SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 1, 1998
ASHLAND INC.
(Exact name of registrant as specified in its charter)
Kentucky
(State or other jurisdiction of incorporation)
1-2918 61-0122250
(Commission File Number) (I.R.S. Employer
Identification No.)
1000 Ashland Drive, Russell, Kentucky 41169
(Address of principal executive offices) (Zip Code)
P.O. Box 391, Ashland, Kentucky 41114
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code (606) 329-3333
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Item 5. Other Events
On June 1, 1998, Arch Coal, Inc. (Arch Coal) announced that it had
completed the acquisition of Atlantic Richfield Company's (ARCO)
domestic coal operations for approximately $1.14 billion. The
transaction will be financed entirely with debt using new credit
facilities.
Completion of the transaction creates a new joint venture called
Arch Western Resources, LLC (Arch Western Resources), owned 99% by Arch
Coal and 1% by ARCO. Arch Western Resources will account for all of
Arch Coal's operating activity west of the Mississippi River. The
Registrant owns approximately 55% of Arch Coal's issued and outstanding
shares. The foregoing summary of the attached press release is
qualified in its entirely by the complete text of such document, a copy
of which is attached hereto.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated June 1, 1998.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
ASHLAND INC.
(Registrant)
Date: June 1, 1998
Name: Thomas L. Feazell
Title: Senior Vice President,
General Counsel and Secretary
Exhibit Index
Exhibit No.
99.1 Press Release dated June 1, 1998.
News from
Arch Coal, Inc.
FOR FURTHER INFORMATION:
David G. Todd Deck S. Slone
Vice President Manager
External Affairs Communications and
(304) 526-3755 Public Affairs
(314) 994-2717
FOR IMMEDIATE RELEASE
June 1, 1998
ARCH COAL COMPLETES ACQUISITION OF
ATLANTIC RICHFIELD'S DOMESTIC COAL OPERATIONS
St. Louis, MO -- Arch Coal, Inc. (NYSE:ACI) announced today that
it has completed the acquisition of Atlantic Richfield's domestic coal
operations for approximately $1.14 billion. The transaction makes Arch Coal
the nation's second largest coal producer with expected coal sales of
nearly 110 million tons annually, annual revenues of about $2 billion, and
a reserve base of approximately 3.4 billion tons.
"We believe this transaction will create substantial long-term
value for our shareholders," said Steven F. Leer, president and chief
executive officer. "With the addition of the ARCO properties, we can now
supply a wide range of coal products in a cost-competitive manner to
virtually every major coal-fired power plant in the United States."
"We will now turn our full attention to integrating these new
operations into Arch Coal," Leer added. "We have a strong track record of
successful integration efforts and a great deal of experience operating
large-scale surface and longwall mines such as those we have just acquired.
Furthermore, the men and women at these mines have demonstrated that they
share our commitment to operating in a safe, highly productive and
environmentally responsible manner. For these reasons, we expect a quick
and efficient integration process."
The completion of the transaction creates a new joint venture
called Arch Western Resources, LLC. Arch Western Resources is comprised of
the former ARCO Coal Company properties in Wyoming, Colorado and Utah, as
well as properties Arch Coal owned and operated in southern Wyoming. Arch
has a 99% interest in the new joint venture and ARCO has a 1% interest.
Arch Western Resources will account for all of Arch Coal's operating
activity west of the Mississippi River.
The transaction will be financed entirely with debt using new
credit facilities that became effective today. As part of these new credit
facilities, Arch Coal terminated its existing credit facilities and
redeemed $35.7 million in senior notes. The termination of these agreements
will result in a $2.4 million pre-tax charge in the second quarter of 1998.
"One great strength of the expanded company is its ability to
generate strong levels of cash flow," Leer said. "We plan to use free cash
flow both to fund additional growth and to pay down debt in a steady and
aggressive fashion." In 1997 on a pro forma combined basis, Arch Coal and
ARCO's domestic coal operations generated more than $400 million in
earnings from operations before the effects of changes in accounting
principles, non-recurring charges, interest, taxes, depreciation, depletion
and amortization (EBITDA).
EBITDA is presented because it is a widely accepted financial
indicator of a company's ability to incur and service debt. EBITDA should
not be considered in isolation or as an alternative to net income,
operating income, cash flows from operations or as a measure of a company's
profitability, liquidity or performance under generally accepted accounting
principles. Certain matters discussed within this press release are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Although Arch Coal, Inc. believes the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will
be attained. Factors that could cause actual results to differ materially
from expectations include financial performance, changes in local or
national economic conditions, and other risks detailed from time to time in
the Company's SEC reports, including quarterly reports on Form 10-Q,
reports on Form 8-K, and annual reports on Form 10-K.
Arch Coal is the nation's second largest coal producer with
subsidiary operations in West Virginia, Kentucky, Virginia, Illinois,
Wyoming, Colorado and Utah. Through these operations, Arch Coal provides
the fuel for approximately 6% of the nation's electric power generation.
