FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____ to _____.
Commission file number 1-13105.
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below: Arch Coal, Inc. and Subsidiaries Employee
Thrift Plan.
B. Name of issuer of the securities to be held pursuant to the plan and the
address of its principal executive office: Arch Coal, Inc., Suite 300,
CityPlace One, St. Louis, Missouri 63141.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Pension Committee of
Arch Coal, Inc.:
We have audited the accompanying financial statements of the Arch Coal, Inc.
and Subsidiaries Employee Thrift Plan (the Plan) as of December 31, 1996 and
1995, and for the year ended December 31, 1996, as listed in the accompanying
table of contents. These financial statements and the schedules referred to
below are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules, as listed in the
accompanying table of contents, are presented for purposes of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
St. Louis, Missouri,
July 11, 1997
<PAGE>
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Participant-Directed
- -----------------------------------------------------------------------------------------------------------------
Intermediate High
Government Select Yield Total Industrial
Bond Income Bond Return Income
Fund Fund Fund Fund Fund
---------------- --------------- ----------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS: --
Investments at fair value-
Intermediate Government
Bond Fund 8,323,729 $ -- $ -- $ -- $ --
Select Income Fund -- 7,030,008 -- -- --
High Yield Bond Fund -- -- 2,046,421 -- --
Total Return Fund -- -- -- 14,231,068 --
Industrial Income Fund -- -- -- -- 11,578,106
Dynamics Fund -- -- -- -- --
International Growth Fund -- -- -- -- --
Emerging Growth Fund -- -- -- -- --
Capital Preservation Fund -- -- -- -- --
Loans to participants -- -- -- -- --
--------- --------- --------- ---------- ----------
Total investments 8,323,729 7,030,008 2,046,421 14,231,068 11,578,106
--------- --------- --------- ---------- ----------
Receivables-
Loan payments -- -- -- -- --
Participant contributions 22,500 17,388 6,495 35,958 21,523
Employer contributions 16,154 11,205 3,935 23,239 12,967
--------- --------- --------- ---------- ----------
Total receivables 38,654 28,593 10,430 59,197 34,490
--------- --------- --------- ---------- ----------
Total assets 8,362,383 7,058,601 2,056,851 14,290,265 11,612,596
LIABILITIES:
Administrative expenses
payable (2,828) (2,389) (695) (4,835) (3,934)
--------- --------- --------- ---------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS $ 8,359,555 $ 7,056,212 $ 2,056,156 $14,285,430 $11,608,662
========= ========= ========= ========== ==========
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 (CONT'D)
Nonparticipant-
Participant-Directed Directed
- ------------------------------------------------------------------------------------------------------- ----------- -------------
International Emerging Capital
Dynamics Growth Growth Preservation Loan
Fund Fund Fund Fund Fund Total
----------------- ------------- ---------------- ------------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS: -- -- -- --
Investments at fair value-
Intermediate Government
Bond Fund $ -- $ -- $ -- $ -- $ -- $ 8,323,729
Select Income Fund -- -- -- -- -- 7,030,008
High Yield Bond Fund -- -- -- -- -- 2,046,421
Total Return Fund -- -- -- -- -- 14,231,068
Industrial Income Fund -- -- -- -- -- 11,578,106
Dynamics Fund 8,851,312 -- -- -- -- 8,851,312
International Growth Fund -- 1,780,162 -- -- -- 1,780,162
Emerging Growth Fund -- -- 2,521,986 -- -- 2,521,986
Capital Preservation Fund -- -- -- 21,018,056 -- 21,018,056
Loans to participants -- -- -- -- 4,750,950 4,750,950
--------- --------- --------- ---------- --------- ----------
Total investments 8,851,312 1,780,162 2,521,986 21,018,056 4,750,950 82,131,798
--------- --------- --------- ---------- --------- ----------
Receivables-
Loan payments -- -- -- -- 75,006 75,006
Participant contributions 24,550 5,620 6,387 47,255 -- 187,676
Employer contributions 14,635 3,258 3,512 31,691 -- 120,596
--------- --------- --------- -------- -------- ---------
Total receivables 39,185 8,878 9,899 78,946 75,006 383,278
---------- --------- -------- ---------- --------- ----------
Total assets 8,890,497 1,789,040 2,531,885 21,097,002 4,825,956 82,515,076
LIABILITIES:
Administrative expenses
payable (3,007) (605) (857) (7,141) (1,024) (27,315)
--------- --------- --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $8,887,490 $1,788,435 $ 2,531,028 $21,089,861 $4,824,932 $82,487,761
========= ========= ========= ========== ========= ==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Participant-Directed
- ----------------------------------------------------------------------------------------------------------------------
Intermediate High
Government Select Yield Total Industrial
Bond Income Bond Return Income
Fund Fund Fund Fund Fund
---------------- --------------- ----------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS: -- --
Investments at fair value-
Intermediate Government
Bond Fund $ 9,345,145 $ -- $ -- $ -- $ --
Select Income Fund -- 7,376,373 -- -- --
High Yield Bond Fund -- -- 1,687,505 -- --
Total Return Fund -- -- -- 13,179,418 --
Industrial Income Fund -- -- -- -- 9,816,362
Dynamics Fund -- -- -- -- --
International Growth Fund -- -- -- -- --
Emerging Growth Fund -- -- -- -- --
Capital Preservation Fund -- -- -- -- --
Loans to participants -- -- -- -- --
--------- --------- --------- ---------- ---------
Total investments 9,345,145 7,376,373 1,687,505 13,179,418 9,816,362
--------- --------- --------- ---------- ---------
Receivables-
Loan payments -- -- -- -- --
Participant contributions 17,716 14,136 4,763 24,975 16,970
Employer contributions 12,846 9,402 2,958 16,509 10,201
--------- --------- --------- ---------- ---------
Total receivables 30,562 23,538 7,721 41,484 27,171
--------- --------- --------- ---------- ---------
Total assets 9,375,707 7,399,911 1,695,226 13,220,902 9,843,533
LIABILITIES:
Administrative expenses
payable (3,048) (2,406) (550) (4,299) (3,202)
--------- --------- --------- ---------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS $ 9,372,659 $ 7,397,505 $ 1,694,676 $ 13,216,603 $ 9,840,331
========= ========= ========= ========== =========
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 (CONT'D)
Nonparticipant-
Participant-Directed Directed
- ---------------------------------------------------------------------------------------------------- -------------- -------------
International Emerging Capital
Dynamics Growth Growth Preservation Loan
Fund Fund Fund Fund Fund Total
----------------- ------------- ---------------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS: -- --
Investments at fair value-
Intermediate Government
Bond Fund $ -- $ -- $ -- $ -- $ -- $ 9,345,145
Select Income Fund -- -- -- -- -- 7,376,373
High Yield Bond Fund -- -- -- -- -- 1,687,505
Total Return Fund -- -- -- -- -- 13,179,418
Industrial Income Fund -- -- -- -- -- 9,816,362
Dynamics Fund 6,653,075 -- -- -- -- 6,653,075
International Growth Fund -- 1,446,630 -- -- -- 1,446,630
Emerging Growth Fund -- -- 796,555 -- -- 796,555
Capital Preservation Fund -- -- -- 21,733,137 -- 21,733,137
Loans to participants -- -- -- -- 4,623,242 4,623,242
--------- --------- --------- ---------- ---------- -----------
Total investments 6,653,075 1,446,630 796,555 21,733,137 4,623,242 76,657,442
--------- --------- --------- ---------- ---------- -----------
Receivables-
Loan payments -- -- -- -- 45,803 45,803
Participant contributions 13,499 4,371 1,289 36,917 -- 134,636
Employer contributions 8,254 2,599 741 23,465 -- 86,975
--------- --------- --------- ---------- ---------- ----------
Total receivables 21,753 6,970 2,030 60,382 45,803 267,414
--------- --------- --------- ---------- ---------- ----------
Total assets 6,674,828 1,453,600 798,585 21,793,519 4,669,045 76,924,856
LIABILITIES:
Administrative expenses
payable (2,170) (472) (260) (7,089) (382) (23,878)
--------- --------- --------- ---------- --------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS $ 6,672,658 $ 1,453,128 $ 798,325 $ 21,786,430 $ 4,668,663 $ 76,900,978
========= ========= ======= ========= ========= ===========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Participant-Directed
- ----------------------------------------------------------------------------------------------------------------------
Intermediate High
Government Select Yield Total Industrial
Bond Income Bond Return Income
Fund Fund Fund Fund Fund
---------------- ------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
ADDITIONS: -- -- --
Investment income-
Net appreciation
(depreciation)in fair
value of investments $ (379,948) $ (218,456) $ 73,771 $ 1,142,739 $ 603,331
Dividends 482,952 535,473 171,559 534,911 1,062,618
Interest on loans 44,418 31,718 10,022 61,811 40,437
Loans issued (349,084) (221,242) (78,608) (446,371) (266,483)
Loan principal payments 250,565 161,555 56,753 372,364 221,752
Participant contributions 648,521 500,735 187,552 1,039,798 620,331
Participant rollovers 18,679 24,264 16,086 23,709 31,531
Employer contributions 450,157 310,534 107,212 645,209 356,965
--------- --------- --------- ---------- ----------
Total additions 1,166,260 1,124,581 544,347 3,374,170 2,670,482
--------- --------- --------- ---------- ----------
DEDUCTIONS:
Benefits paid to participants (1,102,534) (788,630) (179,465) (1,738,552) (946,298)
Administrative expenses (3,127) (1,546) (742) (4,018) (2,285)
Other -- -- -- (169) --
--------- --------- --------- ---------- ---------
Total deductions (1,105,661) (790,176) (180,207) (1,742,739) (948,583)
--------- --------- --------- ---------- ---------
TRANSFERS (FROM) TO FUNDS (1,073,703) (675,698) (2,660) (562,604) 46,432
--------- --------- --------- --------- ---------
Net increase (decrease) (1,013,104) (341,293) 361,480 1,068,827 1,768,331
NET ASSETS AVAILABLE FOR
BENEFITS, beginning
of year 9,372,659 7,397,505 1,694,676 13,216,603 9,840,331
--------- --------- --------- ---------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $ 8,359,555 $ 7,056,212 $ 2,056,156 $ 14,285,430 $11,608,662
========= ========= ========= ========== ==========
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996 (CONT'D)
Nonparticipant-
Participant-Directed Directed
- ------------------------------------------------------------------------------------------------------- ----------- ------------
International Emerging Capital
Dynamics Growth Growth Preservation Loan
Fund Fund Fund Fund Fund Total
------------ ------------- -------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS: -- -- --
Investment income-
Net appreciation
(depreciation) in fair
value of investments $ 312,007 $ 101,069 $ 2,931 $ 1,326,279 $ -- $ 2,963,723
Dividends 817,456 91,406 104,108 -- -- 3,800,483
Interest on loans 35,753 8,103 6,716 103,842 -- 342,820
Loans issued (325,699) (55,542) (43,805) (763,301) 2,550,135 --
Loan principal payments 227,375 47,571 40,191 538,740 (1,916,866) --
Participant contributions 713,442 162,046 187,829 1,362,382 29,203 5,451,839
Participant rollovers 36,830 6,526 21,604 2,619 -- 181,848
Employer contributions 405,769 90,023 100,610 951,137 -- 3,417,616
--------- --------- --------- --------- ---------- ----------
Total additions 2,222,933 451,202 420,184 3,521,698 662,472 16,158,329
--------- --------- --------- --------- ---------- ----------
DEDUCTIONS:
Benefits paid to participants (690,493) (140,383) (97,233) (4,301,601) (504,662) (10,489,851)
Administrative expenses (3,011) (468) (964) (57,717) (642) (74,520)
Other (5,873) -- -- (234) (899) (7,175)
--------- --------- --------- --------- --------- ----------
Total deductions (699,377) (140,851) (98,197) (4,359,552) (506,203) (10,571,546)
--------- --------- --------- --------- ---------- ----------
TRANSFERS (FROM) TO FUNDS 691,276 24,956 1,410,716 141,285 -- --
--------- --------- --------- --------- ---------- ----------
Net increase
(decrease) 2,214,832 335,307 1,732,703 (696,569) 156,269 5,586,783
NET ASSETS AVAILABLE FOR
BENEFITS, beginning
of year 6,672,658 1,453,128 798,325 21,786,430 4,668,663 76,900,978
--------- --------- --------- ---------- --------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $ 8,887,490 $ 1,788,435 $ 2,531,028 $ 21,089,861 $ 4,824,932 $ 82,487,761
========= ========= ========= ========== ========= ==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE>
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1996 AND 1995
1. PLAN DESCRIPTION:
The following description of the Arch Coal, Inc. and Subsidiaries Employee
Thrift Plan (the Plan) (formerly known as the Arch Mineral Corporation Employee
Thrift Plan), is provided for general information purposes only. More complete
information regarding the Plan's provisions may be found in the plan document.
General
The Plan is a defined contribution plan established by Arch Coal, Inc. and
affiliates (the Employer) under the provisions of Section 401(a) of the Internal
Revenue Code (IRC), which includes a qualified deferred arrangement as described
in Section 401(k) of the IRC, for the benefit of eligible salaried and nonunion
hourly employees. All hourly employees received separate benefits under a
subordinate plan, the Retirement Savings Plan, until July 1, 1992, when they
were given the same benefits as salaried employees. The Plan was amended and
restated during 1994. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA), as amended.
The Employer is the plan administrator. A Pension Committee oversees the
activities of the Plan as agent of the Employer. INVESCO Retirement Plan
Services (INVESCO) is the Plan's trustee. Benefit Services Corp. is the Plan's
record keeper.
Plan Amendment
During 1995, the Plan's payroll deferral provisions were revised for employees
of Paint Creek Terminal, Inc. and the Ridgeline Mine.
Contributions
Participants may contribute up to 16% of gross wages, as defined by the Plan.
The Employer contributes an amount equal to 100% of the first 6% contributed by
each participant. Participants and the Employer contribute biweekly.
Ridgeline Mine employees may contribute only up to 10% of gross wages, as
defined by the Plan. The Employer contributes an amount equal to 100% of the
first 2% contributed by each Ridgeline Mine participant. The Ridgeline Mine
closed in September 1996.
Vesting
Participants are fully vested in their contributions and all earnings. Vesting
in employer matching contributions is based on years of continuous service. A
participant vests according to the following schedule:
Years of Service Vested Percentage
Less than 2 years 0%
More than 2 but less than 3 25%
More than 3 but less than 4 50%
More than 4 but less than 5 75%
5 years or more 100%
<PAGE>
-2-
All participants are automatically fully vested in the case of death, total
disability or at retirement age, regardless of the number of months of
participation.
Forfeitures of terminated participants' nonvested accounts are used to reduce
the Employer's future contributions. Restoration of such forfeitures to
reemployed participants is made in accordance with the Plan's provisions. During
the year ended December 31, 1996, $79,801 of forfeitures were used to reduce
employer contributions.
Benefits
Upon termination of service due to death, disability or retirement, a
participant may elect to receive an amount equal to the value of the
participant's vested interest in his or her account. The form of payment is a
lump-sum distribution. Effective July 1, 1996, a participant who is disabled or
eligible for retirement may elect to receive payment in installments. The
minimum installment allowed is $500 and installments are paid quarterly,
semiannually or annually.
Participant Accounts
Individual accounts are maintained for each of the Plan's participants to
reflect the participant's share of the Plan's income, the Employer's
contribution and the participant's contribution. Allocations are based on
participant account balances, as defined.
Loans to Participants
Participants who have been in the Plan for at least 12 months may borrow a
portion of their account in accordance with the provisions of the Plan. No loan
shall be made if, immediately after the loan, the unpaid balance of all loans to
the participant would exceed the lesser of:
(A) $50,000
(B) 50% of the vested portion of the participant's account.
Notwithstanding the foregoing:
(C) The $50,000 limitation in (A) above shall be reduced by the highest
outstanding loan balance for the one-year period ending on the day
before a new loan is made less the outstanding balance of the loans on
the date of the new loan.
Loans are secured by assignment of the participant's account and the
participant's collateral promissory note for the amount of the loan. Interest
rates are based on the prime rate on the first working day of the month in which
the loans are taken.
Investment Options
Participants direct contributions, including employer matching contributions,
into nine investment options in 1% increments. Participants may change their
investment elections daily. A description of each investment option is provided
below:
Intermediate Government Bond Fund
The fund invests primarily in obligations of the United States government
and government agencies and instrumentalities maturing in three to five
years.
<PAGE>
-3-
Select Income Fund
At least 50% of the fund's assets are invested in investment grade debt
securities. The balance of the fund is invested in corporate bonds rated
below investment grade.
High Yield Bond Fund
The fund invests primarily in higher yielding corporate bonds (including
convertible issues) and preferred stocks with medium to lower credit
ratings. The Plan does not allow participants to invest more than 25% of
their accounts in this fund.
Total Return Fund
The fund invests 30% in equities and 30% in fixed and variable income
securities. The remaining 40% of the portfolio will vary in asset
allocation.
Industrial Income Fund
The fund may invest up to 100% of its assets in equities of domestic
industrial issuers. A minimum of 90% of the equity investments must be in
dividend-paying common stocks. The remaining assets are invested in other
income-producing securities, mostly corporate bonds.
Dynamics Fund
The fund invests in common stocks of companies traded on U.S. securities
exchanges and over-the-counter. The fund may also invest in preferred stocks
and convertible or straight issues of debentures, as well as foreign
securities.
International Growth Fund
The fund normally invests at least 65% of its assets in foreign equity
securities representing at least three different countries outside of the
United States. Issuers have more than 50% of their assets located outside
the United States or earn more than 50% of their gross income outside the
United States. The Plan does not allow participants to invest more than 25%
of their accounts in this fund.
Emerging Growth Fund
The fund normally invests at least 65% of its assets in equity securities of
smaller companies whose capitalization is below $1 billion. The balance of
the fund's assets may be invested in the equity securities of companies with
market capitalizations in excess of $1 billion, debt securities and
short-term investments. The Plan does not allow participants to invest more
than 25% of their accounts in this fund.
Capital Preservation Fund
The fund invests in long-term guaranteed insurance contracts issued by a
variety of insurance carriers, the I.T.C. Stable Value Fund and cash
equivalents. The guaranteed insurance contracts included in this fund had
average yields of 8.44% and 8.25% for the years ended December 31, 1996 and
1995, respectively. The crediting interest rates were 8.82% and 8.27%, as of
December 31, 1996 and 1995, respectively. The fair values of the guaranteed
insurance contracts were $3,188,469 and $4,956,164 at December 31, 1996 and
1995.
<PAGE>
- 4 -
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of
accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions to and deductions from net assets available
for benefits during the reporting period. Actual results could differ from these
estimates.
Investment Valuation
Investments of the Plan are stated at fair value. Securities traded in public
markets are valued at their quoted market prices. Guaranteed insurance contracts
included in the Capital Preservation Fund are valued at contract value.
The difference between cost and market value from one period to the next is
recognized as net appreciation in fair value of investments in the accompanying
statement of changes in net assets available for benefits.
Administrative Expenses
The Employer pays the salaries and related benefits of employees who administer
the Plan. Effective July 1, 1996, participants pay for loan, withdrawal and
distribution fees. All other administrative expenses are paid by the Plan.
3. INCOME TAX STATUS:
The Internal Revenue Service issued a determination letter dated August 9, 1996,
stating that the Plan was in accordance with applicable design requirements for
amendments adopted through March 6, 1995. The Plan has been amended since March
6, 1995. However, the plan administrator believes that the Plan is currently
designed and operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, the plan administrator believes that the Plan
was qualified and the related trust was tax-exempt as of the financial statement
date.
4. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Employer has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions set forth in ERISA. In the event of Plan
termination, participants will become fully vested in their accounts. The net
assets of the Plan will be allocated to provide benefits to participants as
prescribed by ERISA.
5. RECONCILIATION TO FORM 5500:
As of December 31, 1996 and 1995, the Plan had $136,455 and $848,667,
respectively, of pending distributions to participants who elected either a
withdrawal or final payment of their benefits from the Plan. These amounts are
recorded as a liability in the Plan's Form 5500; however, these amounts are not
recorded as a liability in the statements of net assets available for benefits
in accordance with generally accepted accounting principles.
<PAGE>
- 5 -
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company for the year ended
December 31, 1996:
<TABLE>
<CAPTION>
Participant
Termination Net Assets
Benefits and Available
Payable to Withdrawal for
Participants Payments Benefits
------------- ------------ --------------
<S> <C> <C> <C>
Per financial statements $ -- $ 10,489,851 $ 82,487,761
Accrued benefit payments - December
31, 1996 136,455 136,455 (136,455)
Accrued benefit payments - December
31, 1995 -- (848,667) --
------- ----------- ----------
Per Form 5500 $ 136,455 $ 9,777,639 $ 82,351,306
======= =========== ==========
</TABLE>
6. SUBSEQUENT EVENT:
On July 1, 1997, a wholly owned subsidiary of Arch Mineral Corporation and
Ashland Coal, Inc. (Ashland) merged, and Arch Mineral Corporation changed its
name to Arch Coal, Inc. In connection with the merger, Arch Coal, Inc. common
stock was registered with the Securities and Exchange Commission and now trades
on the New York Stock Exchange. On July 1, 1997, an amendment to the Plan became
effective to add the common stock of Arch Coal, Inc. as an investment option.
The Plan and similar plans at Ashland and its Coal Mac, Inc. and Mingo Logan
Coal Company subsidiaries will continue to exist as separate plans through
December 31, 1997. The management of Arch Coal, Inc. intends to merge the four
plans effective January 1, 1998. Although the specific plan design is not known
as of this date, it is anticipated the new plan will very closely resemble the
Plan.
<PAGE>
SCHEDULE I
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Number of
Identity Shares or Current
of Issuer Description of Investment Par Value Cost Value
--------------- ---------------------------------- ------------- --------- ----------
<S> <C> <C> <C> <C>
Mutual funds:
*INVESCO Trust
Company Intermediate Government Bond Fund 668,036 $ 8,412,262 $ 8,323,729
*INVESCO Trust
Company Select Income Fund 1,073,284 6,966,793 7,030,008
*INVESCO Trust
Company High Yield Bond Fund 288,228 1,986,684 2,046,421
*INVESCO Trust
Company Total Return Fund 585,640 11,479,769 14,231,068
*INVESCO Trust
Company Industrial Income Fund 860,186 10,372,753 11,578,106
*INVESCO Trust
Company Dynamics Fund 686,681 8,482,755 8,851,312
*INVESCO Trust
Company International Growth Fund 107,045 1,701,879 1,780,162
*INVESCO Trust
Company Emerging Growth Fund 201,437 2,487,814 2,521,986
*PRIMCO Capital
Management Capital Preservation Fund 19,060,539 19,491,505 21,018,056
---------- ----------
71,382,214 77,380,848
*Arch Coal, Inc. Loans to participants, at prime
rate $4,750,950 4,750,950 4,750,950
---------- ----------
$ 76,133,164 $ 82,131,798
========== ==========
*Represents a party-in-interest for the year ended December 31, 1996.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE>
SCHEDULE II
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS(a)
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Purchases Sales
-------------------- --------------------------------------------------
Net
Identity Description of No. of No. of Sales (Loss)/
of Issuer Investment Trans. Cost Trans. Price Cost Gain
------------- --------------- ------- ----- ------- ----- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
*INVESCO Trust Intermediate
Company Government
Bond Fund 286 $ 1,719,796 282 $ 2,845,227 $ 2,846,847 $ (1,620)
*INVESCO Trust
Company
Total Return Fund 334 3,354,368 293 3,982,014 3,291,403 690,611
*INVESCO Trust
Company Industrial
Income Fund 320 2,490,380 269 2,395,827 2,082,080 313,747
*INVESCO Trust
Company
Dynamics Fund 350 3,651,506 271 2,584,225 2,303,506 280,719
*PRIMCO Capital Capital
Management Preservation
Fund 354 6,712,801 336 8,754,179 8,315,846 438,333
(a) Represents transactions or a series of transactions in excess of 5% of the
fair value of plan assets at the beginning of the year.
*Represents a party-in-interest for the year ended December 31, 1996.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
duly authorized Plan Administrator has executed this annual report.
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
Date: July 31, 1997 By: /s/ Teresa A. Daniel
---------------------
Teresa A. Daniel,
Plan Administrator
