocarbon volumes,
partially offset by lower worldwide liquid hydrocarbon prices.

<PAGE> 63

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------
     RM&T segment revenues decreased by $295 million in the third quarter of
2001 from the comparable prior-year period.  This decrease primarily reflected
lower refined product prices, partially offset by higher liquid hydrocarbon
sales volumes.  For the first nine months of 2001, revenues increased by
$123 million from the prior-year period.  This increase primarily reflected
higher liquid hydrocarbon sales volumes, partially offset by lower refined
product sales volumes and a decrease in refined product prices.

     OERB segment revenues decreased by $97 million in the third quarter of 2001
from the comparable prior-year period.  This decrease primarily reflected lower
natural gas and crude oil prices and decreased natural gas purchase and resale
activity.  For the first nine months of 2001, revenues increased by $320 million
from the prior-year period.  This increase primarily reflected higher natural
gas prices and increased crude oil purchase and resale activity, partially
offset by a decrease in natural gas purchase and resale activity and lower crude
oil prices.

     Income from operations for the third quarter and first nine months of 2001
and 2000 is summarized in the following table:

                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions)                      2001   2000    2001   2000
                                          -----  -----   -----  -----
E&P
 Domestic (a)                              $210   $304  $1,012   $781
 International                               49    160     292    347
                                         ------ ------  ------ ------
   Income for E&P reportable segment        259    464   1,304  1,128
RM&T                                        575    299   1,693    968
OERB (a)                                      6     13      38     27
                                         ------  ------ ------ ------
     Income for reportable segments        $840   $776  $3,035 $2,123

Items not allocated to segments:
 Administrative expenses (b)               $(39)  $(48)  $(104) $(105)
 Gain on disposition of Angus/Stellaria (c)   -      -       -     87
 Gain on lease resolution with 
   U.S. Government                            -      -      59      -
 Gain/(loss) on ownership change in MAP       1      1      (5)     9
 Loss related to sale of certain
   Canadian assets                         (221)     -     (221)    -
 Costs related to proposed separation (d)    (1)     -      (17)    -
                                         ------ ------   ------ -----
     Total Group income from operations    $580   $729   $2,747$2,114
--------
      (a)  Certain amounts have been reclassified from E&P to OERB to reflect
      2001 classifications.
      (b)  Includes the portion of the Marathon Group's administrative costs
      not charged to the operating segments and the portion of USX corporate
      general and administrative costs allocated to the Marathon Group.
      (c)  Resulted from the disposition of Marathon's 33.34 percent interest
      in the Angus/Stellaria development located in the Gulf of Mexico.
      (d)  Includes professional fees and expenses, and certain other costs
      related to the proposed separation.

<PAGE> 64
                                        
                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Income for reportable segments in the third quarter of 2001 increased by
$64 million from last year's third quarter, due primarily to a higher refining
and wholesale marketing gross margin, partially offset by lower worldwide crude
oil and natural gas prices.  Income for reportable segments in the first nine
months of 2001 increased by $912 million from the first nine months of 2000, due
primarily to a higher refining and wholesale marketing margin and higher
worldwide natural gas prices.

     Worldwide E&P segment income in the third quarter of 2001 decreased by
$205 million from last year's third quarter.  Results in the first nine months
of 2001 increased by $176 million from the same period in 2000.

     Domestic E&P income in the third quarter of 2001 decreased by $94 million
from last year's third quarter.  This decrease was mainly due to lower natural
gas and crude oil prices, partially offset by higher gas volumes resulting from
the acquisition of Pennaco Energy, Inc. ("Pennaco"), lower production taxes, and
reduced exploration expense primarily due to the timing of well expenditures and
lower geophysical contract expenditures.  Results in the first nine months of
2001 increased by $231 million from the same period in 2000.  This increase was
mainly due to higher natural gas prices and volumes, gains from derivative
activities primarily related to Pennaco production, and reduced exploration
expense, partially offset by decreased liquid hydrocarbon prices and increased
depreciation.

     International E&P income in the third quarter of 2001 decreased by
$111 million from last year's third quarter.  This decrease was mainly due to
lower crude oil and natural gas prices, lower natural gas volumes, lower
earnings from equity affiliates resulting from the trade of Marathon's interest
in Sakhalin Energy to Shell in late 2000, and increased depreciation, partially
offset by higher liquid hydrocarbon volumes from consolidated entities.  Results
in the first nine months of 2001 decreased by $55 million from the same period
in 2000.  The decrease was mainly due to lower liquid hydrocarbon prices and
natural gas volumes, increased depreciation and gas transportation charges,
partially offset by higher natural gas prices and liquid hydrocarbon volumes.

     RM&T segment income in the third quarter of 2001 increased by $276 million
from last year's third quarter.  Results in the first nine months of 2001
increased by $725 million from the same period in 2000.  These increases were
mainly due to a higher refining and wholesale marketing gross margin, partially
offset by higher refining and wholesale marketing transportation expense and
lower Speedway SuperAmerica LLC ("SSA") gasoline and distillate sales volumes.

     OERB segment income in the third quarter of 2001, decreased by $7 million
from last year's third quarter.  This decrease was mainly due to the recognition
of an equity affiliate loss, lower margins on natural gas purchase and resale
activity, and unrealized net losses on derivative instruments, partially offset
by higher crude oil purchase and resale activity accompanied by higher margins.
Results in the first nine months of 2001 increased by $11 million from the same
period in 2000.  This increase was primarily due to higher crude oil purchase
and resale activity accompanied by higher margins, higher power generation
income, and higher liquefied natural gas margins.

<PAGE> 65
                                        
                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Net interest and other financial costs in the first nine months of 2001
decreased by $83 million from the comparable 2000 period.  The first nine months
of 2001 included a favorable adjustment of $9 million related to prior years'
taxes.  Excluding this adjustment, the decrease of $74 million was primarily due
to lower average debt levels attributed to the Marathon Group and increased
capitalized interest on RM&T projects.

     The minority interest in income of MAP, which represents Ashland's 38
percent ownership interest, increased by $277 million in the first nine months
of 2001 from the comparable 2000 period, due to higher MAP income.

     The provision for estimated income taxes in the first nine months of 2001
decreased by $102 million from the comparable 2000 period.  The first nine
months of 2001 included deferred tax charges of $12 million related to certain
prior years' taxes.  The first nine months of 2000 included a one-time, noncash
deferred tax charge of $235 million as a result of the change in amount, timing
and nature of expected future foreign source income due to the exchange of
Marathon's interest in Sakhalin Energy for other oil and gas producing
interests.  Excluding these items, the increase of $144 million was primarily
due to an increase in income before taxes.

     The cumulative effect of change in accounting principle of $8 million, net
of a tax benefit of $5 million, in the first nine months of 2001 was an
unfavorable transition adjustment related to adopting SFAS No. 133.  For further
discussion, see Notes 3 and 4 to the Marathon Group Financial Statements.

     Net income for the third quarter and first nine months increased by
$72 million and $533 million, respectively, in 2001 from 2000, primarily
reflecting the factors discussed above.

Balance Sheet
-------------
     Current assets decreased $188 million from year-end 2000, primarily due to
a decrease in assets held for sale and receivables, partially offset by an
increase in cash and cash equivalents, and inventories.  The decrease in assets
held for sale primarily resulted from the contribution of the Yates field assets
to the MKM Partners L.P. joint venture, partially offset by certain Canadian
assets and SSA stores held for sale at September 30, 2001.  The decrease in
receivables was mainly due to a decrease in accounts receivable related to lower
commodity prices, partially offset by an increase in other receivables related
to derivative activity.  The increase in cash and cash equivalents primarily
reflects increased cash provided from operating activities.  The increase in
inventories primarily resulted from an increase in refined products and crude
oil inventories.

     Current liabilities decreased $279 million from year-end 2000, primarily
due to a decrease in accounts payable due to lower commodity prices, partially
offset by an increase in accrued taxes because of higher income.

<PAGE> 66
                                        
                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Investments and long-term receivables increased $705 million from year-end
2000 primarily due to the contribution of assets to the MKM Partners L.P. and
Pilot Travel Centers LLC ("PTC") joint ventures.

     Total long-term debt and notes payable at September 30, 2001 was $1,609, a
decrease of $556 million from year-end 2000.  This decrease in debt attributed
to the Marathon Group was mainly due to cash flow provided from operating
activities in excess of cash used for capital expenditures, the acquisition of
Pennaco, dividend payments and distributions to the minority shareholder in MAP.
Most of the debt is a direct obligation of, or is guaranteed by, USX.

     Minority interest in Marathon Ashland Petroleum LLC increased by
$189 million from year-end 2000 due to Ashland's share of recorded MAP income
exceeding cash distributions to Ashland.

     Stockholders' equity increased $1,131 million from year-end 2000, mainly
reflecting increased net income, partially offset by dividends declared.

Cash Flows
----------
     Net cash provided from operating activities was $2,713 million in the first
nine months of 2001, compared with $1,751 million in the first nine months of
2000.  The $962 million increase mainly reflected the favorable effects of
improved net income (excluding noncash items) and favorable working capital
changes, excluding the intergroup tax payment to the U.S. Steel Group made in
accordance with the group tax allocation policy.  This payment was $379 million
in the first nine months of 2001 compared to $97 million in the first nine
months of 2000.  For additional information on the group tax allocation policy,
see Note 2 to the Marathon Group Financial Statements.

     Capital expenditures in the first nine months of 2001 totaled
$1,020 million, compared with $878 million in the comparable 2000 period.  For
additional information regarding capital expenditures, refer to the Supplemental
Statistics on page 77.

     Contract commitments for property, plant and equipment acquisitions and
long-term investments at September 30, 2001 totaled $368 million compared with
$457 million at December 31, 2000.  In addition, MAP has entered into a New
Source Review global consent decree with the U.S. Environmental Protection
Agency ("EPA") which commits it to spend approximately $270 million over the
next eight years for future environmental projects.

     The acquisition of Pennaco Energy, Inc. included net cash payments of
$506 million.  For further discussion of Pennaco, see Note 8 to the Marathon
Group Financial Statements.

     Cash from disposal of assets was $181 million in the first nine months of
2001, compared with $252 million in the comparable 2000 period.  Proceeds in
2001 were mainly from the sale of various Canadian oil fields, SSA stores, and
various domestic producing properties.  Proceeds in 2000 were mainly from the
disposition of Marathon's 33.34 percent interest in the Angus/Stellaria
development in the Gulf of Mexico and other domestic production properties.

<PAGE> 67

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The net change in restricted cash was a net withdrawal of $14 million in
the first nine months of 2001, compared to a net withdrawal of $11 million in
the comparable 2000 period.  Restricted cash in both periods primarily reflected
the net effects of cash deposited and withdrawn from domestic production
property dispositions and acquisitions.

     Net investments in affiliates was $1 million in the first nine months of
2001, compared with $58 million in the comparable 2000 period.  Cash outflows in
2000 mainly reflected funding provided to equity affiliates for capital
projects, primarily the Sakhalin II project in Russia.

     Financial obligations, which consist of the Marathon Group's portion of USX
debt and preferred stock of a subsidiary attributed to both groups, as well as
debt specifically attributed to the Marathon Group, decreased by $556 million in
the first nine months of 2001.  Financial obligations decreased primarily
because cash from operating activities and asset sales exceeded capital
expenditures, acquisitions and dividend payments.  For further details, see
Management's Discussion and Analysis of USX Consolidated Financial Condition,
Cash Flows and Liquidity.

     Distributions to minority shareholder of MAP were $450 million in the first
nine months of 2001, compared with $212 million in the comparable 2000 period.

Derivative Instruments
----------------------
     See Quantitative and Qualitative Disclosure About Market Risk for
discussion of derivative instruments and associated market risk for the Marathon
Group.

Liquidity
---------
     On November 2, 2001, Marathon announced the signing of a Purchase and Sale
Agreement with CMS Energy to acquire all of its upstream and downstream
interests in  Equatorial Guinea, West Africa for a total cash consideration of
approximately $993 million.  The transaction is expected to be completed in 
January 2002 and is expected to be initally funded using a combination of 
available cash, revolving credit facilities, and other short-term liquidity
facilities.

     On November 7, 2001, United States Steel LLC commenced offers to exchange
its 10% Senior Quarterly Income Debt Securities due 2031 ("SQUIDS"), up to an
aggregate of $365 million, for three securities, including the 8.75% Cumulative
Monthly Income Preferred Shares, Series A which are partially attributed to the
Marathon Group.

     For additional discussion of USX's liquidity and capital resources and
details of the exchange offer, see Management's Discussion and Analysis of USX
Consolidated Financial Condition, Cash Flows and Liquidity.

Environmental Matters, Contingencies and Commitments
----------------------------------------------------
     The Marathon Group has incurred and will continue to incur substantial
capital, operating and maintenance, and remediation expenditures as a result of
environmental laws and regulations.  To the extent these expenditures, as with
all costs, are not ultimately reflected in the prices of the Marathon Group's
products

<PAGE> 68

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

and services, operating results will be adversely affected.  The Marathon Group
believes that substantially all of its competitors are subject to similar
environmental laws and regulations.  However, the specific impact on each
competitor may vary depending on a number of factors, including the age and
location of its operating facilities, marketing areas, production processes and
whether or not it is engaged in the petrochemical business, power business or
the marine transportation of crude oil and refined products.

     USX has been notified that it is a potentially responsible party ("PRP") at
13 waste sites related to the Marathon Group under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") as of
September 30, 2001.  In addition, there are 3 sites related to the Marathon
Group where USX has received information requests or other indications that USX
may be a PRP under CERCLA but where sufficient information is not presently
available to confirm the existence of liability.  There are also 115 additional
sites, excluding retail marketing outlets, related to the Marathon Group where
remediation is being sought under other environmental statutes, both federal and
state, or where private parties are seeking remediation through discussions or
litigation.  Of these sites, 13 were associated with properties conveyed to MAP
by Ashland for which Ashland has retained liability for substantially all costs
associated with remediation.  At many of these sites, USX is one of a number of
parties involved and the total cost of remediation, as well as USX's share
thereof, is frequently dependent upon the outcome of investigations and remedial
studies.  The Marathon Group accrues for environmental remediation activities
when the responsibility to remediate is probable and the amount of associated
costs is reasonably determinable.  As environmental remediation matters proceed
toward ultimate resolution or as additional remediation obligations arise,
charges in excess of those previously accrued may be required.

     New Tier II gasoline rules, which were finalized by the EPA in February
2000, and the diesel fuel rules, which were finalized in January 2001, require
substantially reduced sulfur levels.  The combined capital cost to achieve
compliance with the gasoline and diesel regulations could amount to
approximately $700 million between 2002 and 2006.  This is a forward-looking
statement and can only be a broad-based estimate due to the ongoing evolution of
regulatory requirements.  Some factors (among others) that could potentially
affect gasoline and diesel fuel compliance costs include obtaining the necessary
construction and environmental permits, operating and logistical considerations,
and unforeseen hazards such as weather conditions.
     
     In May 2001, Marathon and MAP settled in a consent decree EPA allegations
that the Robinson refinery did not qualify for an exemption under the National
Emission Standards for Benzene Waste Operations pursuant to the Clean Air Act
("CAA").  The government had alleged in a federal court lawsuit that the
refinery's Total Annual Benzene releases exceeded the limitation of 10 megagrams
per year, and as a result, the refinery was in violation of the benzene waste
emission control, record keeping, and reporting requirements.  The consent
decree was approved by the court on July 26, 2001 and requires Marathon and MAP
to pay a combined $1.6 million civil penalty, perform $125,000 in supplemental
environmental projects, as part of an enforcement action for alleged CAA
violations, and install various controls and other improvements.

<PAGE> 69

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     In 1998, the EPA conducted multi-media inspections of MAP's Detroit and
Robinson refineries, covering compliance with the CAA, the Clean Water Act,
reporting obligations under the Emergency Planning and Community Right to Know
Act, CERCLA and the handling of process waste.  The EPA served a number of
Notices of Violation ("NOV") and Findings of Violation as a result of these
inspections, but these allegations were resolved as part of the New Source
Review global consent decree which MAP agreed to on May 11, 2001.  MAP's
settlement with the EPA includes all of MAP's refineries and commits MAP to
specific control technologies and implementation schedules for approximately
$270 million in environmental capital expenditures and improvements to MAP's
refineries over approximately an eight year period that are consistent with
MAP's current capital spending plans.  It also commits MAP to payment of an
aggregate civil penalty in the amount of $3.8 million and the performance of
about $8 million in supplemental environmental projects, as part of an
enforcement action for alleged CAA violations.  MAP believes that this
settlement will provide MAP with increased permitting and operating flexibility
while achieving significant emission reductions.  The court approved this
consent decree on August 28, 2001.

     In 2000, the Kentucky Natural Resources and Environmental Cabinet sent
Marathon Ashland Pipe Line LLC a NOV seeking a civil penalty associated with a
pipeline spill earlier that year in Winchester, Kentucky.  MAP has settled this
NOV in concept for a $170,000 penalty and reimbursement of past response costs
up to $131,000.  A final administrative order resolving this matter is expected
in fourth quarter 2001.
     
     USX is the subject of, or a party to, a number of pending or threatened
legal actions, contingencies and commitments relating to the Marathon Group
involving a variety of matters, including laws and regulations relating to the
environment.  See Note 15 to the Marathon Group Financial Statements for a
discussion of certain of these matters.  The ultimate resolution of these
contingencies could, individually or in the aggregate, be material to the
Marathon Group Financial Statements.  However, management believes that USX will
remain a viable and competitive enterprise even though it is possible that these
contingencies could be resolved unfavorably to the Marathon Group.  See
Management's Discussion and Analysis of USX Consolidated Financial Condition,
Cash Flows and Liquidity.

Outlook
-------
     The outlook regarding the Marathon Group's upstream revenues and income is
largely dependent upon future prices and volumes of liquid hydrocarbons and
natural gas.  Prices have historically been volatile and have frequently been
affected by unpredictable changes in supply and demand resulting from
fluctuations in worldwide economic activity and political developments in the
world's major oil and gas producing and consuming areas.  Any significant
decline in prices could have a material adverse effect on the Marathon Group's
results of operations.  A prolonged decline in such prices could also adversely
affect the quantity of crude oil and natural gas reserves that can be
economically produced and the amount of capital available for exploration and
development.

<PAGE> 70

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Marathon's Gulf of Mexico exploration drilling program was delayed due to
the cancellation of the contract for the Cajun Express rig.  The two wells
expected to be drilled with the Cajun Express rig have been delayed until
December 2001 and January 2002.  However, Marathon has been able to participate
in or accelerate the drilling of other prospects.  On October 31, 2001, Marathon
announced an oil discovery on its Ozona Deep prospect.  Located in 3,280 feet of
water in Garden Banks Block 515, the well was drilled to a total measured depth
of 26,352 feet.  Approximately 345 feet of net pay was encountered in two
primary intervals.  Marathon is the operator and holds a 68 percent working
interest in this discovery.  The Timber Wolf (Mississippi Canyon 555) prospect
is currently drilling and is expected to reach total depth in fourth quarter
2001.  The Paris Carver (Green Canyon 601) prospect is expected to spud late in
fourth quarter 2001 with drilling continuing into 2002.  Marathon's
international drilling program is proceeding on schedule with a shallow-water
Nova Scotia well currently drilling, and with Angola and Nova Scotia deepwater
wells expected to spud in fourth quarter 2001.

     Marathon's fourth quarter production is expected to be approximately 415 to
420 thousand barrels of oil equivalent per day.  Full year 2001 production is
expected to be approximately 420 thousand barrels of oil equivalent per day.
For 2002, Marathon's production is expected to average between 430 and 435
thousand barrels of oil equivalent per day.

     On August 23, 2001, Marathon announced plans to develop a strategic
alliance with Yukos Oil Company, the second largest Russian oil company.  As
part of the alliance, a joint business development group will be formed to
evaluate international investment opportunities.

     On August 29, 2001, Marathon announced agreements with Statoil, Norsk Hydro
and TotalFinaElf to acquire varied interests in five licenses in the Norwegian
Sector of the North Sea.  The portfolio additions include several undeveloped
discoveries close to Marathon's existing infrastructure positions in the Heimdal
and Brae areas of the North Sea.  The transactions are subject to necessary
approvals from the Norwegian authorities.

     On November 2, 2001, Marathon announced it signed a Purchase and Sale
Agreement with CMS Energy to acquire all of its upstream and downstream
interests in Equatorial Guinea, West Africa.  For a total cash consideration of
$993 million, Marathon will acquire:

     - a 52.4 percent interest in, and operatorship of, the offshore Alba Block,
       which contains the currently producing Alba gas field as well as 
       undeveloped oil and gas discoveries, and several undrilled exploration 
       prospects;
     - a 37.6 percent interest in adjacent offshore Block D;
     - a 52.4 percent interest in an onshore condensate separation facility;
     - a 45 percent interest in a joint venture onshore methanol production 
       plant;
     - a 43.2 percent interest in an onshore liquefied petroleum gas processing
       plant.

     This transaction is subject to appropriate government approvals and is
expected to close in early January 2002.

<PAGE> 71

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The above discussion includes forward-looking statements with respect to
the exploration drilling program, timing and levels of Marathon's worldwide
liquid hydrocarbon and natural gas production, the planned alliance with Yukos
Oil Company, the plan to acquire interests in licenses in the Norwegian sector
of the North Sea, and the plans to acquire CMS Energy interests in Equatorial
Guinea, West Africa.  Some factors that could potentially affect the exploration
drilling program and worldwide liquid hydrocarbon and natural gas production
include acts of war or terrorist acts and the governmental or military response
thereto, pricing, supply and demand for petroleum products, amount of capital
available for exploration and development, occurrence of
acquisitions/dispositions of oil and gas properties, regulatory constraints,
timing of commencing production from new wells, drilling rig availability and
other geological, operating and economic considerations.  Some factors that
affect the planned alliance with Yukos Oil Company include the execution and
closing of definitive agreements, and the receipt of government approvals.  The
realization of anticipated benefits is dependent upon the effectiveness of the
mutual alliance and future economic conditions.  Some factors that could affect
the plan to acquire interests in licenses in the Norwegian sector of the North
Sea include the execution and closing of definitive agreements, and the receipt
of necessary approvals from the Norwegian authorities.  Some factors that could
affect the plans to acquire CMS Energy interests include the execution and
closing of definitive agreements, and the receipt of necessary approvals from
the Equatorial Guinea government.

     Downstream income of the Marathon Group is largely dependent upon the
refining and wholesale marketing margin for refined products and the retail
gross margin for gasoline and distillates.  The refining and wholesale marketing
margin reflects the difference between the wholesale selling prices of refined
products and the cost of raw materials refined, purchased product costs and
manufacturing expenses.  Refining and wholesale marketing margins have been
historically volatile and vary with the level of economic activity in the
various marketing areas, the regulatory climate, the seasonal pattern of certain
product sales, crude oil costs, manufacturing costs, the available supply of
crude oil and refined products, and logistical constraints.  The retail gross
margin for gasoline and distillates reflects the difference between the retail
selling prices of these products and their wholesale cost.  Retail gasoline and
distillate margins have also been historically volatile, but tend to be counter
cyclical to the refining and wholesale marketing margin.  Factors affecting the
retail gasoline and distillate margin include seasonal demand fluctuations, the
available wholesale supply, the level of economic activity in the marketing
areas and weather situations which impact driving conditions.

     In June 2001, MAP acquired an interest in approximately 50 convenience
stores located in Indiana and Michigan from Welsh, Inc.  The acquisition of
these retail outlets increases MAP's presence in these markets and should
provide more than 80 million gallons of new annual gasoline sales.

     On September 1, 2001, PTC, a joint venture owned 50 percent each by MAP and
Pilot Corporation, began operations.  MAP, through its wholly owned retail unit
SSA, contributed 94 travel centers and other assets in the formation of PTC.
PTC is now the largest travel center network in the United States with more than
235 locations.  The new venture, based in Knoxville, Tennessee, has
approximately 11,000 employees.

<PAGE> 72

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     In early October 2001, the Garyville, Louisiana refinery coker achieved
mechanical completion and is currently operating at more than 80 percent of
capacity.  The coker is anticipated to be at full production during fourth
quarter 2001.  This new unit will allow the Garyville refinery to use heavier,
lower cost crude and eliminate the production of heavy fuel oil.  The total cost
of this major improvement program is approximately $280 million.

     During third quarter 2001, SSA entered into an agreement to sell all 32 of
its retail locations in Tennessee.  A majority of these locations are expected
to be branded as Marathon retail outlets by the purchaser.  This sales
transaction is expected to close in the fourth quarter of 2001.

     MAP is also working to improve its logistics network and has been
designated operator of the Centennial Pipeline, owned jointly by Panhandle
Eastern Pipe Line Company, a subsidiary of CMS Energy Corporation, MAP, and TE
Products Pipe Line Company, Limited Partnership.  All of the permits and rights-
of-way have been obtained for the new pipeline, which will connect the Gulf
Coast refiners with the Midwest market.  The Centennial Pipeline system is
expected to be operational in the first quarter of 2002.

     A MAP subsidiary, Ohio River Pipe Line LLC ("ORPL"), plans to build a
pipeline from Kenova, West Virginia to Columbus, Ohio.  ORPL is a common carrier
pipeline company and the pipeline will be an interstate common carrier pipeline.
The pipeline will be named Cardinal Products Pipe Line and is expected to
initially move about 50,000 barrels per day of refined petroleum into the
central Ohio region.  ORPL has secured over 99 percent of the rights-of-way
required to build the pipeline and expects to conclude remaining rights-of-way
negotiations in the fourth quarter of 2001.  Applications for the remaining
construction permits have been filed.  Construction is currently planned for
summer 2002 pending receipt of permits, with start-up of the pipeline to follow
in late fourth quarter 2002.
     
     On October 25, 2001, the stockholders of USX Corporation approved the
separation of the Marathon Group and the U.S. Steel Group into two independent
companies.  The Proposed Separation is expected to occur on or about 
December 31, 2001 and is subject to certain conditions including
receipt of a favorable ruling from the Internal Revenue Service as to the tax-
free status of the Proposed Separation.  For further discussion, see
Management's Discussion and Analysis for USX Corporation on page 29.

<PAGE> 73

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The above discussion includes forward-looking statements with respect to
the full operation of the Garyville coker, SSA store disposition, Centennial and
Cardinal Products Pipe Line systems and the Proposed Separation.  Some factors
which could impact the Garyville coker project include unanticipated operational
issues.  Some factors which could impact the disposition of stores in Tennessee
include government approvals, regulatory constraints, consent of third parties
and satisfaction of customary closing conditions.  Some factors which could
impact the Centennial Pipeline system include delivery of equipment and
materials, contractor performance and unforeseen hazards such as weather
conditions.  Some factors which could impact the Cardinal Products Pipe Line
include obtaining the necessary permits and remaining rights-of-way, and
completion of construction. Some factors that could affect the Proposed
Separation include receipt of a favorable tax ruling from the IRS on the tax-
free nature of the transaction, completion of necessary financing arrangements,
receipt of necessary regulatory and third party consents, any materially adverse
changes in business conditions for the energy and/or steel businesses or other
unfavorable circumstances.  These factors (among others) could cause actual
results to differ materially from those set forth in the forward-looking
statements.


<PAGE> 74

                        MARATHON GROUP OF USX CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                       ----------------------------------

Commodity Price Risk and Related Risks
--------------------------------------
     Sensitivity analysis of the incremental effects on income before income
taxes of hypothetical 10% and 25% changes in commodity prices for open
derivative commodity instruments as of September 30, 2001, are provided in the
following table(a):

                                            Incremental Decrease in
                                           Income Before Income Taxes
                                            Assuming a Hypothetical
                                                Price Change of:

(Dollars in millions)                             10%     25%
-----------------------------------------------------------------------------
Commodity-Based Derivative Instruments
Marathon Group(b)(c)
    Crude oil (f)(g)                             $8.8   $20.7   (d)
    Natural gas (f)(g)                            8.2    21.2   (d)
    Refined products (f)(g)                       0.7     4.6   (d)

      (a)  With the adoption of SFAS No. 133, the definition of a derivative
      instrument has been expanded to include certain fixed price physical
      commodity contracts.  Such instruments are included in the above table.
      Amounts reflect the estimated incremental decrease in income before
      income taxes of hypothetical 10% and 25% changes in closing commodity
      prices for each open contract position at September 30, 2001. Management
      evaluates the portfolios of derivative commodity instruments on an
      ongoing basis and adjusts strategies to reflect anticipated market
      conditions, changes in risk profiles and overall business objectives.
      Changes to the portfolios subsequent to September 30, 2001, may cause
      future income before income tax effects to differ from those presented in
      the table.
      (b)  The number of net open contracts varied throughout third quarter
      2001, from a low of 19,040 contracts at July 18, to a high of 39,868
      contracts at September 26, and averaged 24,900 for the quarter.  The
      derivative commodity instruments used and hedging positions taken also
      varied throughout third quarter 2001, and will continue to vary in the
      future.  Because of these variations in the composition of the portfolio
      over time, the number of open contracts, by itself, cannot be used to
      predict future income effects.
      (c)  The calculation of sensitivity amounts for basis swaps assumes that
      the physical and paper indices are perfectly correlated.  Gains and
      losses on options are based on changes in intrinsic value only.
      (d)  Price increase.
      (e)  Price decrease.
      (f)  The direction of the price change used in calculating the
      sensitivity amount for each commodity reflects that which would result in
      the largest incremental decrease in income before income taxes when
      applied to the derivative commodity instruments used to hedge that
      commodity.
     (g)  Adjusted to reflect Marathon's 62 percent ownership of MAP.

<PAGE> 75
                                        
                        MARATHON GROUP OF USX CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                        ---------------------------------

Interest Rate Risk
------------------
     USX is subject to the effects of interest rate fluctuations on certain of
its non-derivative financial instruments.  A sensitivity analysis of the
projected incremental effect of a hypothetical 10% decrease in September 30,
2001, interest rates on the fair value of the Marathon Group's specifically
attributed non-derivative financial instruments and the Marathon Group's portion
of USX's non-derivative financial instruments attributed to both groups, is
provided in the following table:

(Dollars in millions)
------------------------------------------------------------------------------
As of September 30, 2001
                                                           Incremental
                                                           Increase in
Non-Derivative                                       Fair     Fair
Financial Instruments(a)                             Value   Value(b)
------------------------------------------------------------------------------
Financial assets:
 Investments and
   long-term receivables                             $181        $-
------------------------------------------------------------------------------
Financial liabilities:
 Long-term debt (c)(d)                             $1,754       $76
 Preferred stock of
   subsidiary                                         180        15
                                                    ------    ------
       Total liabilities                           $1,934       $91
------------------------------------------------------------------------------
(a)Fair  values  of  cash  and  cash equivalents,  receivables,  notes  payable,
   accounts  payable  and accrued interest approximate carrying  value  and  are
   relatively  insensitive to changes in interest rates due  to  the  short-term
   maturity  of  the  instruments. Accordingly, these instruments  are  excluded
   from the table.
(b)Reflects, by class of financial instrument, the estimated incremental  effect
   of  a  hypothetical 10% decrease in interest rates at September 30, 2001,  on
   the  fair  value of USX's non-derivative financial instruments. For financial
   liabilities,  this assumes a 10% decrease in the weighted  average  yield  to
   maturity of USX's long-term debt at September 30, 2001.
(c)Includes amounts due within one year.
(d)Fair  value was based on market prices where available, or current  borrowing
   rates for financings with similar terms and maturities.


<PAGE> 76

                        MARATHON GROUP OF USX CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                       ----------------------------------

Foreign Currency Exchange Rate Risk
-----------------------------------
     USX is subject to the risk of price fluctuations related to anticipated
revenues and operating costs, firm commitments for capital expenditures and
existing assets or liabilities denominated in currencies other than U.S.
dollars.  USX has not generally used derivative instruments to manage this risk.
However, USX has made limited use of forward currency contracts to manage
exposure to certain currency price fluctuations.  At September 30, 2001, USX had
open Canadian dollar forward purchase contracts with a total carrying value of
approximately $3 million.  A 10% increase in the Canadian dollar to U.S. dollar
forward rate would result in an immaterial charge to income.  The entire amount
of these contracts is attributed to the Marathon Group.

Equity Price Risk
-----------------
     As of September 30, 2001, the Marathon Group had no material exposure to
equity price risk.

Safe Harbor
-----------
     The Marathon Group's Quantitative and Qualitative Disclosures About Market
Risk include forward-looking statements with respect to management's opinion
about risks associated with the Marathon Group's use of derivative instruments.
These statements are based on certain assumptions with respect to market prices
and industry supply and demand for crude oil, natural gas and refined products.
To the extent that these assumptions prove to be inaccurate, future outcomes
with respect to the Marathon Group's derivative usage may differ materially from
those discussed in the forward-looking statements.

<PAGE> 77
                                        
                        MARATHON GROUP OF USX CORPORATION
                       SUPPLEMENTAL STATISTICS (Unaudited)
                    ----------------------------------------
                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions)                      2001   2000    2001   2000
------------------------------------------------------------------------------

INCOME (LOSS) FROM OPERATIONS
 Exploration & Production ("E&P")
   Domestic (a)                            $210   $304  $1,012   $781
   International                             49    160     292    347
                                          -----  -----   -----  -----
     Income For E&P Reportable Segment      259    464   1,304  1,128
 Refining, Marketing & Transportation       575    299   1,693    968
 Other Energy Related Businesses (a) (b)      6     13      38     27
                                          -----  -----   -----  -----
       Income For Reportable Segments      $840   $776  $3,035 $2,123

Items Not Allocated To Segments:
 Administrative Expenses                   $(39)  $(48)  $(104) $(105)
 Gain on disposition of Angus/Stellaria       -      -       -     87
 Gain on lease resolution with 
   U.S. Government                            -      -      59      -
 Gain/(loss) on ownership change - MAP        1      1      (5)     9
 Loss related to sale of certain
   Canadian assets                         (221)     -    (221)     -
 Costs related to proposed separation (c)    (1)     -     (17)     -
                                         ------ ------  ------ ------
    Marathon Group Income From Operations  $580   $729  $2,747 $2,114

CAPITAL EXPENDITURES
 Exploration & Production                  $219   $153    $593   $553
 Refining, Marketing & Transportation       153    149     365    315
 Other(d)                                    20      -      62     10
                                          -----  -----   -----  -----
    Total                                  $392   $302  $1,020   $878

EXPLORATION EXPENSE
 Domestic                                    $9    $33     $34    $84
 International                               11     18      35     58
                                          -----  -----   -----  -----
    Total                                   $20    $51     $69   $142

OPERATING STATISTICS

Net Liquid Hydrocarbon Production(e):
 United States                            124.1  129.4   124.9  131.7
 Europe                                    52.3   26.3    47.0   28.2
 Other International                       23.8   42.8    30.0   37.3
                                         ------ ------  ------ ------
    Total Consolidated                    200.2  198.5   201.9  197.2
 Domestic Equity Investee 
   (MKM Partners L.P.)                      9.0      -     9.5      -
 International Equity Investees (CLAM &
   Sakhalin Energy)(f)                      0.1   24.4     0.1    9.1
                                         ------ ------  ------ ------
     Worldwide                            209.3  222.9   211.5  206.3

Net Natural Gas Production(g):
 United States                            751.8  715.5   771.4  726.1
 Europe(h)                                301.4  306.2   322.0  333.1
 Other International                      119.1  144.8   125.4  144.8
                                         ------ ------  ------  -----
     Total Consolidated                 1,172.31,166.5 1,218.81,204.0
 International Equity Investee (CLAM)      26.4   21.4    31.6   28.0
                                        ------- ---------------------
     Worldwide                          1,198.71,187.9 1,250.41,232.0

Average Equity Sales Prices(i)(j):
 Liquid Hydrocarbons (per Bbl)
   Domestic                              $21.33 $26.58  $21.80 $24.85
   International                          24.19  28.84   24.95  26.87
 Natural Gas (per Mcf)
   Domestic                               $2.49  $3.61   $3.98  $2.90
   International                           2.30   2.59    3.07   2.47

<PAGE> 78

                        MARATHON GROUP OF USX CORPORATION
                       SUPPLEMENTAL STATISTICS (Unaudited)
                    ----------------------------------------
                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
                                           2001   2000    2001   2000
                                       --------------------------------
OPERATING STATISTICS (continued)

MAP:

Crude Oil Refined(e)                      961.1   928.4  930.0  915.0
Consolidated Refined Products Sold(e)(n) 1343.8  1350.0 1300.3 1304.6
   Matching buy/sell volumes included in refined
   products sold(e)                        43.0    43.5   43.8   55.3
Refining and Wholesale Marketing
   Margin(k)(l)                         $0.1314 $0.0670$0.1347$0.0753
Number of SSA retail outlets(o)           2,145   2,288      -      -
SSA Gasoline and Distillate Sales(m)(o)     916     965  2,657  2,802
SSA Gasoline and Distillate 
   Gross Margin(k)(o)                   $0.1331 $0.1289$0.1230$0.1287
SSA Merchandise Sales(o)                   $607    $588 $1,669 $1,643
SSA Merchandise Gross Margin(o)            $137    $136   $387   $387
--------------
      (a)  Certain amounts have been reclassified from E&P to OERB to reflect
      2001 classifications.
      (b)  Includes domestic natural gas and crude oil marketing and
      transportation, and power generation.
      (c)  Includes professional fees and expenses, and certain other costs
      related to the proposed separation.
      (d)  Includes other energy related businesses and corporate capital
      expenditures.
      (e)  Thousands of barrels per day
      (f)  In 2001, equity investee is CLAM and in 2000, equity investees are
      CLAM and Sakhalin Energy.
      (g)  Millions of cubic feet per day
      (h)  Includes gas acquired for injection and subsequent resale of 6.8,
      9.3, 8.3 and 11.7 mmcfd in the third quarter and nine month year-to-date
      2001 and 2000, respectively.
      (i)  Prices exclude gains and losses from hedging activities.
      (j)  Prices exclude equity affiliates and purchase/resale gas.
      (k)  Per gallon
      (l)  Sales revenue less cost of refinery inputs, purchased products and
      manufacturing expenses, including depreciation.
      (m)  Millions of gallons
      (n)  Total average daily volume of all refined product sales to MAP's
      wholesale, branded and retail (SSA) customers.
      (o)  Excludes travel centers contributed to Pilot Travel Center LLC.
      Periods prior to September 1, 2001, have been restated.


<PAGE> 79

Part I - Financial Information (Continued):

     C.   U. S. Steel Group

                      U. S. STEEL GROUP OF USX CORPORATION
                       STATEMENT OF OPERATIONS (Unaudited)
                      ------------------------------------
                                        
                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions, except per 
    share amounts)                         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



Selected notes to financial statements appear on pages 82-92.

<PAGE> 80

                      U. S. STEEL GROUP OF USX CORPORATION
                            BALANCE SHEET (Unaudited)
                      ------------------------------------
                                        
                                                 September 30December 31
(Dollars in millions)                                2001      2000
-----------------------------------------------------------------------------
ASSETS

Current assets:
 Cash and cash equivalents                           $475      $219
 Receivables, less allowance for doubtful
  accounts of $131 and $57                            656       627
 Receivables subject to a security interest           350       350
 Income taxes receivable                              379       364
 Inventories                                          950       946
 Deferred income tax benefits                         185       201
 Other current assets                                   6        10
                                                   ------    ------
     Total current assets                           3,001     2,717

Investments and long-term receivables,
 less reserves of $39 and $38                         392       536
Property, plant and equipment, less accumulated
 depreciation, depletion and amortization of
 $6,775 and $6,531                                  3,089     2,739
Prepaid pensions                                    2,740     2,672
Other noncurrent assets                               115        47
                                                   ------    ------
     Total assets                                  $9,337    $8,711
                                                   ======    ======
LIABILITIES

Current liabilities:
 Notes payable                                         $-       $70
 Accounts payable                                     801       760
 Payroll and benefits payable                         228       202
 Accrued taxes                                        259       173
 Accrued interest                                      41        47
 Long-term debt due within one year                   136       139
                                                   ------    ------
     Total current liabilities                      1,465     1,391

Long-term debt, less unamortized discount           2,622     2,236
Deferred income taxes                                 753       666
Employee benefits                                   1,936     1,767
Deferred credits and other liabilities                483       483
Preferred stock of subsidiary                          66        66
USX obligated mandatorily redeemable convertible preferred
 securities of a subsidiary trust holding solely junior
 subordinated convertible debentures of USX           183       183

STOCKHOLDERS' EQUITY
Preferred stock                                         2         2
Common stockholders' equity                         1,827     1,917
                                                   ------    ------
     Total stockholders' equity                     1,829     1,919
                                                   ------    ------
     Total liabilities and stockholders' equity    $9,337    $8,711
                                                   ======    ======

Selected notes to financial statements appear on pages 82-92.

<PAGE> 81

                      U. S. STEEL GROUP OF USX CORPORATION
                       STATEMENT OF CASH FLOWS (Unaudited)
                      ------------------------------------
                                        
                                                   Nine Months Ended
                                                      September 30
(Dollars in millions)                                2001      2000
---------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

OPERATING ACTIVITIES:
Net income (loss)                                    $(44)     $118
Adjustments to reconcile to net cash provided
 from operating activities:
 Depreciation, depletion and amortization             246       222
 Pensions and other postretirement benefits           (59)     (234)
 Deferred income taxes                                 84       208
 Net gains on disposal of assets                      (20)      (34)
 Changes in:
     Current receivables                                -       (33)
     Inventories                                       23      (113)
     Current accounts payable and accrued expenses     41      (138)
 All other - net                                      (92)        9
                                                   ------    ------
     Net cash provided from operating activities      179         5
                                                   ------    ------
INVESTING ACTIVITIES:
Capital expenditures                                 (197)     (133)
Disposal of assets                                     17        17
Restricted cash - withdrawals                           5         3
                - deposits                             (2)       (2)
Investees - investments                                (3)      (18)
          - loans and advances                          -        (8)
All other - net                                        10         4
                                                   ------    ------
     Net cash used in investing activities           (170)     (137)
                                                   ------    ------
FINANCING ACTIVITIES:
Increase in U. S. Steel Group's portion of USX
 consolidated debt                                    300       206
Specifically attributed debt repayments                (6)       (6)
Preferred stock repurchased                             -       (12)
Dividends paid                                        (46)      (72)
                                                   ------    ------
     Net cash provided from financing activities      248       116
                                                   ------    ------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                (1)        -
                                                   ------    ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  256       (16)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR        219        22
                                                   ------    ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $475        $6
                                                   ======    ======
Cash provided from (used in) operating activities included:
 Interest and other financial costs paid (net of
  amount capitalized)                               $(155)     $(68)
 Income taxes refunded, including settlements
  with the Marathon Group                             387        85


Selected notes to financial statements appear on pages 82-92.

<PAGE> 82

                      U. S. STEEL GROUP OF USX CORPORATION
                     SELECTED NOTES TO FINANCIAL STATEMENTS
                     --------------------------------------
                                   (Unaudited)


    1.   The information furnished in these financial statements is unaudited
    but, in the opinion of management, reflects all adjustments necessary for a
    fair presentation of the results for the periods covered.  All such
    adjustments are of a normal recurring nature unless disclosed otherwise.
    These financial statements, including selected notes, have been prepared in
    accordance with the applicable rules of the Securities and Exchange
    Commission and do not include all of the information and disclosures
    required by generally accepted accounting principles for complete financial
    statements.  Certain reclassifications of prior year data have been made to
    conform to 2001 classifications.  Additional information is contained in
    the USX Annual Report on Form 10-K for the year ended December 31, 2000, as
    amended.

    2.   The financial statements of the U. S. Steel Group include the
    financial position, results of operations and cash flows for all businesses
    of USX other than the businesses, assets and liabilities included in the
    Marathon Group and a portion of the corporate assets and liabilities and
    related transactions which are not separately identified with ongoing
    operating units of USX.  These financial statements are prepared using the
    amounts included in the USX consolidated financial statements.  Corporate
    amounts reflected in these financial statements are determined based upon
    methods which management believes to be reasonable.  The accounting
    policies applicable to the preparation of the financial statements of the
    U. S. Steel Group may be modified or rescinded in the sole discretion of
    the Board of Directors of USX (Board), although the Board has no present
    intention to do so.  The Board may also adopt additional policies depending
    on the circumstances.
                                        
         Although the financial statements of the U. S. Steel Group and the
    Marathon Group separately report the assets, liabilities (including
    contingent liabilities) and stockholders' equity of USX attributed to each
    such Group, such attribution of assets, liabilities (including contingent
    liabilities) and stockholders' equity between the U. S. Steel Group and the
    Marathon Group for purposes of preparing their respective financial
    statements does not affect legal title to such assets and responsibility
    for such liabilities.  Holders of USX-U. S. Steel Group Common Stock (Steel
    Stock) and USX-Marathon Group Common Stock (Marathon Stock) are holders of
    common stock of USX and continue to be subject to all the risks associated
    with an investment in USX and all of its businesses and liabilities.
    Financial impacts arising from one Group that affect the overall cost of
    USX's capital could affect the results of operations and financial
    condition of the other Group.  In addition, net losses of either Group, as
    well as dividends or distributions on any class of USX Common Stock or
    series of Preferred Stock and repurchases of any class of USX Common Stock
    or series of Preferred Stock at prices in excess of par or stated value,
    will reduce the funds of USX legally available for payment of dividends on
    both classes of Common Stock.  Accordingly, the USX consolidated financial
    information should be read in connection with the U. S. Steel Group
    financial information.

<PAGE> 83

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        

    2.   (Continued)

         The financial statement provision for income taxes and related tax
    payments or refunds have been reflected in the U. S. Steel Group and the
    Marathon Group financial statements in accordance with USX's tax allocation
    policy for such groups.  In general, such policy provides that the
    consolidated tax provision and related tax payments or refunds are
    allocated between the U. S. Steel Group and the Marathon Group for group
    financial statement purposes, based principally upon the financial income,
    taxable income, credits, preferences and other amounts directly related to
    the respective groups.

         The provision for income taxes for the U. S. Steel Group is based on
    tax rates and amounts which recognize management's best estimate of current
    and deferred tax assets and liabilities.  Differences between the combined
    interim tax provisions of the U. S. Steel and Marathon Groups and USX
    consolidated are allocated to each group based on the relationship of the
    individual group provisions to the combined interim provisions.

    3.   Effective January 1, 2001, USX adopted Statement of Financial
    Accounting Standards No. 133, "Accounting for Derivative Instruments and
    Hedging Activities" (SFAS No. 133), as amended by SFAS Nos. 137 and 138.
    This Standard, as amended, requires recognition of all derivatives at fair
    value as either assets or liabilities.

         The U. S. Steel Group uses commodity-based and foreign currency
    derivative instruments to manage its exposure to price risk.  Management
    has authorized the use of futures, forwards, swaps and options to reduce
    the effects of fluctuations related to the purchase of natural gas and
    nonferrous metals and also certain business transactions denominated in
    foreign currencies.  The U. S. Steel Group has not elected to designate 
    derivative instruments as qualifying for hedge accounting treatment.  
    As a result, the changes in fair value of all derivatives are recognized
    immediately in earnings.

         The cumulative effect adjustment relating to the adoption of SFAS No.
    133 was recognized in other comprehensive income.  The cumulative effect
    adjustment relates only to deferred gains or losses existing as of the
    close of business on December 31, 2000, for hedge transactions under prior
    accounting rules.  The effect of adoption of SFAS No. 133 was less than $1
    million, net of tax.

    4.   In June 2001, the Financial Accounting Standards Board (FASB) issued
    Statements of Financial Accounting Standards No. 141 "Business
    Combinations" (SFAS No. 141), No. 142 "Goodwill and Other Intangible
    Assets" (SFAS No. 142) and No. 143 "Accounting for Asset Retirement
    Obligations" (SFAS No. 143).

         SFAS No. 141 requires that all business combinations completed after
    June 30, 2001, be accounted for under the purchase method.  This standard
    also establishes for all business combinations made after June 30, 2001,
    specific criteria for the recognition of intangible assets separately from
    goodwill.  SFAS No. 141 also requires that the excess of fair value of
    acquired assets over cost in a business combination (negative goodwill) be
    recognized immediately as an extraordinary gain, rather than deferred and
    amortized.

<PAGE> 84

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    4.   (Continued)

         SFAS No. 142 addresses the accounting for goodwill and other
    intangible assets after an acquisition.  The most significant changes made
    by SFAS No. 142 are: 1) goodwill and intangible assets with indefinite
    lives will no longer be amortized; 2) goodwill and intangible assets with
    indefinite lives must be tested for impairment at least annually; and 3)
    the amortization period for the intangible assets with indefinite lives
    will no longer be limited to forty years.  USX will adopt SFAS No. 142
    effective January 1, 2002, as required. The adoption of SFAS No. 142 is not
    expected to have a material impact on the results of operations or
    financial position for the U. S. Steel Group.

         SFAS No. 143 establishes a new accounting model for the recognition
    and measurement of retirement obligations associated with tangible long-
    lived assets. SFAS No. 143 requires that an asset retirement cost should be
    capitalized as part of the cost of the related long-lived asset and
    subsequently allocated to expense using a systematic and rational method.
    USX will adopt the Statement effective January 1, 2003.  The transition
    adjustment resulting from the adoption of SFAS No. 143 will be reported as
    a cumulative effect of a change in accounting principle.  At this time, the
    U. S. Steel Group cannot reasonably estimate the effect of the adoption of
    this Statement on either its financial position or results of operations.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for
    Impairment or Disposal of Long-Lived Assets" (SFAS No. 144). This Statement
    establishes a single accounting model for long-lived assets to be disposed
    of by sale and provides additional implementation guidance for assets to be
    held and used and assets to be disposed of other than by sale.  There will
    be no financial implication related to the adoption of SFAS No. 144, and
    the guidance will be applied on a prospective basis.  The U. S. Steel Group
    will adopt the Statement effective January 1, 2002.

    5.   On November 24, 2000, USX acquired U. S. Steel Kosice, s.r.o. (USSK),
    which is primarily located in the Slovak Republic.  USSK was formed in June
    2000 to hold the steel operations and related assets of VSZ a.s. (VSZ), a
    diversified Slovak corporation.  The acquisition was accounted for under
    the purchase method of accounting.


<PAGE> 85

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        

    5.   (Continued)

         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.

         The following unaudited pro forma data for the U. S. Steel Group
    includes the results of operations of the above acquisitions giving effect
    to them as if they had been consummated at the beginning of the periods
    presented.  The nine month 2001 pro forma results exclude the $68 million
    gain and $33 million tax benefit recorded as a result of the Transtar
    transaction.  In addition, VSZ did not historically provide carve-out
    financial information for its steel activities prepared in accordance with
    generally accepted accounting principles in the United States. Therefore,
    USX made certain estimates and assumptions regarding revenues and costs
    used in the preparation of the unaudited pro forma data relating to USSK
    for the nine months of 2000.

         The following pro forma data is based on historical information and
    does not necessarily reflect the actual results that would have occurred
    nor is it necessarily indicative of future results of operations.

                                                   Nine Months Ended
                                                      September 30
     (In millions, except per share amounts)         2001      2000
     ------------------------------------------------------------------------
     Revenues and other income                     $4,939    $5,643
     Net income (loss)                               (147)      176
       Per share - basic and diluted                (1.72)     1.92


<PAGE> 86

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        
                                        
    6.   The U. S. Steel Group consists of two reportable operating segments:
    1) Domestic Steel and 2) U. S. Steel Kosice (USSK).  Domestic Steel
    includes the United States operations of U. S. Steel while USSK includes
    the U. S. Steel Kosice operations primarily located in the Slovak Republic.
    Domestic Steel is engaged in the domestic production, sale and
    transportation of steel mill products, coke, taconite pellets and coal; the
    management of mineral resources; real estate development; and engineering
    and consulting services.  USSK is engaged in the production and sale of
    steel mill products and coke and primarily serves central European markets.
    The results of segment operations are as follows:

                                         Domestic        Total
(In millions)                             Steel   USSK  Segments
-----------------------------------------------------------------------------
THIRD QUARTER 2001
------------------
Revenues and other income:
 Customer                                $1,359   $285   $1,644
 Intersegment (a)                             2      -        2
 Intergroup (a)                               2      -        2
 Equity in earnings of unconsolidated
   investees                                 11      -       11
 Other                                        2      1        3
                                         ------ ------   ------
    Total revenues and other income      $1,376   $286   $1,662
                                         ====== ======   ======
Segment income (loss)                      $(47)   $39      $(8)
                                         ====== ======   ======
THIRD QUARTER 2000
------------------
Revenues and other income:
 Customer                                $1,457     $-   $1,457
 Intergroup (a)                               5      -        5
 Equity in earnings of unconsolidated
   investees                                  6      -        6
 Other                                        7      -        7
                                         ------ ------   ------
    Total revenues and other income      $1,475     $-   $1,475
                                         ====== ======   ======
Segment income                              $23     $-      $23
                                         ====== ======   ======

(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.

<PAGE> 87

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    6.   (Continued)


                                         Domestic        Total
(In millions)                             Steel   USSK  Segments
-----------------------------------------------------------------------------
NINE MONTHS 2001
----------------
Revenues and other income:
 Customer                                $4,068   $815   $4,883
 Intersegment (a)                             5      -        5
 Intergroup (a)                               6      -        6
 Equity in earnings of unconsolidated
   investees                                 50      1       51
 Other                                       19      2       21
                                         ------ ------   ------
    Total revenues and other income      $4,148   $818   $4,966
                                         ====== ======   ======
Segment income (loss)                     $(267)  $121    $(146)
                                         ====== ======   ======

NINE MONTHS 2000
----------------
Revenues and other income:
 Customer                                $4,660     $-   $4,660
 Intergroup (a)                              13      -       13
 Equity in earnings of unconsolidated
   investees                                 13      -       13
 Other                                       33      -       33
                                         ------ ------   ------
     Total revenues and other income     $4,719     $-   $4,719
                                         ====== ======   ======
Segment income                             $145     $-     $145
                                         ====== ======   ======


(a)Intersegment and intergroup sales and transfers were conducted under terms
   comparable to those with unrelated parties.


<PAGE> 88

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    6.   (Continued)

         The following schedules reconcile segment amounts to amounts reported
    in the U. S. Steel Group's financial statements:

                                                  Third Quarter Ended
                                                      September 30
 (In millions)                                       2001      2000
 ----------------------------------------------------------------------------
 Revenues and other income:
  Revenues and other income of reportable segments $1,662    $1,475
  Elimination of intersegment revenues                 (2)        -
                                                   ------    ------
     Total Group revenues and other income         $1,660    $1,475
                                                   ======    ======

 Income:
  Income (loss) for reportable segments               $(8)      $23
  Items not allocated to segments:
   Administrative expenses                             (5)       (7)
   Net pension credits                                 38        67
   Costs related to:
    Former business activities                        (21)      (23)
    Fairless facility shutdowns                       (29)        -
                                                   ------    ------
     Total Group income (loss) from operations       $(25)      $60
                                                   ======    ======

                                                   Nine Months Ended
                                                      September 30
 (In millions)                                       2001      2000
 ----------------------------------------------------------------------------
 Revenues and other income:
  Revenues and other income of reportable segments $4,966    $4,719
  Elimination of intersegment revenues                 (5)        -
                                                   ------    ------
     Total Group revenues and other income         $4,961    $4,719
                                                   ======    ======
 Income:
  Income (loss) for reportable segments             $(146)     $145
  Items not allocated to segments:
   Administrative expenses                            (20)      (18)
   Net pension credits                                110       199
   Costs related to:
    Former business activities                        (59)      (63)
    Fairless facility shutdowns                       (29)        -
    Proposed Separation                                (9)        -
                                                   ------    ------
     Total Group income (loss) from operations      $(153)     $263
                                                   ======    ======

<PAGE> 89

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    7.   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
    related to the shutdown of these operations, of which $12 million is
    included in depreciation, depletion and amortization and $17 million is
    included in cost of revenues.

    8.The U. S. Steel Group's total comprehensive income (loss) was $(23)
    million for the third quarter of 2001, $17 million for the third quarter of
    2000, $(47) million for the nine months of 2001 and $115 million for the
    nine months of 2000.

    9.   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.

    10.  Inventories are carried at the lower of cost or market.  Cost of
    inventories is determined primarily under the last-in, first-out (LIFO)
    method.


                                                     (In millions)
                                                ------------------------
                                                 September 30December 31
                                                     2001      2000
                                                 -----------------------
    Raw materials                                    $178      $214
    Semi-finished products                            419       429
    Finished products                                 247       210
    Supplies and sundry items                         106        93
                                                     ----      ----
      Total                                          $950      $946
                                                     ====      ====

         Cost of revenues were reduced by $13 million in the nine months of
    2001 as a result of liquidations of LIFO inventories.

<PAGE> 90

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    11.  The method of calculating net income (loss) per common share for the
    Steel Stock and Marathon Stock reflects the Board's intent that the
    separately reported earnings and surplus of the U. S. Steel Group and the
    Marathon Group, as determined consistent with the USX Restated Certificate
    of Incorporation, are available for payment of dividends on the respective
    classes of stock, although legally available funds and liquidation
    preferences of these classes of stock do not necessarily correspond with
    these amounts.

         Basic net income (loss) per share is calculated by adjusting net
    income (loss) for dividend requirements of preferred stock and is based on
    the weighted average number of common shares outstanding.

         Diluted net income (loss) per share assumes exercise of stock options
    and also assumes exercise of common stock warrants in an equity investee,
    provided the effects are not antidilutive.

         See Note 10 of the Notes to USX Consolidated Financial Statements for
    the computation of income per share.

    12.  At September 30, 2001, and December 31, 2000, income taxes receivable
    represents an estimated income tax receivable from the Marathon Group.  In
    addition, included in investments and long-term receivables at September
    30, 2001, and December 31, 2000, respectively, are $43 million and $97
    million of income taxes receivable from the Marathon Group.  These amounts
    have been determined in accordance with the tax allocation policy discussed
    in Note 2.

    13.  Interest and other financial costs in the nine months of 2001 included
    a favorable adjustment of $67 million and provision for income taxes
    included an unfavorable adjustment of $15 million, both of which are
    related to prior years' taxes.

    14.  USX is the subject of, or a party to, a number of pending or
    threatened legal actions, contingencies and commitments relating to the U.
    S. Steel Group involving a variety of matters including laws and
    regulations relating to the environment.  Certain of these matters are
    discussed below.  The ultimate resolution of these contingencies could,
    individually or in the aggregate, be material to the U. S. Steel Group
    financial statements.  However, management believes that USX will remain a
    viable and competitive enterprise even though it is possible that these
    contingencies could be resolved unfavorably to the U. S. Steel Group.  See
    discussion of Liquidity in USX Consolidated Management's Discussion and
    Analysis of Financial Condition and Results of Operations.

<PAGE> 91

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    14.  (Continued)

         The U. S. Steel Group is subject to federal, state, local and foreign
    laws and regulations relating to the environment.  These laws generally
    provide for control of pollutants released into the environment and require
    responsible parties to undertake remediation of hazardous waste disposal
    sites.  Penalties may be imposed for noncompliance.  At September 30, 2001,
    and December 31, 2000, accrued liabilities for remediation totaled $139
    million and $137 million, respectively.  It is not presently possible to
    estimate the ultimate amount of all remediation costs that might be
    incurred or the penalties that may be imposed.

         For a number of years, the U. S. Steel Group has made substantial
    capital expenditures to bring existing facilities into compliance with
    various laws relating to the environment.  In the first nine months of 2001
    and for the years 2000 and 1999, such capital expenditures totaled $11
    million, $18 million and $32 million, respectively.  The U. S. Steel Group
    anticipates making additional such expenditures in the future; however, the
    exact amounts and timing of such expenditures are uncertain because of the
    continuing evolution of specific regulatory requirements.

         Guarantees by USX of the liabilities of affiliated entities of the U.
    S. Steel Group totaled $33 million at September 30, 2001.  In the event
    that any defaults of guaranteed liabilities occur, USX has access to its
    interest in the assets of the affiliates to reduce U. S. Steel Group losses
    resulting from these guarantees.  As of September 30, 2001, the largest
    guarantee for a single affiliate was $24 million.

         The U. S. Steel Group's contract commitments to acquire property,
    plant and equipment at September 30, 2001, totaled $77 million compared
    with $206 million at December 31, 2000.

    15.  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 would become holders
    of United States Steel Corporation Common Stock.  Holders of current USX-
    Marathon Group Common Stock would remain holders of such stock which would
    be renamed Marathon Oil Corporation Common Stock.  The Proposed Separation
    does not contemplate a cash distribution to stockholders.  Each company
    would carry approximately the same assets and liabilities now associated
    with its existing business, except

<PAGE> 92

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


    15.  (Continued)

         for a value transfer of approximately $900 million from Marathon Oil
    Corporation to United States Steel Corporation, intended to maintain United
    States Steel Corporation as a strong, independent company.  The form of the
    value transfer would be a reattribution of USX corporate debt between the
    USX-Marathon Group and the USX-U. S. Steel Group.  The Proposed Separation
    was approved by the shareholders at an October 25, 2001 meeting and is
    subject to 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 Proposed Separation is expected
    to occur on or about December 31, 2001, 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.  Costs related to the Proposed Separation include
    professional fees and other expenses and are included in selling, general
    and administrative expenses (credits).  These costs in the nine months of
    2001 were $9 million.

    16.  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 did 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.

<PAGE> 93

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The U. S. Steel Group, through its Domestic Steel segment, is engaged in
the production, sale and transportation of steel mill products, coke, taconite
pellets and coal; the management of mineral resources; real estate development;
and engineering and consulting services and, through its U. S. Steel Kosice
("USSK") segment, primarily located in the Slovak Republic, in the production
and sale of steel mill products and coke for the central European market.
Certain business activities are conducted through joint ventures and partially
owned companies, such as USS-POSCO Industries ("USS-POSCO"), PRO-TEC Coating
Company ("PRO-TEC"), Clairton 1314B Partnership, Republic Technologies
International, LLC ("Republic") and Rannila Kosice, s.r.o.  Management's
Discussion and Analysis should be read in conjunction with the U. S. Steel
Group's Financial Statements and Selected Notes to Financial Statements.  The
discussion of Results of Operations should be read in conjunction with the
Supplemental Statistics provided on page 109.

     On October 25, 2001, USX announced that the shareholders 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.  The Proposed Separation is subject
to certain conditions and is expected to occur on or about December 31, 2001.
For further discussion, see Management's Discussion and Analysis for USX
Corporation on page 29.

     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 did 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.

     Certain sections of Management's Discussion and Analysis include forward-
looking statements concerning trends or events potentially affecting the
businesses of the U. S. Steel Group.  These statements typically contain words
such as "anticipates," "believes," "estimates," "expects", "intends" or similar
words indicating that future outcomes are uncertain.  In accordance with "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995,
these statements are accompanied by cautionary language identifying important
factors, though not necessarily all such factors that could cause future
outcomes to differ materially from those set forth in forward-looking
statements.  For additional risk factors affecting the businesses of the U. S.
Steel Group, see Supplementary Data -- Disclosures About Forward-Looking
Information in the USX Annual Report on Form 10-K for the year ended
December 31, 2000, as amended, and in subsequent Forms 10-Q and 8-K.

<PAGE> 94

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------
                                        
Results of Operations
---------------------
     Revenues and other income increased by $185 million and $242 million in the
third quarter and first nine months of 2001, respectively, compared with the
same periods in 2000.  The increases primarily reflected the inclusion of USSK
revenues, partially offset by lower domestic shipment volumes (shipments
decreased 3,000 tons and 844,000 tons in the third quarter and first nine months
of 2001, respectively) and lower average domestic steel product prices (average
prices decreased $34/ton and $19/ton for the third quarter and first nine months
of 2001, respectively).

     Income from operations for the U. S. Steel Group for the third quarter and
first nine months of 2001 and 2000 is set forth in the following table:

                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
(Dollars in millions)                      2001   2000    2001   2000
                                         ------  ------ ---------------
Segment income (loss) for 
  Domestic Steel(a)(b)                     $(47)    $23  $(267)  $145
Segment income for U. S. Steel Kosice(c)     39       -    121      -
                                          -----   -----  -----  -----
   Income (loss) for 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 income (loss) from operations   $(25)    $60  $(153)  $263
                                          =====   =====  =====  =====
------
       (a)   Results in the third quarter of 2001 include a net favorable
     $21 million from insurance recoveries and related costs for fire damages to
     the cold rolling mill at USS-POSCO.  Results in the first nine months of
     2001 include a net favorable $19 million from insurance recoveries and
     related costs for fire damages to the cold rolling mill at USS-POSCO, a
     favorable $68 million for U. S. Steel Group'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 include $10 million for U. S. Steel Group'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 income from the sale and 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 benefit costs of $11 million included in
     Fairless facility shutdown costs.  See note g.
       (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 shutdown of the cold rolling and tin
     mill facilities at Fairless Works.

<PAGE> 95

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

Segment income for Domestic Steel
     Segment income for Domestic Steel decreased $70 million and $412 million in
the third quarter and first nine months of 2001, respectively, compared with the
same periods in 2000.  The decrease in segment income in third quarter 2001
compared to third quarter 2000 was primarily due to lower average steel prices,
partially offset by lower costs per ton from improved operating efficiencies and
lower energy costs.  The decrease in segment income in the first nine months of
2001 compared to the same period last year was primarily due to lower average
steel prices, lower shipment volumes and higher costs per ton from operating
inefficiencies related to reduced throughput levels.  The third quarter of 2001
includes a net favorable $21 million from insurance recoveries and related costs
for fire damages to the cold rolling mill at USS-POSCO.  The first nine months
of 2001 include a net favorable $19 million from insurance recoveries and
related costs for fire damages to the cold rolling mill at USS-POSCO, a
favorable $68 million for U. S. Steel Group's share of gain on the Transtar
reorganization and a $74 million charge for a substantial portion of accounts
receivable from Republic.  In addition, the first nine months of 2000 included
charges totaling $15 million for certain environmental and legal contingencies
and were unfavorably impacted by a two-week unplanned blast furnace outage at
Fairfield Works.

Segment income for U. S. Steel Kosice
     Segment income for USSK was $39 million in the third quarter of 2001 and
$121 million for the first nine months of 2001.  USSK was acquired in the fourth
quarter of 2000.

Items not allocated to segment
     Net pension credits associated with all of U. S. Steel Group's domestic
pension plans are not included in segment income for domestic operations. These
net pension credits, which are primarily noncash, totaled $38 million and
$110 million in the third quarter and first nine months of 2001, respectively,
compared to $67 million and $199 million in the same periods in 2000.  The
$29 million and $89 million decrease in net pension credits for the third
quarter and first nine months of 2001, respectively, from the same periods in
2000 was primarily due to the transition asset being fully amortized at the end
of 2000 and the addition of employees and retirees with the Transtar
reorganization and the acquisition of the tin mill products business of LTV
Corporation.  Currently, the net pension credit for 2001 is expected to be
approximately $138 million, net of $11 million for the Fairless termination
expense and excluding any potential impacts from the Proposed Separation.
Future net pension credits will no longer benefit from the now fully amortized
transition asset and can vary depending upon the market performance of plan
assets, changes in actuarial assumptions regarding such factors as a selection
of a discount rate and expected rate of return on assets, changes in the
amortization levels of prior period service costs, plan amendments affecting
benefit payout levels, business combinations and profile changes in the
beneficiary populations being valued.  To the extent net pension credits decline
in the future, income from operations would be adversely affected.

     Costs related to Fairless facility shutdown primarily include accelerated
depreciation or impairment of fixed assets and employee benefit costs associated
with the shutdown of the cold rolling and tin mill facilities at Fairless Works.

<PAGE> 96

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     Net interest and other financial costs increased $11 million in the third
quarter of 2001 and, excluding a favorable adjustment of $67 million related to
prior years' taxes, increased $66 million in the first nine months of 2001 as
compared with the same period in 2000.  These increases were primarily due to
higher average debt levels attributed to the U. S. Steel Group, including debt
incurred in the fourth quarter of 2000 related to the acquisition of USSK and
for the $500 million elective Voluntary Employee Benefit Association ("VEBA")
funding.  These increases were partially offset by an increase in interest
income due to higher levels of centrally managed cash attributed to the U. S.
Steel Group and foreign exchange gains related to USSK.

     The credit for income taxes in the third quarter and first nine months of
2001 increased compared to the provision for income taxes in the same periods in
2000 due to a decrease in income before income taxes.  The credit for the first
nine months of 2001 included a $33 million tax benefit associated with the
Transtar reorganization and an unfavorable adjustment of $15 million primarily
related to the settlement of prior years' taxes.  In addition, as a result of
tax credit provisions of laws of the Slovak Republic and certain tax planning
strategies, virtually no income tax provision is recorded for income related to
USSK.

     Net income decreased $42 million and $162 million in the third quarter and
first nine months of 2001, respectively, compared to the same periods in 2000,
primarily reflecting the factors discussed above.

Operating Statistics
--------------------
     For the U. S. Steel Group, third quarter and first nine months of 2001
shipments of 3.6 million tons and 10.4 million tons increased 39% and 23%,
respectively, from the same periods in 2000, with the increase resulting from
the inclusion of USSK shipments.  Domestic Steel shipments of 2.6 million tons
for the third quarter of 2001 remained about the same as third quarter 2000.
Domestic Steel shipments of 7.6 million tons for the first nine months of 2001
decreased 10% from the same period in 2000.  Domestic Steel raw steel production
in the third quarter of 2001 of 2.7 million tons was down 2% compared to the
same period in 2000.  Domestic Steel raw steel production in the first nine
months of 2001 of 7.9 million tons decreased 11% from the same period in 2000.
Domestic Steel raw steel capability utilization in the third quarter of 2001
averaged 83.3%, compared to 85.5% in the same period in 2000.  Domestic Steel
raw steel capability utilization in the first nine months of 2001 averaged
82.9%, compared to 93.3% in the same period in 2000.  Domestic Steel shipments,
raw steel production and raw steel capability utilization in the third quarter
and first nine months of 2000 were negatively impacted by the blast furnace
outage at Fairfield Works.  At USSK, third quarter and first nine month 2001
shipments were 1.0 million tons and 2.8 million tons, respectively.

Balance Sheet
-------------
     Current assets at September 30, 2001 increased $284 million from year-end
2000 primarily due to an increase in cash and cash equivalents, resulting from
an increase in domestic time deposits related to the issuance of the 10.75%
Senior Notes and centrally managed cash held by certain foreign subsidiaries.

<PAGE> 97
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     Net property, plant and equipment at September 30, 2001 increased
$350 million from year-end 2000 primarily due to the Transtar reorganization and
the acquisition of East Chicago Tin.

     Current liabilities at September 30, 2001 increased $74 million compared to
year-end 2000 primarily due to increases in accounts payable and accrued taxes.
The increase in accounts payable was primarily due to an increase in trade
payables.  The increase in accrued taxes was primarily due to the settlement of
prior years' taxes.

     Total long-term debt and notes payable at September 30, 2001 increased
$313 million compared to year-end 2000 due to an increase in the portion of USX
consolidated debt attributed to the U. S. Steel Group.  The increase in
attributed debt resulted from financing activities in preparation for the
Proposed Separation and cash used for capital expenditures and dividends in
excess of cash provided from operations.

     Employee benefits at September 30, 2001 increased $169 million compared to
year-end 2000 about half of which was due to the addition of employees and
retirees with the Transtar reorganization and the acquisition of the tin mill
products business of LTV Corporation.  The remainder of the increase was
primarily due to ongoing accruals in excess of cash payments from company
assets.  Following the elective $500 million VEBA funding in the fourth quarter
of 2000, which decreased the employee benefits liability, most union retiree
medical claims are being paid from the VEBA instead of company assets.

Cash Flow
---------
     Net cash provided from operating activities increased $174 million in the
first nine months of 2001, compared with the first nine months of 2000.  The
increase was due primarily to improved working capital changes, which included a
favorable intergroup income tax settlement of $379 million in the 2001 period
compared to a favorable intergroup settlement of $97 million in the 2000 period.
In addition, adjustments for pensions and other postretirement benefits
(excluding the noncash pension credit) improved because VEBA funds were used to
pay medical benefits for union retirees.  These improvements were partially
offset by decreased net income (excluding depreciation, depletion and
amortization).

     Capital expenditures in the first nine months of 2001 were $197 million,
compared with $133 million in the same period in 2000.  The increase was
primarily due to exercising a buyout option under the lease for the Gary Works
No. 2 Slab Caster, repairs to the No. 3 Blast Furnace at the Mon Valley Works,
and inclusion of spending for USSK.

     Contract commitments for capital expenditures at September 30, 2001,
totaled $77 million, compared with $206 million at December 31, 2000.


<PAGE> 98
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     Financial obligations increased by $294 million in the first nine months of
2001.  The increase in financial obligations resulted from capital expenditures
and dividend payments exceeding cash provided from operations.  Financial
obligations consist of the U. S. Steel Group's portion of USX debt and preferred
stock of a subsidiary attributed to both groups, as well as debt and financing
agreements specifically attributed to the U. S. Steel Group.

     Dividends paid decreased $26 million in the first nine months of 2001 from
the same period in 2000, due to a decrease in the dividend rate paid to U. S.
Steel Group common stockholders effective with the June 2001 payment.

Derivative Instruments
----------------------
     See Quantitative and Qualitative Disclosures About Market Risk for
discussion of derivative instruments and associated market risk for U. S. Steel
Group.

Liquidity
---------
     On July 27, 2001, United States Steel LLC issued $385 million of seven-year
Senior Notes ("Notes") at an interest rate of 10.75 percent per annum and
maturing on August 1, 2008.  On September 11, 2001, an additional $150 million
of Notes were issued under the same terms.  These Notes were issued in order to
provide a portion of the funding that will be needed to implement the Proposed
Separation and are guaranteed by USX Corporation until completion of the
Proposed Separation, at which time they will be solely the obligation of United
States Steel Corporation.  The indenture governing these Notes includes
financial covenants that significantly limit the rights of United States Steel
Corporation after the Proposed Separation.  Most of these covenants apply only
when the Notes are not rated investment grade.  Standard & Poor's and Moody's
have assigned BB and Ba3 ratings, respectively, to these Notes, post-separation.
Among other things these covenants may:

  -   impose restrictions on payment of dividends;
  -   limit additional borrowings by United States Steel Corporation, including
      limiting the amount of borrowings secured by inventories or accounts 
      receivable;
  -   limit asset sales and sale of the stock of subsidiaries; and
  -   restrict the ability to make capital expenditures or certain acquisitions.

     The Notes also contain covenants that require, immediately following the
Proposed Separation and after giving pro forma effect to any subsequent payments
to be made as part of the Proposed Separation, United States Steel Corporation
and its subsidiaries to have an aggregate of at least $400 million in undrawn
financings and cash, of which at least $300 million shall be available under
facilities with terms extending at least three years after the date such
facilities are put in place, and that the United States Steel Corporation shall
not be in default under any of the covenants under the Notes.  The Notes also
carry registration rights requiring the filing of a registration statement by
March 31, 2002.

     On November 7, 2001, United States Steel LLC commenced offers to exchange
its 10% Senior Quarterly Income Debt Securities due 2031 ("SQUIDS"), up to an
aggregate of $365 million, for three securities which are totally or partially
attributed to the U. S. Steel Group.


<PAGE> 99
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     United States Steel LLC is currently negotiating a $400 million Accounts
Receivable Facility that will provide a portion of the funding needed to
implement the Proposed Separation.  United States Steel LLC is also negotiating
a $400 million Inventory Financing Facility to meet the financing needs of the
Proposed Separation.  Both facilities are expected to close in November 2001.

     For additional discussion of USX's liquidity and capital resources and
details of the exchange offer, see Management's Discussion and Analysis of USX
Consolidated Financial Condition, Cash Flows and Liquidity.

Environmental Matters, Litigation and Contingencies
---------------------------------------------------
     The U. S. Steel Group has incurred and will continue to incur substantial
capital, operating and maintenance, and remediation expenditures as a result of
environmental laws and regulations. In recent years, these expenditures have
been mainly for process changes in order to meet Clean Air Act obligations,
although ongoing compliance costs have also been significant. To the extent
these expenditures, as with all costs, are not ultimately reflected in the
prices of the U. S. Steel Group's products and services, operating results will
be adversely affected. The U. S. Steel Group believes that all of its domestic
competitors are subject to similar environmental laws and regulations. However,
the specific impact on each competitor may vary depending on a number of
factors, including the age and location of its operating facilities, marketing
areas, production processes and the specific products and services it provides.
To the extent that competitors are not required to undertake equivalent costs in
their operations, the competitive position of the U. S. Steel Group could be
adversely affected.

     In addition, the U. S. Steel Group expects to incur capital expenditures
for its USSK operation to meet environmental standards under the Slovak
Republic's environmental laws.

     USX has been notified that it is a potentially responsible party ("PRP") at
20 waste sites related to the U. S. Steel Group under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") as of
September 30, 2001.  In addition, there are 11 sites related to the U. S. Steel
Group where USX has received information requests or other indications that USX
may be a PRP under CERCLA but where sufficient information is not presently
available to confirm the existence of liability or make any judgment as to the
amount thereof.  There are also 35 additional sites related to the U. S. Steel
Group where remediation is being sought under other environmental statutes, both
federal and state, or where private parties are seeking remediation through
discussions or litigation.  At many of these sites, USX is one of a number of
parties involved and the total cost of remediation, as well as USX's share
thereof, is frequently dependent upon the outcome of investigations and remedial
studies.  The U. S. Steel Group accrues for environmental remediation activities
when the responsibility to remediate is probable and the amount of associated
costs is reasonably determinable.  As environmental remediation matters proceed
toward ultimate resolution or as additional remediation obligations arise,
charges in excess of those previously accrued may be required.

<PAGE> 100
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     In October 1996, USX was notified by the Indiana Department of
Environmental Management ("IDEM"), acting as lead trustee, that IDEM and the
U.S. Department of the Interior had concluded a preliminary investigation of
potential injuries to natural resources related to the releases of hazardous
substances from various municipal and industrial sources along the east branch
of the Grand Calumet River and Indiana Harbor Canal.  The public trustees
completed a pre-assessment screen pursuant to federal regulations and have
determined to perform a Natural Resource Damages Assessment. USX was identified
as a PRP along with 15 other companies owning property along the river and
harbor canal.  USX and eight other PRPs have formed a joint defense group.  In
2000, the trustees concluded their assessment of sediment injuries, which
includes a technical review of environmental conditions.  The PRP joint defense
group has proposed terms for the settlement of this claim which have been
endorsed by representatives of the trustees and the U.S. Environmental
Protection Agency ("EPA") to be included in a consent decree that USX expects
will resolve this claim.  A reserve has been established for the USX share of
this anticipated settlement.

     The Berks Associates/Douglassville Site ("Berks Site") is situated on a 50-
acre parcel located on the Schuylkill River in Berks County, Pa.  Used oil and
solvent reprocessing operations were conducted on the Berks Site between 1941
and 1986.  In September 1997, USX signed a consent decree to conduct a
feasibility study at the site relating to the alternative remedy.  In 1999, a
new Record of Decision was approved by the EPA and the U.S. Department of
Justice.  On January 19, 2001, USX signed a consent decree with the EPA to
remediate this site.  On April 6, 2001, USX paid $0.4 million for costs
associated with this site.  The only remaining outstanding claim is the natural
resource damages claim filed by the Commonwealth of Pennsylvania.

     In 1987, the California Department of Health Services ("DHS") issued a
remedial action order for the GBF/Pittsburg landfill near Pittsburg, California.
DHS alleged that from 1972 through 1974, Pittsburg Works arranged for the
disposal of approximately 2.6 million gallons of waste oil, sludge, caustic mud
and acid, which were eventually taken to this landfill for disposal.  In 2000,
the parties reached a buyout arrangement with a third party remediation firm,
whereby the firm agreed to take title to and remediate the site and also
indemnify the PRPs.  This commitment was backed by pollution insurance.  USX's
share to participate in the buyout was approximately $1.1 million.  Payment of
the USX buyout amount was made December 2000.  Title to the site was transferred
to the remediation firm on January 31, 2001.

     In 1987, USX and the PA Department of Environmental Resources ("PADER")
entered into a consent Order to resolve an incident in January 1985 involving
the alleged unauthorized discharge of benzene and other organic pollutants from
Clairton Works in Clairton, Pa. That consent Order required USX to pay a penalty
of $50,000 and a monthly payment of $2,500 for five years. In 1990, USX and the
PADER reached agreement to amend the consent Order. Under the amended Order, USX
agreed to remediate the Peters Creek Lagoon (a former coke plant waste disposal
site); to pay a penalty of $300,000; and to pay a monthly penalty of up to
$1,500 each month until the former disposal site is closed. Remediation costs
have amounted to $9.8 million with another $1.2 million presently projected to
complete the project.

<PAGE> 101
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     In 1988, USX and three other PRPs agreed to the issuance of an
administrative order by the EPA to undertake emergency removal work at the
Municipal & Industrial Disposal Co. site in Elizabeth Township, Pa. The cost of
such removal, which has been completed, was approximately $4.2 million, of which
USX paid $3.4 million. The EPA indicated that further remediation of this site
would be required. In October 1991, the PADER placed the site on the
Pennsylvania State Superfund list and began a Remedial Investigation ("RI")
which was issued in 1997. USX's share of any final allocation formula for
cleanup of the entire site was never determined; however, based on presently
available information, USX may have been responsible for as much as 70% of the
waste material deposited at the site.  The PA Department of Environmental 
Protection ("PADEP"), formerly PADER, issued its Final Feasibility Study Report
for the entire site in August 2001.  The report identifies and evaluates 
feasible remedial alternatives and selects three preferred alternatives.  These
alternatives are estimated to cost from $17 million to $20 million.  Consultants
for United States Steel have concluded that a less costly alternative should be
employed at the site, which is estimated to cost $5.5 million. Based on the
allocation of liability that has been recognized for past site cleanup
activities, the United States Steel share of costs for this remedy would be
approximately $3.7 million.

     In November 2000, a Notice Of Violation ("NOV") was issued by the Jefferson
County Health Department ("JCHD") alleging violation of the Halogenated Solvent
National Emission Standards for Hazardous Air Pollutants and the JCHD Volatile
Organic Compound ("VOC") regulations at the sheet mill stretch leveler at
Fairfield Works.  U. S. Steel Group proposed a civil penalty of $100,000 and a
VOC emission limit, which have been agreed to by JCHD.  A consent order was
executed and approved by the court in May 2001.  The penalty was paid by U. S.
Steel Group in June 2001.

     In September 2001, USX agreed to an Administrative Order on Consent with
the State of North Carolina for the assessment and cleanup of a Greensboro, NC
fertilizer manufacturing site.  The site was owned by Armour Agriculture
Chemical Company (now named Viad) from 1912 to 1968.  USX owned the site from
1968 to 1986 and sold the site to LaRoche Industries in 1986.  The agreed order
allocated responsibility for assessment and cleanup costs as follows:  Viad -
48%, USX - 26% and LaRoche - 26%; and LaRoche was appointed to be the lead party
responsible for conducting the cleanup.  In March 2001, USX was notified that
LaRoche had filed for protection under the Bankruptcy law.  On August 23, 2001,
the allocation of responsibility for this site assessment and cleanup and the
cost allocation was approved by the bankruptcy court in the LaRoche Bankruptcy.
The estimated remediation costs are $4.4 million to $5.7 million.  USX's
estimated share of these costs is $1.6 million.

     USX is the subject of, or a party to, a number of pending or threatened
legal actions, contingencies and commitments relating to the U. S. Steel Group
involving a variety of matters, including laws and regulations relating to the
environment, certain of which are discussed in Note 14 to the U. S. Steel Group
Financial Statements.  The ultimate resolution of these contingencies could,
individually or in the aggregate, be material to the U. S. Steel Group Financial
Statements. However, management believes that USX will remain a viable and
competitive enterprise even though it is possible that these contingencies could
be resolved unfavorably to the U. S. Steel Group.

<PAGE> 102
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

Outlook
-------
     Our order rate for the fourth quarter is currently running well below our
third quarter rate.  In the third quarter, Domestic Steel shipments totaled
2.6 million net tons and average realized prices were lower than the second
quarter primarily due to changes in mix, including decreased sales of tubular
and plate products.  In the fourth quarter, we expect Domestic Steel shipments
to be approximately 2.2 million net tons and average realized prices to be about
flat compared to the third quarter.  In light of expected slow market conditions
in the fourth quarter, we have advanced the schedule for a maintenance outage on
the Gary Works No. 6 blast furnace.

     On May 31, 2001, a major fire damaged the cold-rolling mill at USS-POSCO,
which is fifty percent owned by U. S. Steel Group.  Damage was predominantly
limited to the cold-rolling mill area of the plant.  USS-POSCO maintains
insurance coverage against such losses, including coverage for business
interruption.  Claims for reimbursement for 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 mill is expected to
resume production in the first quarter of 2002, although full-production may not
be achieved until mid-2002.  Until such time, the plant will continue customer
shipments using cold-rolled coils from U. S. Steel Group and POSCO as substitute
feedstock.

     For USSK, we expect fourth quarter shipments to be approximately
0.8 million tons and fourth quarter average realized prices to be somewhat lower
than the third quarter.  Also, USSK has scheduled several outages in the fourth
quarter which will increase repair and maintenance expenses, and expects to 
temporarily idle most operations between December 22, 2001 and January 7, 2002
due to low order levels and seasonal operation curtailments by customers.

     For the full year 2001, total shipments are expected to be approximately
13.3 to 13.5 million net tons with Domestic Steel shipments of approximately
9.8 million net tons and USSK shipments of approximately 3.6 million net tons.

     For the longer term, domestic shipment levels and realized prices will be
influenced by the strength and timing of a recovery in the manufacturing sector
of the domestic economy, levels of imported steel and production capability
changes by domestic competitors.  Many factors, including developments from the
events of September 11, will determine the strength and timing of such recovery
and the other factors.  For USSK, economic and political developments in Europe
and elsewhere will impact USSK's results of operations in 2002 and thereafter.

     Capital expenditures are expected to be approximately $300 million for the
full year, including expenditures related to the recently acquired facilities of
USSK, Transtar, and East Chicago Tin.

     USX owns a 16 percent equity method investment in Republic, through USX's
ownership in Republic Technologies International Holdings, LLC, which is the
sole owner of Republic.  Republic is a major purchaser of raw materials from
U. S. Steel Group and the primary supplier of rounds for the tubular facility in
Lorain, Ohio.  On April 2, 2001, Republic filed to reorganize under Chapter 11
of the U.S. Bankruptcy Code.  Republic has continued to supply the Lorain mill
since filing for

<PAGE> 103
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

bankruptcy and no supply interruptions are anticipated.  At September 30, 2001,
U. S. Steel Group's remaining pre-petition financial exposure to Republic, after
recording various losses and reserves, totaled approximately $30 million.

     On August 14, 2001, U. S. Steel Group announced its intention to
permanently close the cold rolling and tin mill operations at Fairless Works on
or around November 12, 2001.  These facilities' combined annual finishing
capacity is 1.5 million tons.  U. S. Steel Group 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 million to $11 million is expected to be recorded in the fourth quarter, when
the closure plan should be completed.

     On October 18, 2001, a voluntary early retirement program was offered to
USX employees and certain designated groups of U. S. Steel Group employees whose
work is functionally related to USX headquarters groups.  The financial impact
of this program will be classified as a cost related to the Proposed Separation
and will be allocated to Marathon and U. S. Steel.

     While the U. S. Steel pension plans' liability is expected to increase
because of falling interest rates and other factors, the plans' investment
performance has been substantially better than the overall markets, and the
plans continue to be well funded.

     On October 30, 2001, United States Steel LLC announced the launch of
Straightline Source, the first steel distribution business created to serve
customers of all sizes who do not typically buy directly from steel producers.
Straightline's fully integrated order input system, advanced inventory
management and progressive logistics technology are networked to create a direct
buying option for processed steel products.  While managing the customer
relationship, Straightline makes use of the processing capacity of a network of
qualified partners.  Straightline will begin offering processed steel products
in North Carolina, South Carolina and eastern Tennessee in October.  Additional
regional launches will continue throughout 2001 and 2002.

     The above discussion includes forward-looking statements concerning
shipments, pricing, equity investee performance and the expansion of
Straightline.  These statements are based on assumptions as to future product
demand, prices and mix, and production.  Steel shipments and prices can be
affected by imports and actions of the U.S. Government and its agencies
pertaining to trade, domestic and international economies, domestic production
capacity, and customer demand.  Factors that may affect USSK results are similar
to domestic factors, including excess world supply and foreign currency
fluctuations, and also can be influenced by matters peculiar to international
marketing such as tariffs.  Factors that could affect the expansion of
Straightline include economic conditions and the customers' acceptance of this
technology-based buying approach.  In the event these assumptions prove to be
inaccurate, actual results may differ significantly from those presently
anticipated.  One factor that could potentially affect the completion or timing
of the resumption of operations at the USS-POSCO cold-rolling mill, among
others, is the timing of completion of repairs.

<PAGE> 104
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     Steel imports to the United States accounted for an estimated 24%, 27% and
26% of the domestic steel market in the first eight months of 2001, and for the
years 2000 and 1999, respectively.

     On November 13, 2000, U. S. Steel Group joined with eight other producers
and the Independent Steelworkers Union to file trade cases against hot-rolled
carbon steel flat products from 11 countries (Argentina, India, Indonesia,
Kazakhstan, the Netherlands, the People's Republic of China, Romania, South
Africa, Taiwan, Thailand and Ukraine).  Three days later, the USWA also entered
the cases as a petitioner.  Antidumping ("AD") cases were filed against all the
countries and countervailing duty ("CVD") cases were filed against Argentina,
India, Indonesia, South Africa, and Thailand.  The U.S. Department of Commerce
("Commerce") has found margins in all of the cases.  The U.S. International
Trade Commission ("ITC") previously found material injury to the domestic
industry in the cases against Argentina and South Africa, and, on November 2,
2001, the ITC found material injury to the domestic industry in the cases
against the remaining countries.

     On June 5, 2001, President Bush announced a three-part program to address
the excessive imports of steel that have been depressing markets in the United
States.  The program involves (1) negotiations with foreign governments seeking
near-term elimination of inefficient excess steel production capacity throughout
the world, (2) negotiations with foreign governments to establish rules that
will govern steel trade in the future and eliminate subsidies, and (3) an
investigation by the ITC under Section 201 of the Trade Act of 1974 to determine
whether steel is being imported into the U.S. in such quantities as to be a
substantial cause of serious injury to the U.S. steel industry.

     U. S. Steel Group believes that the remedies provided by AD and CVD are
insufficient to correct the widespread dumping and subsidy abuses that currently
characterize steel imports into our country and has, therefore, urged the U.S.
government to take actions such as those in the President's program.  U. S.
Steel Group, nevertheless, intends to file additional AD and CVD petitions
against unfairly traded imports that adversely impact, or threaten to adversely
impact, the results of the U. S. Steel Group and is urging the U.S. government
to take additional steps.

<PAGE> 105
                                        
                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION
                  --------------------------------------------

     In furtherance of the President's program, on June 22, 2001, the U.S. Trade
Representative requested that the ITC initiate investigations under Section 201
of the Trade Act of 1974.  Products included in the request were in the
following categories:
          (1)   Carbon and alloy flat products;
          (2)   Carbon and alloy long products;
          (3)   Carbon and alloy pipe and tube; and
          (4)   Stainless steel and alloy tool steel products.
On October 22, 2001, the ITC made its determinations as to injury.  It
determined that the requisite injury had been demonstrated as to the following
products that are produced by the U. S. Steel Group:  carbon and alloy slabs,
plate, hot-rolled, cold-rolled, and coated products and carbon and alloy welded
pipe other than oil country tubular goods.  The vote regarding tin mill products
was a tie.  These determinations pertain to imports from all countries except
that (i) imports from Canada were found not to have been a substantial cause of
serious injury as to any of the flat products, (ii) the vote was tied as to the
impact of Canadian imports on welded pipe, and (iii) imports from Mexico were
found not to have been a substantial cause of serious injury as to tin mill
products and welded pipe.  Products produced by the U. S. Steel Group that were
within the scope of the investigations but as to which the ITC made negative
findings of injury as to all countries are seamless tubular products and welded
oil country tubular goods.  The ITC will continue its investigations with
consideration of what relief would be appropriate as to those products that
received affirmative or tie injury determinations.  The ITC will make
recommendations for relief to the President, who will then act within his
discretion in granting or withholding relief and in fashioning the type and
extent of relief.  The ITC's recommendations to the President are due by statute
December 19, 2001, following which the President will have 60 days, or until
February 17, 2002, to make his decision (unless extended for up to 15 days).
The U. S. Steel Group has requested, however, that the ITC and the President
expedite their decisions.

     On September 28, 2001, U. S. Steel Group joined with seven other producers
to file trade cases against cold-rolled carbon steel flat products from 20
countries (Argentina, Australia, Belgium, Brazil, China, France, Germany, India,
Japan, Korea, Netherlands, New Zealand, Russia, South Africa, Spain, Sweden,
Taiwan, Thailand, Turkey, and Venezuela).  AD cases were filed against all the
countries and CVD cases were filed against Argentina, Brazil, France, and Korea.

<PAGE> 106

                      U. S. STEEL GROUP OF USX CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                      ------------------------------------

Commodity Price Risk and Related Risks
--------------------------------------
      Sensitivity analysis of the incremental effects on pretax income of
hypothetical 10% and 25% changes in commodity prices for commodity-based
derivative instruments are provided in the following table(a):
                                            Incremental Decrease in
                                           Income Before Income Taxes
                                            Assuming a Hypothetical
                                                Price Change of:

(Dollars in millions)                             10%     25%
-----------------------------------------------------------------------------
Commodity-Based Derivative Instruments
U. S. Steel Group

    Natural Gas                                   1.3     3.2   (b)

    Zinc                                          2.8     6.9   (b)

    Tin                                           0.2     0.6   (b)

      (a)  With the adoption of SFAS No. 133, the definition of a derivative
      instrument has been expanded to include certain fixed price physical
      commodity contracts.  Such instruments are included in the above table.
      Amounts reflect the estimated incremental effects on pretax income of
      hypothetical 10% and 25% changes in closing commodity prices at
      September 30, 2001.  Management evaluates the portfolios of commodity-
      based derivative instruments on an ongoing basis and adjusts strategies
      to reflect anticipated market conditions, changes in risk profiles and
      overall business objectives.  Changes to the portfolios subsequent to
      September 30, 2001, may cause future pretax income effects to differ from
      those presented in the table.
      (b)  Price decrease.


<PAGE> 107

                      U. S. STEEL GROUP OF USX CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                      -------------------------------------

Interest Rate Risk
------------------
     USX is subject to the effects of interest rate fluctuations on certain of
its non-derivative financial instruments.  A sensitivity analysis of the
projected incremental effect of a hypothetical 10% decrease in September 30,
2001, interest rates on the fair value of the U. S. Steel Group's specifically
attributed non-derivative financial instruments and the U. S. Steel Group's
portion of USX's non-derivative financial instruments attributed to both groups,
is provided in the following table:

(Dollars in millions)
-------------------------------------------------------------------------------
As of September 30, 2001
                                                           Incremental
                                                           Increase in
Non-Derivative                                       Fair     Fair
Financial Instruments(a)                             Value   Value(b)
-------------------------------------------------------------------------------
Financial assets:
 Investments and
   long-term receivables                              $91        $-
-------------------------------------------------------------------------------
Financial liabilities:
 Long-term debt (c)(d)                             $2,888      $111
 Preferred stock of
   subsidiary                                          65         6
 USX obligated mandatorily redeemable convertible
   preferred securities of a subsidiary trust         184        16
                                                    ------    ------
      Total liabilities                            $3,137      $133
-------------------------------------------------------------------------------
(a)    Fair values of cash and cash equivalents, receivables, notes payable,
  accounts payable and accrued interest approximate carrying value and are
  relatively insensitive to changes in interest rates due to the short-term
  maturity of the instruments. Accordingly, these instruments are excluded from
  the table.
(b)    Reflects, by class of financial instrument, the estimated incremental
  effect of a hypothetical 10% decrease in interest rates at September 30,
  2001, on the fair value of USX's non-derivative financial instruments. For
  financial liabilities, this assumes a 10% decrease in the weighted average
  yield to maturity of USX's long-term debt at September 30, 2001.
(c)    Includes amounts due within one year.
(d)    Fair value was based on market prices where available, or current
  borrowing rates for financings with similar terms and maturities.


<PAGE> 108

                      U. S. STEEL GROUP OF USX CORPORATION
                          QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK
                      ------------------------------------

Foreign Currency Exchange Rate Risk
-----------------------------------
     USX is subject to the risk of price fluctuations related to anticipated
revenues and operating costs, firm commitments for capital expenditures and
existing assets or liabilities denominated in currencies other than U.S.
dollars.  USX has not generally used derivative instruments to manage this risk.
However, USX has made limited use of forward currency contracts to manage
exposure to certain currency price fluctuations.  At September 30, 2001, the U.
S. Steel Group had open Euro forward sale contracts for both U.S. dollars (total
carrying value of approximately $4.2 million) and Slovak Koruna (total carrying
value of approximately $7.3 million).  A 10% increase in the September 30, 2001
Euro forward rates would result in an immaterial charge to income.  The entire
amount of these contracts is attributed to the U. S. Steel Group.

Equity Price Risk
-----------------
     As of September 30, 2001, USX was subject to equity price risk and market
liquidity risk related to its investment in VSZ a.s., the former parent of U. S.
Steel Kosice, s.r.o., which is attributed to the U. S. Steel Group.  These risks
are not readily quantifiable.

Safe Harbor
-----------
     The U. S. Steel Group's Quantitative and Qualitative Disclosures About
Market Risk include forward-looking statements with respect to management's
opinion about risks associated with the U. S. Steel Group's use of derivative
instruments.  These statements are based on certain assumptions with respect to
market prices, industry supply and demand for steel products and certain raw
materials, and foreign exchange rates.  To the extent that these assumptions
prove to be inaccurate, future outcomes with respect to the U. S. Steel Group's
hedging programs may differ materially from those discussed in the forward-
looking statements.


<PAGE> 109

                      U. S. STEEL GROUP OF USX CORPORATION
                       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          (21)    (23)   (59)    (63)
    activities(e)
  Costs related to proposed separation(f)     -       -     (9)      -
  Costs related to Fairless facility        (29)      -    (29)      -
    shutdown(g)
                                          -----   -----  -----   -----
                                                       
   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 of 2001 include a net 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
      include a net favorable $19 million from insurance recoveries and related
      costs for fire damages to the cold rolling mill at USS-POSCO, 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.

<PAGE> 110


P
art II - Other Information:
---------------------------

Item 1. LEGAL PROCEEDINGS

Marathon Group

Environmental Proceedings

     In May 2001, Marathon and MAP settled in a consent decree U.S.
Environmental Protection Agency ("EPA") allegations that the Robinson refinery
did not qualify for an exemption under the National Emission Standards for
Benzene Waste Operations pursuant to the Clean Air Act ("CAA").  The government
had alleged in a federal court lawsuit that the refinery's Total Annual Benzene
releases exceeded the limitation of 10 megagrams per year, and as a result, the
refinery was in violation of the benzene waste emission control, record keeping,
and reporting requirements.  The consent decree was approved by the court on
July 26, 2001 and requires Marathon and MAP to pay a combined $1.6 million civil
penalty, perform $125,000 in supplemental environmental projects, as part of an
enforcement action for alleged CAA violations, and install various controls and
other improvements.

     In 1998, the EPA conducted multi-media inspections of MAP's Detroit and
Robinson refineries, covering compliance with the CAA, the Clean Water Act,
reporting obligations under the Emergency Planning and Community Right to Know
Act, CERCLA and the handling of process waste.  The EPA served a number of
Notices of Violation ("NOV") and Findings of Violation as a result of these
inspections but these allegations were resolved as part of the New Source Review
("NSR") global consent decree which MAP agreed to on May 11, 2001.  MAP's
settlement with the EPA includes all of MAP's refineries and commits MAP to
specific control technologies and implementation schedules for approximately
$270 million in environmental capital expenditures and improvements to MAP's
refineries over approximately an eight year period that are consistent with
MAP's current capital spending plans.  It also commits MAP to payment of an
aggregate civil penalty in the amount of $3.8 million and the performance of
about $8 million in supplemental environmental projects, as part of an
enforcement action for alleged CAA violations.  MAP believes that this
settlement will provide MAP with increased permitting and operating flexibility
while achieving significant emission reductions.  The court approved this
consent decree on August 28, 2001.
     
     In 2000, the Kentucky Natural Resources and Environmental Cabinet sent
Marathon Ashland Pipe Line LLC a NOV seeking a civil penalty associated with a
pipeline spill earlier that year in Winchester, Kentucky.  MAP has settled this
NOV in concept for a $170,000 penalty and reimbursement of past response costs
up to $131,000.  A final administrative order resolving this matter is expected
in the fourth quarter 2001.

<PAGE> 111

Part II - Other Information (Continued):
----------------------------------------
Item 1. LEGAL PROCEEDINGS (Continued)

U. S. Steel Group

Environmental Proceedings

     The Berks Associates/Douglassville Site ("Berks Site") is situated on a 50-
acre parcel located on the Schuylkill River in Berks County, Pa.  Used oil and
solvent reprocessing operations were conducted on the Berks Site between 1941
and 1986.  In September 1997, USX signed a consent decree to conduct a
feasibility study at the site relating to the alternative remedy.  In 1999, a
new Record of Decision was approved by the EPA and the U.S. Department of
Justice ("DOJ").  On January 19, 2001, USX signed a consent decree with the EPA
to remediate this site.  On April 6, 2001, USX paid $0.4 million for costs
associated with this site.  The only remaining outstanding claim is the natural
resource damages claim filed by the Commonwealth of Pennsylvania.

     In 1987, the California Department of Health Services ("DHS") issued a
remedial action order for the GBF/Pittsburg landfill near Pittsburg, California.
DHS alleged that from 1972 through 1974, Pittsburg Works arranged for the
disposal of approximately 2.6 million gallons of waste oil, sludge, caustic mud
and acid, which were eventually taken to this landfill for disposal.  In 2000,
the parties reached a buyout arrangement with a third party remediation firm,
whereby the firm agreed to take title to and remediate the site and also
indemnify the PRPs.  This commitment was backed by pollution insurance.  USX's
share to participate in the buyout was approximately $1.1 million.  Payment of
the USX buyout amount was made December 2000.  Title to the site was transferred
to the remediation firm on January 31, 2001.

     In 1987, USX and the PA Department of Environmental Resources ("PADER")
entered into a consent Order to resolve an incident in January 1985 involving
the alleged unauthorized discharge of benzene and other organic pollutants from
Clairton Works in Clairton, Pa. That consent Order required USX to pay a penalty
of $50,000 and a monthly payment of $2,500 for five years. In 1990, USX and the
PADER reached agreement to amend the consent Order. Under the amended Order, USX
agreed to remediate the Peters Creek Lagoon (a former coke plant waste disposal
site); to pay a penalty of $300,000; and to pay a monthly penalty of up to
$1,500 each month until the former disposal site is closed. Remediation costs
have amounted to $9.8 million with another $1.2 million presently projected to
complete the project.

     In 1988, USX and three other potential responsible parties agreed to the
issuance of an administrative order by the EPA to undertake emergency removal
work at the Municipal & Industrial Disposal Co. site in Elizabeth Township, Pa.
The cost of such removal, which has been completed, was approximately
$4.2 million, of which USX paid $3.4 million. The EPA indicated that further
remediation of this site would be required. In October 1991, the PADER placed
the site on the Pennsylvania State Superfund list and began a Remedial
Investigation ("RI") which was issued in 1997. USX's share of any final
allocation formula for cleanup of the entire site was never determined; however,
based on presently available information, USX may have been responsible for as
much as 70% of the waste material deposited at the site.

<PAGE> 112

Part II - Other Information (Continued):
----------------------------------------
Item 1. LEGAL PROCEEDINGS (Continued)

U. S. Steel Group (Continued)

Environmental Proceedings (Continued)

The PA Department of Environmental Protection ("PADEP"), formerly PADER, issued 
its Final Feasibility Study Report for the entire site in August 2001.  The 
report identifies and evaluates feasible remedial alternatives and selects three
preferred alternatives.  These alternatives are estimated to cost from
$17 million to $20 million.  Consultants for United States Steel have concluded
that a less costly alternative should be employed at the site, which is
estimated to cost $5.5 million. Based on the allocation of liability that has
been recognized for past site cleanup activities, the United States Steel share
of costs for this remedy would be approximately $3.7 million.

     In November 2000, a NOV was issued by the Jefferson County Health
Department ("JCHD") alleging violation of the Halogenated Solvent National
Emission Standards for Hazardous Air Pollutants and the JCHD Volatile Organic
Compound ("VOC") regulations at the sheet mill stretch leveler at Fairfield
Works.  U. S. Steel Group proposed a civil penalty of $100,000 and a VOC
emission limit, which have been agreed to by JCHD.  A consent order was executed
and approved by the court in May 2001.  The penalty was paid by U. S. Steel
Group in June 2001.

     In September 2001, USX agreed to an Administrative Order on Consent with
the State of North Carolina for the assessment and cleanup of a Greensboro, NC
fertilizer manufacturing site.  The site was owned by Armour Agriculture
Chemical Company (now named Viad) from 1912 to 1968.  USX owned the site from
1968 to 1986 and sold the site to LaRoche Industries in 1986.  The agreed order
allocated responsibility for assessment and cleanup costs as follows:  Viad -
48%, USX - 26% and LaRoche - 26%; and LaRoche was appointed to be the lead party
responsible for conducting the cleanup.  In March 2001 USX was notified that
LaRoche had filed for protection under the Bankruptcy law.  On August 23, 2001,
the allocation of responsibility for this site assessment and cleanup and the
cost allocation was approved by the bankruptcy court in the LaRoche Bankruptcy.
The estimated remediation costs are $4.4 million to $5.7 million.  USX's
estimated share of these costs is $1.6 million.

<PAGE> 113

Part II - Other Information (Continued):
----------------------------------------


Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     A special meeting of stockholders was held October 25, 2001.  In connection
     with the meeting, a proxy/prospectus was solicited pursuant to the
     Securities Exchange Act.  The following are the voting results on proposals
     considered and voted upon at the meeting, all of which were described in
     the proxy statement/prospectus:
                 Marathon Group                                 
                   Shares and         Marathon Group    U. S. Steel Group
                U. S. Steel Group         Shares             Shares
                     Shares            Voting as a         Voting as a
               Voting as a Single     Separate Class     Separate Class
                      Class
                                                                 
                         % of                 % of               % of
                         Votes                Votes              Votes
                Votes    Outstand    Votes    Outstand   Votes   Outstand
                           ing                  ing                ing
                                                                 
Proposal #1                                                      
     For       279,391,003 76.0%  238,030,651  77.0%  63,338,977  71.0%
     Against-  
     Cast        5,224,311  1.4%    2,242,773   0.7%   4,565,908   5.1%
     Against-  
     Not Cast   81,324,323 22.1%   67,723,442  21.9%  20,828,302  23.4%
     Abstain     1,572,969  0.5%    1,270,551   0.4%     463,121   0.5%
               367,512,606100.0%  309,267,417 100.0%  89,196,308 100.0%
                                                                 
                           % of                                    % of
                Votes      Votes                         Votes    Votes
                 Cast      Cast                          Cast      Cast
Proposal #2                                                      
     For      232,852,846  82.7%                      55,474,812  82.2%
     Against   48,865,261  17.3%     Not Applicable   12,034,885  17.8%
     Abstain     Not Applicable                         Not Applicable
              281,718,107 100.0%                      67,509,697 100.0%
                                                                 
Proposal #3                                                      
     For      262,091,927  93.2%                      61,613,805  91.3%
     Against   19,218,154   6.8%     Not Applicable    5,888,805   8.7%
     Abstain     Not Applicable                         Not Applicable
              281,310,081 100.0%                      67,502,610 100.0%
                                                                 
Proposal #4                                                      
     For      148,417,296  56.5%                                  
     Against  114,451,196  43.5%     Not Applicable     Not Applicable
     Abstain     Not Applicable                                 
              262,868,492 100.0%                                
                                                                
                 Votes               Votes               Votes       
               Outstanding        Outstanding         Outstanding     
Marathon       
Group          309,267,417        309,267,417              -       
U. S. Steel    
Group           58,245,189  (A)             -          89,196,308   (B)
Total Votes                                                       
Outstanding    367,512,606 100.0% 309,267,417 100.0%   89,196,308  100.0%
Total Votes                                                       
Received       286,188,283  77.9% 241,543,975  78.1%   68,368,006   76.6%

Proposal #1   Approval and adoption of the Agreement and Plan of
    Reorganization.
Proposal #2   Approval of the United States Steel Corporation 2002 Stock Plan.
Proposal #3    Approval of the United States Steel Corporation Senior Executive
          Officer Incentive Compensation Plan.
Proposal #4   Adjournment of the Special Meeting.
(A)  89,196,308 U. S. Steel Group shares at 0.653 votes per share.
(B)  89,196,308 U. S. Steel Group shares at 1.000 votes per share.

<PAGE> 114

Part II - Other Information (Continued):
----------------------------------------


Item 5.  OTHER INFORMATION

     Marathon Group
     
      SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF MARATHON OIL COMPANY
                               Supplementary Data
      ---------------------------------------------------------------------
                                   (Unaudited)

The following summarized consolidated financial information of Marathon Oil
Company, a wholly owned subsidiary of USX, is included in this Form 10-Q in
satisfaction of the reporting obligation of Marathon which has debt securities
registered under the Securities Exchange Act.  All such securities are
guaranteed by USX.

                                                (In millions)
                                       -------------------------------
                                         Third Quarter   Nine Months
                                             Ended          Ended
                                          September 30   September 30
                                           2001   2000    2001   2000
                                           ----   ----    ----   ----
INCOME DATA:
Revenues and other income                $8,335  $9,229$26,246$25,793
Income from operations                      583     741  2,785  2,140
Net income                                  171     107  1,297    724



                                                       (In millions)
                                                    --------------------
                                                 September 30December 31
                                                     2001       2000
                                                 -----------------------
BALANCE SHEET DATA:
Assets:
Current assets                                      $7,256    $7,397
Noncurrent assets                                   10,927    10,135
                                                    ------    ------
Total assets                                        $18,183  $17,532
                                                    ======    ======

Liabilities and Stockholder's Equity:
Current liabilities                                 $4,264    $3,951
Noncurrent liabilities                               6,914     8,110
Preferred stock of subsidiary                            -         9
Minority interest in income of Marathon 
  Ashland Petroleum LLC                              2,029     1,840
Stockholder's equity                                 4,976     3,622
                                                    ------    ------
Total liabilities and stockholder's equity          $18,183  $17,532
                                                    ======    ======

<PAGE> 115

Part II - Other Information (Continued):
----------------------------------------


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a) EXHIBITS

       2.1  Agreement and Plan of Reorganization,
            dated as of July 31, 2001, by and between
            USX Corporation (to be renamed
            Marathon Oil Corporation) and United
            States Steel LLC (to be converted into
            United States Steel Corporation)      Incorporated by reference to 
                                                  Annex A of United States Steel
                                                  LLC's Registration Statement 
                                                  on Form S-4 filed on 
                                                  September 7, 2001.
       3.1 Amended and Restated Limited Liability
            Company Operating Agreement of United States
            Steel LLC                            Incorporated by reference to
                                                  Exhibit 3.1 of United States
                                                  Steel LLC's Registration
                                                  Statement on Form S-4 filed
                                                  September 7, 2001.
       10.1 Completion and Retention Agreement, dated
            as of August 8, 2001, between USX
            Corporation, United States Steel LLC and
            Thomas J. Usher                      Incorporated by reference to
                                                  Exhibit 10.10 of United States
                                                  Steel LLC's Registration
                                                  Statement on Form S-4/A filed
                                                  September 20, 2001.

       10.2Retention Agreement, dated as of September
            14, 2001, between United States Steel LLC
            and Dan D. Sandman                   Incorporated by reference to
                                                  Exhibit 10.11 of United States
                                                  Steel LLC's Registration
                                                  Statement on Form S-4/A filed
                                                  September 20, 2001.

       10.3Form of Change of Control Agreement
            between USX Corporation and Various
            Officers                             Incorporated by reference to
                                                  Exhibit 10.12 of United States
                                                  Steel LLC's Registration
                                                  Statement on Form S-4/A filed
                                                  September 20, 2001.

       12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
            Preferred Stock Dividends

       12.2 Computation of Ratio of Earnings to Fixed Charges

<PAGE> 116

Part II - Other Information (Continued):
----------------------------------------

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K (Continued)

   (b) REPORTS ON FORM 8-K

       Form 8-K dated July 2, 2001, reporting under Item 5. Other Events, that
       on July 2, 2001, USX Corporation completed a corporate reorganization to
       implement a new holding company structure.
     
       Form 8-K dated July 13, 2001, reporting under Item 9. Regulation FD
       Disclosure, that USX Corporation is furnishing information under
       Regulation FD for the July 13, 2001 press release titled "U. S. Steel
       Group Sees Results Improved Over First Quarter".

       Form 8-K dated July 31, 2001, reporting under Item 5. Other Events, that
       USX Corporation is furnishing information for the July 31, 2001 press
       release titled "USX Announces Board Approval of Plan of Reorganization
       and Identification of Directors for Marathon Oil Corporation and United
       States Steel Corporation Effective January 1, 2002".
     
       Form 8-K dated August 1, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the August 1, 2001
       press release titled "Surma Named Assistant to Chairman of USX".
     
       Form 8-K dated August 2, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the August 2, 2001
       press release titled "Marathon Names Five New Officers in Preparation
       for USX Reorganization".
     
       Form 8-K dated August 6, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the August 6, 2001
       press release titled "Four Financial Posts Identified for United States
       Steel".
     
       Form 8-K dated August 14, 2001, reporting under Item 9., Regulation FD
       Disclosure, that USX Corporation is furnishing information under
       Regulation FD for the August 14, 2001 press release titled "U. S. Steel
       Permanently Closing Most Fairless Facilities".
     
       Form 8-K dated August 23, 2001, reporting under Item 9., Regulation FD
       Disclosure, that USX Corporation is furnishing information under
       Regulation FD for the August 23, 2001 press release titled "Marathon and
       YUKOS to form a strategic alliance for international growth".
       
       Form 8-K dated October 12, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the October 12, 2001
       press release titled "United States Steel Announces Filing for Exchange
       Offer".
     
       Form 8-K dated October 22, 2001, as amended, reporting under Item 5.
       Other Events, that USX Corporation is furnishing information for the
       October 22, 2001 USX-Marathon Group and USX-U. S. Steel Group Earnings
       Releases.
     

<PAGE> 117

Part II - Other Information (Continued):
----------------------------------------
     
   (b) REPORTS ON FORM 8-K
     
       Form 8-K dated October 25, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the October 25, 2001
       press release titled "USX Shareholders Approve Plan of Reorganization".
     
       Form 8-K dated November 2, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the November 2, 2001
       press release titled "Marathon continues international growth strategy;
       announces plans to acquire interests in Equatorial Guinea, West Africa".
       
       Form 8-K dated November 5, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the November 5, 2001
       press release titled "USX Capital LLC Calls Its MIPS".
     
       Form 8-K dated November 7, 2001, reporting under Item 5. Other Events,
       that USX Corporation is furnishing information for the November 7, 2001
       press release titled "United States Steel To Commence Exchange Offers".
     

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned chief accounting officer thereunto duly authorized.

      USX CORPORATION


      By /s/ Larry G. Schultz
          Larry G. Schultz
          Vice President -
             Accounting

November 9, 2001






                                                                    Exhibit 12.1

                                        
                                 USX CORPORATION
           COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                          AND PREFERRED STOCK DIVIDENDS
                      TOTAL ENTERPRISE BASIS - (Unaudited)
                              CONTINUING OPERATIONS
           ----------------------------------------------------------
                              (Dollars in Millions)
                                        
                             Nine Months
                                Ended       Year Ended December 31
                             September 30--------------------------------
                             2001  2000  2000  1999   1998 1997  1996
                             ----  ----  ----  ----   ---- ----  ----
Portion of rentals
  representing interest       $71   $74  $100   $95   $105  $82   $78
Capitalized interest           20    12    19    26     46   31    11
Other interest and fixed
  charges                     213   281   375   365    318  352   428
Pretax earnings which would
  be required to cover
  preferred stock dividend
  requirements of parent        9     9    12    14     15   20    37
                             ----  ----  ----  ----   ---- ----  ----
Combined fixed charges
  and preferred stock
  dividends (A)               $313 $376  $506  $500   $484 $485  $554
                              ==== ====  ====  ====   ==== ====  ====
Earnings-pretax income
  with applicable
  adjustments (B)            $2665$2483 $1920 $2098  $1671$1761 $1887
                              ==== ====  ====  ====   ==== ====  ====

Ratio of (B) to (A)           8.51 6.60  3.79  4.20   3.45 3.63  3.41
                              ==== ====  ====  ====   ==== ====  ====





                                                                    Exhibit 12.2
                                                                                
                                                                                
                                 USX CORPORATION
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                      TOTAL ENTERPRISE BASIS - (Unaudited)
                              CONTINUING OPERATIONS
                -------------------------------------------------
                              (Dollars in Millions)
                                        
                             Nine Months
                                Ended       Year Ended December 31
                             September 30--------------------------------
                             2001  2000  2000  1999   1998 1997  1996
                             ----  ----  ----  ----  ----- ----  ----
Portion of rentals
  representing interest       $71   $74  $100   $95   $105  $82   $78
Capitalized interest           20    12    19    26     46   31    11
Other interest and fixed
  charges                     213   281   375   365    318  352   428
                             ----  ----  ----  ----   ---- ---- -----
Total fixed charges (A)      $304  $367  $494  $486   $469 $465  $517
                             ====  ====  ====  ====   ==== ====  ====
Earnings-pretax income
  with applicable
  adjustments (B)           $2665 $2483 $1920 $2098  $1671$1761 $1887
                             ====  ====  ====  ====   ==== ====  ====
Ratio of (B) to (A)          8.77  6.77  3.89  4.32   3.56 3.79  3.65
                             ====  ====  ====  ====   ==== ====  ====