FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____.
Commission file number 1-9993.
A. Full title of the plan and the address of the plan, if
different from that of the issuer named
below: Ashland Coal, Inc. 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:
Ashland Coal, Inc., 2205 Fifth Street Road, Huntington, West
Virginia 25701.
1<PAGE>
Financial Statements and Exhibits
Financial Statements and Schedules
Report of Independent Auditors. . . . . . . . . . 3
Statements of Financial Condition, with Fund Information 4
Statements of Income and Changes in Plan Equity, with
Fund Information . . . . . . . . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . 7
Schedule of Assets Held for Investment Purposes . 11
Schedule of Reportable Transactions . . . . . . . 12
Exhibits
24 - The consent of Ernst & Young LLP, independent
auditors . . . . . . . . . . . . . . . . . . . . 15
2<PAGE>
Report of Independent Auditors
To the Administrator
Ashland Coal, Inc. Employee Thrift Plan
We have audited the accompanying statements of financial
condition of the Ashland Coal, Inc. Employee Thrift Plan as of
December 31, 1996 and 1995, and the related statements of income
and changes in plan equity for the years then ended. These
financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements 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 financial position
of the Plan at December 31, 1996 and 1995, and the income and
changes in plan equity for the years then ended, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
accompanying supplemental schedules of assets held for investment
purposes as of December 31, 1996 and reportable transactions for
the year then ended are presented for purposes of complying with
the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974 and are not a required part of the basic financial
statements. The Fund Information in the statements of financial
condition and the statements of income and changes in plan equity
is presented for purposes of additional analysis rather than to
present the financial condition and income and changes in plan
equity of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures
applied in our 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.
April 4, 1997 /s/ERNST & YOUNG LLP
3<PAGE>
<TABLE>
<CAPTION>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
STATEMENTS OF FINANCIAL CONDITION, WITH FUND INFORMATION
December 31, 1996
Ashland Coal,
Inc. Ashland Inc. Twentieth Twentieth
Common Common Century Century
Stock Stock Growth Ultra
Total Fund Fund Investors Investors
<S> <C> <C> <C> <C> <C>
ASSETS
Cash $9,733 $9,702 $31 $- $-
Investments
Ashland Coal, Inc.
Common Stock
(cost - $2,324,418) 2,466,531 2,466,531 - - -
Ashland Inc. Common
Stock (cost -
$230,037) 293,480 - 293,480 - -
Twentieth Century
Growth Investors
(cost - $2,001,103) 1,971,847 - - 1,971,847 -
Twentieth Century
Ultra Investors
(cost - $2,420,202) 2,542,921 - - - 2,542,921
Twentieth Century
Vista Investors
(cost - $2,076,090) 1,999,938 - - - -
Twentieth Century
Balanced Investors
(cost - $1,113,466) 1,100,293 - - - -
Twentieth Century
U.S. Governments
Intermediate - Term
Bond (cost -
$869,858) 859,030 - - - -
Twentieth Century
Value (cost -
$2,579,183) 2,798,170 - - - -
Twentieth Century
International Equity
(cost - $1,087,430) 1,125,353 - - - -
Stable Value
Government Fund
(cost - $7,065,425) 7,065,425 - - - -
BZW Barclays Global
Investors Equity
Index (cost -
$1,839,359) 2,335,542 - - - -
Amounts due from
participating
employees and employer
Employees 100,962 3,703 - 8,283 11,229
Employer 43,419 1,588 - 3,557 4,848
Notes receivable from
employees 275,501 - - - -
PLAN EQUITY $24,988,145 $2,481,524 $293,511 $1,983,687 $2,558,998
See accompanying notes.
BZW
Twentieth Barclays
Twentieth Twentieth Century U.S. Twentieth Stable Global
Century Century Governments Twentieth Century Value Investors Participant
Vista Balanced Intermediate - Century International Government Equity Loan
Investors Investors Term Bond Value Equity Fund Index Fund
<C> <C> <C> <C> <C> <C> <C> <C>
$- $- $- $- $- $- $- $-
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
1,999,938 - - - - - - -
- 1,100,293 - - - - - -
- - 859,030 - - - - -
- - - 2,798,170 - - - -
- - - - 1,125,353 - - -
- - - - - 7,065,425 - -
- - - - - - 2,335,542 -
9,687 4,031 8,946 20,436 8,929 11,331 14,387 -
4,154 1,745 3,834 8,765 3,832 4,926 6,170 -
- - - - - - - 275,501
$2,013,779 $1,106,069 $871,810 $2,827,371 $1,138,114 $7,081,682 $2,356,099 $275,501
</TABLE>
4<PAGE>
<TABLE>
<CAPTION>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
STATEMENTS OF FINANCIAL CONDITION, WITH FUND INFORMATION
December 31, 1995
Ashland Coal,
Inc. Ashland Inc. Twentieth Twentieth
Common Common Century Century
Stock Stock Growth Ultra
Total Fund Fund Investors Investors
<S> <C> <C> <C> <C> <C>
ASSETS
Cash $56,426 $49,246 $7,180 $- $-
Investments
Ashland Coal, Inc.
Common Stock (cost -
$2,207,059) 1,882,551 1,882,551 - - -
Ashland Inc. Common
Stock (cost -
$450,608) 873,839 - 873,839 - -
Twentieth Century
Growth Investors
(cost - $1,754,385) 1,500,692 - - 1,500,692 -
Twentieth Century
Ultra Investors
(cost - $2,438,310) 2,424,894 - - - 2,424,894
Twentieth Century
Vista Investors
(cost - $1,702,520) 1,648,194 - - - -
Twentieth Century
Balanced Investors
(cost - $970,522) 948,146 - - - -
Twentieth Century
U.S. Governments
Intermediate - Term
Bond (cost - $856,554) 880,034 - - - -
Twentieth Century
Value (cost -
$1,842,896) 1,844,499 - - - -
Twentieth Century
International
Equity (cost -
$747,156) 777,351 - - - -
Stable Value
Government Fund
(cost - $5,882,737) 5,882,737 - - - -
BZW Barclays Global
Investors Equity
Index (cost -
$1,306,803) 1,442,870 - - - -
Amounts due from
participating
employees and
employer
Employees 73,970 4,648 - 8,280 11,321
Employer 37,314 2,345 - 4,177 5,711
Notes receivable from
employees 207,011 - - - -
PLAN EQUITY $20,480,528 $1,938,790 $881,019 $1,513,149 $2,441,926
See accompanying notes.
BZW
Twentieth Barclays
Twentieth Twentieth Century U.S. Twentieth Stable Global
Century Century Governments Twentieth Century Value Investors Participant
Vista Balanced Intermediate - Century International Government Equity Loan
Investors Investors Term Bond Value Equity Fund Index Fund
<C> <C> <C> <C> <C> <C> <C> <C>
$- $- $- $- $- $- $- $-
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
1,648,194 - - - - - - -
- 948,146 - - - - - -
- - 880,034 - - - - -
- - - 1,844,499 - - - -
- - - - 777,351 - - -
- - - - - 5,882,737 - -
- - - - - - 1,442,870 -
8,769 4,592 2,484 9,165 5,022 12,135 7,554 -
4,423 2,316 1,253 4,623 2,533 6,122 3,811 -
- - - - - - - 207,011
$1,661,386 $955,054 $883,771 $1,858,287 $784,906 $5,900,994 $1,454,235 $207,011
</TABLE>
5PAGE
<PAGE>
<TABLE>
<CAPTION>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY, WITH FUND INFORMATION
Ashland Coal,
Inc. U.S. Ashland Inc. Twentieth
Common Investment Government Diversified Common Century
Stock Contract Securities Equity Stock Growth
Total Fund Fund Fund Fund Fund Investors
<S> <C> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1996
Additions to net assets
attributed to:
Net investment income
Interest and dividend income $1,311,153 $42,668 $- $- $- $22,000 $37,759
Net appreciation (depreciation)
in fair value of investments 1,760,130 567,373 - - - 192,367 206,174
3,071,283 610,041 - - - 214,367 243,933
Less investment management fees (1,969) (161) - - - - (119)
3,069,314 609,880 - - - 214,367 243,814
Employee contributions 2,101,750 129,234 - - - - 233,452
Employer contributions 973,334 60,980 - - - - 106,473
3,075,084 190,214 - - - - 339,925
Total additions 6,144,398 800,094 - - - 214,367 583,739
Withdrawals (1,755,565) (177,865) - - - (45,124) (57,675)
Net increase (decrease) prior to
transfers 4,388,833 622,229 - - - 169,243 526,064
Transfers from an affiliated
company's plan 118,784 11,299 - - - - 12,631
Interfund transfers (net) - (90,794) - - - (756,751) (68,157)
Net increase (decrease) in plan
equity 4,507,617 542,734 - - - (587,508) 470,538
Plan equity at beginning of year 20,480,528 1,938,790 - - - 881,019 1,513,149
Plan equity at end of year $24,988,145 $2,481,524 $- $- $- $293,511 $1,983,687
Year ended December 31, 1995
Additions to net assets
attributed to:
Net investment income (loss)
Interest and dividend income $1,371,379 $40,456 $399,600 $98 $196 $28,105 $205,301
Net appreciation (depreciation)
in fair value of investments (132,184) (603,569) (37,006) 103,622 605,138 16,257 (269,358)
1,239,195 (563,113) 362,594 103,720 605,334 44,362 (64,057)
Less investment management fees (1,076) (121) - - - - (75)
1,238,119 (563,234) 362,594 103,720 605,334 44,362 (64,132)
Employee contributions 1,705,980 208,828 469,316 99,165 207,296 - 89,873
Employer contributions 838,673 110,238 242,149 48,352 96,730 - 40,898
2,544,653 319,066 711,465 147,517 304,026 - 130,771
Total additions 3,782,772 (244,168) 1,074,059 251,237 909,360 44,362 66,639
Withdrawals (1,104,670) (60,655) (360,684) (27,963) (49,828) (1,675) (5,809)
Net increase (decrease) prior to
interfund transfers 2,678,102 (304,823) 713,375 223,274 859,532 42,687 60,830
Interfund transfers (net) - (85,623)(11,105,710) (1,718,316) (3,566,143) (40,870) 1,452,319
Net increase (decrease) in
plan equity 2,678,102 (390,446)(10,392,335) (1,495,042) (2,706,611) 1,817 1,513,149
Plan equity at beginning of year 17,802,426 2,329,236 10,392,335 1,495,042 2,706,611 879,202 -
Plan equity at end of year $20,480,528 $1,938,790 $- $- $- $881,019 $1,513,149
See accompanying notes.
BZW
Twentieth Barclays
Twentieth Twentieth Twentieth Century U.S. Twentieth Stable Global
Century Century Century Governments Twentieth Century Value Investors Participant
Ultra Vista Balanced Intermediate - Century International Government Equity Loan
Investors Investors Investors Term Bond Value Equity Fund Index Fund
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$143,569 $150,183 $107,876 $62,249 $273,837 $115,085 $335,901 $116 $19,910
180,245 (15,887) 10,977 (42,902) 241,847 16,226 524 403,186 -
323,814 134,296 118,853 19,347 515,684 131,311 336,425 403,302 19,910
(351) (105) (177) (42) (101) (67) (636) (210) -
323,463 134,191 118,676 19,305 515,583 131,244 335,789 403,092 19,910
329,292 256,715 126,648 82,240 240,768 162,456 327,600 213,345 -
152,730 110,514 57,589 38,951 103,907 69,980 170,167 102,043 -
482,022 367,229 184,237 121,191 344,675 232,436 497,767 315,388 -
805,485 501,420 302,913 140,496 860,258 363,680 833,556 718,480 19,910
(496,925) (107,019) (39,953) (153,855) (99,468) (67,283) (407,343) (92,353) (10,702)
308,560 394,401 262,960 (13,359) 760,790 296,397 426,213 626,127 9,208
16,594 13,986 7,404 4,039 11,897 11,683 3,191 26,060 -
(208,082) (55,994) (119,349) (2,641) 196,397 45,128 751,284 249,677 59,282
117,072 352,393 151,015 (11,961) 969,084 353,208 1,180,688 901,864 68,490
2,441,926 1,661,386 955,054 883,771 1,858,287 784,906 5,900,994 1,454,235 207,011
$2,558,998 $2,013,779 $1,106,069 $871,810 $2,827,371 $1,138,114 $7,081,682 $2,356,099 $275,501
$112,924 $110,402 $71,391 $31,554 $174,100 $734 $196,207 $260 $51
(37,416) (66,925) (28,461) 19,212 (5,998) 21,285 3,704 147,331 -
75,508 43,477 42,930 50,766 168,102 22,019 199,911 147,591 51
(90) (95) (39) (80) (76) (38) (377) (85) -
75,418 43,382 42,891 50,686 168,026 21,981 199,534 147,506 51
122,740 99,787 48,372 25,639 77,801 64,335 126,422 66,406 -
57,801 43,902 23,076 12,595 35,680 27,352 66,423 33,477 -
180,541 143,689 71,448 38,234 113,481 91,687 192,845 99,883 -
255,959 187,071 114,339 88,920 281,507 113,668 392,379 247,389 51
(73,969) (9,329) (594) (12,680) (24,098) (21,537) (430,077) (25,772) -
181,990 177,742 113,745 76,240 257,409 92,131 (37,698) 221,617 51
2,259,936 1,483,644 841,309 807,531 1,600,878 692,775 5,938,692 1,232,618 206,960
2,441,926 1,661,386 955,054 883,771 1,858,287 784,906 5,900,994 1,454,235 207,011
- - - - - - - - -
$2,441,926 $1,661,386 $955,054 $883,771 $1,858,287 $784,906 $5,900,994 $1,454,235 $207,011
</TABLE>
6<PAGE>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
The accounts of the Ashland Coal, Inc. Employee Thrift Plan
(the Plan) are maintained on the accrual basis of accounting.
Contributions from employees and related employer contributions
are recorded when the employer makes payroll deductions from Plan
participants.
Investments are accounted for at market value based on the
closing market price for investments traded on an exchange, on
bid price for other listed investments and at cost (which
approximates market) for investment contracts and short-term
investment funds. The cost of investments disposed of is
determined on the basis of average historical cost.
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 revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2-CHANGE OF TRUSTEE
The Chase Manhattan Bank, N.A. (successor to U.S. Trust Company)
was appointed as the Plan's Trustee to hold the Plan's
investments under a trust agreement effective August 1, 1995.
Prior to that time Key Trust Company of Ohio, N.A. (formerly
Society National Bank) was the Trustee and held the Plan's
investments under a trust agreement.
NOTE 3-DESCRIPTION OF THE PLAN
The Plan was established as a savings and retirement plan
covering eligible employees of Ashland Coal, Inc. (Ashland Coal)
and its participating subsidiaries.
Subject to applicable limitations, participating employees may
contribute an amount up to 16% of their salaries or wages to the
Plan, on either a before- or after-tax basis. Ashland Coal and
its participating subsidiaries currently contribute an amount
equal to 70% of the amount of "Basic Contributions". "Basic
Contributions" are amounts contributed by employees up to 6% of
their salaries or wages.
Investment income (or loss), less investment management fees, is
allocated to participants' accounts on the basis of each
participant's proportionate interest in the fund. The value of
the fund and the value of each participant's interest will
fluctuate with the market value of the securities in which the
fund is invested.
For all of 1996 and 1995, participants of the Plan had the
following funds in which their balances could be invested:
Ashland Coal, Inc. Funds are invested in Ashland Coal's
Common Stock common stock.
Fund
7<PAGE>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 3-DESCRIPTION OF THE PLAN--Continued
Ashland Inc. Funds are invested in common stock of Ashland
Common Stock Inc. These funds represent funds which were
Fund invested in certain Ashland Inc. benefit plans
prior to being transferred to the Plan. Except
for similar transfers, no other amounts under
the Plan may be invested in this fund. Beginning
in March 1990, investment income earned by
participants from this fund is allocated to the
participants' other investment funds
proportionately based on the participants'
current investment elections.
Prior to August 1, 1995, participants of the Plan also had the
following funds in which their balances could be invested:
Investment Contract Funds were invested in a portfolio of
Fund investment contracts with a number of
insurance companies. The principal
amount invested in the fund was
guaranteed by the insurance companies,
but there was no predetermined fixed
interest rate over a specified period.
These funds were invested in the Ashland
Inc. Collective Investment Trust.
U.S. Government Funds were invested in a common trust
Securities Fund fund, which was invested in obligations
of the United States Government and its
agencies and instrumentalities with
maximum maturities of four years.
Diversified Equity Funds were invested in a common trust
Fund fund, which was invested primarily in
common stocks of large, well capitalized
corporations.
Subsequent to July 31, 1995, in addition to the Ashland Coal,
Inc. and Ashland Inc. Common Stock Funds, employees also have the
following funds in which their balances may be invested:
Twentieth Century An equity fund that seeks capital growth
Growth Investors over time by investing in common stocks
considered by Twentieth Century
Services, Inc.(Twentieth Century) to
have better-than-average prospects for
appreciation. Stocks in Growth's
portfolio are not required to pay
dividends.
Twentieth Century An aggressive equity fund that seeks
Ultra Investors capital growth over time by investing in
common stocks considered by Twentieth
Century to have better-than-average
prospects for appreciation. Ultra
typically invests in small- to
medium-sized companies.
Twentieth Century An aggressive equity fund that seeks
Vista Investors capital growth over time by investing in
common stocks considered by Twentieth
Century to have better-than-average
prospects for appreciation.
8<PAGE>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 3-DESCRIPTION OF THE PLAN--Continued
Twentieth Century A balanced fund that seeks capital
Balanced Investors growth and current income by investing
approximately 60% of its assets in
growth stocks and the remainder in
fixed income securities. This
combination of equity and fixed income
investments is designed to provide
investors with current income as they
invest for growth.
Twentieth Century The fund invests in securities issued by
U.S. Governments the U.S. government and its agencies,
Intermediate-Term including mortgage-backed securities.
Bond The weighted average maturity of the
fund is between three and ten years.
Twentieth Century A conservative equity fund that seeks
Value long-term capital growth. Income is a
secondary objective. To pursue its
objective, the fund invests primarily in
equity securities of well-established
companies that are believed by Twentieth
Century to be undervalued at the time of
purchase.
Twentieth Century The fund seeks capital growth over time
International Equity by investing in common stocks of
foreign companies considered by
Twentieth Century to have better-than-
average prospects for appreciation. To
find the best opportunitites for growth,
the fund spreads its investments across
many countries and continents. The fund
may invest in U.S. companies when
circumstances warrant, but its primary
purpose is to diversify investments
across a broad range of overseas
companies.
Stable Value The fund seeks to provide current
Government Fund income, while maintaining a stable share
price. From August 1, 1995 to July 31,
1996 this fund was invested exclusively
in BT Pyramid Stable Value Government
Fund, which attempted to provide
investors with yields that are higher
than money market funds and certificates
of deposit, as well as to provide a
relatively predictable annual return.
Subsequent to July 31, 1996, the fund is
invested in the Benham Stable Value
Government Fund (Benham Fund) and the
funds assets were transferred to the
Benham Fund effective August 1, 1996.
The investment objective of the Benham
Fund is to earn current income that is
relatively consistent over time, while
preserving capital and relative
stability of principal.
BZW Barclays The fund seeks the long-term capital
Global Investors appreciation potential of large capital-
Equity Index ization Blue Chip stocks while
minimizing risk through broad diversifi-
cation. The fund invests in BZW Barclays
Global Investors Equity Index Fund E, a
highly diversified portfolio of the
stocks included in the Standard & Poor's
500 Composite Stock Price Index (S&P
500 Index).
9<PAGE>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 3-DESCRIPTION OF THE PLAN--Continued
Ashland Coal has the right to discontinue its contributions at
any time or to terminate the Plan. In the event of a termination
of the Plan, the Plan and related trust shall be continued until
such time as all accounts have been fully distributed, at which
time the Plan and trust shall terminate.
Information about benefits and other provisions of the Plan are
contained in its summary plan description, copies of which are
available from Ashland Coal.
NOTE 4-TAX STATUS OF THE PLAN
To its best knowledge and belief, Ashland Coal believes the
Plan is being operated in compliance with all applicable laws and
that the Plan was qualified and the related trust was tax-exempt
as of the financial statement date.
The most recent favorable determination letter pertaining to
the Plan was dated February 25, 1997. That letter confirmed that
the provisions of the Plan document, as amended and restated
effective August 1, 1995 (including certain proposed amendments
submitted to the Internal Revenue Service on September 16, 1996
and February 17, 1997), were in compliance with the applicable
requirements of the Internal Revenue Code. The determination
letter is subject to the adoption of all proposed amendments by
May 26, 1997. Ashland Coal contemplates adopting the proposed
amendments on or before such date. Except for the amendments
submitted to the Internal Revenue Service upon which the
favorable determination was conditioned, no other amendments to
the Plan have been proposed or adopted since the 1997
determination letter was issued.
NOTE 5-TRANSACTIONS WITH PARTIES-IN-INTEREST
Ashland Coal engages the services of a third party service
provider to assist it in carrying out certain administrative and
record keeping functions under the Plan. All expenses of
administering the Plan are paid by Ashland Coal. The Plan is not
charged for administrative services performed on its behalf by
Ashland Coal.
NOTE 6 - SUBSEQUENT EVENT
On April 4, 1997, Ashland Coal and Arch Mineral Corporation
(Arch) signed a definitive agreement to merge the two companies
in a tax-free reorganization. After the merger, Ashland Coal
and Arch stockholders will hold approximately 48 percent and 52
percent of the combined company, respectively. The combined
company will be named Arch Coal, Inc. (Arch Coal). Consummation
of the merger, which is subject to approval by Ashland Coal's
stockholders, is expected to occur about July 1, 1997. On the
effective date of the merger, the Plan will be amended to provide
for a new Arch Coal common stock investment option and all
outstanding Ashland Coal shares held in the Plan will be
converted to Arch Coal stock.
10<PAGE>
<TABLE>
<CAPTION>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
EIN #61-0880012
PLAN NUMBER 010
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
Description of Investment,
Identity of Issue, Borrower, Including Maturity Date, Rate Current
Lessor or Similar Party of Interest, Par or Maturity Value Cost Value
<S> <C> <C> <C>
Common Stocks:
Ashland Coal, Inc.* 88,884 shares $2,324,418 $2,466,531
Ashland Inc. 6,689 shares 230,037 293,480
2,554,455 2,760,011
Mutual Funds:
Twentieth Century Growth Investors 90,121 shares 2,001,103 1,971,847
Twentieth Century Ultra Investors 90,528 shares 2,420,202 2,542,921
Twentieth Century Vista Investors 137,832 shares 2,076,090 1,999,938
Twentieth Century Balanced Investors 63,748 shares 1,113,466 1,100,293
Twentieth Century U.S. Governments
Intermediate-Term Bond 88,743 shares 869,858 859,030
Twentieth Century Value 424,609 shares 2,579,183 2,798,170
Twentieth Century International Equity 141,376 shares 1,087,430 1,125,353
BZW Barclays Global Investors Equity
Index 135,945 shares 1,839,359 2,335,542
13,986,691 14,733,094
Trust Funds:
Stable Value Government Fund 7,065,425 shares 7,065,425 7,065,425
Participant Loans Prime + 1% 275,501 275,501
$23,882,072 $24,834,031
* Indicates party-in-interest to the Plan.
</TABLE>
11<PAGE>
<TABLE>
<CAPTION>
ASHLAND COAL, INC. EMPLOYEE THRIFT PLAN
EIN #61-0880012
PLAN NUMBER 010
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Year Ended December 31, 1996
Current
Value of
Expenses Asset on Net
Identity of Purchase Selling Incurred with Cost of Transaction Gain
Party Involved Description of Asset Price Price Transaction Asset Date (Loss)
Category (iii)--Series of transactions in excess of 5% of plan assets
<S> <C> <C> <C> <C> <C> <C> <C>
Twentieth Century Twentieth Century
Growth Investors $500,420 $- Net $500,420 $500,420 N/A
Twentieth Century
Growth Investors - 285,735 Net 303,998 285,735 $(18,263)
Twentieth Century
Ultra Investors 849,217 - Net 849,217 849,217 N/A
Twentieth Century
Ultra Investors - 1,071,222 Net 1,027,216 1,071,222 44,006
Twentieth Century
Vista Investors 701,229 - Net 701,229 701,229 N/A
Twentieth Century
Vista Investors - 497,699 Net 491,760 497,699 5,939
Twentieth Century
Balanced Investors 332,143 - Net 332,143 332,143 N/A
Twentieth Century
Balanced Investors - 306,107 Net 304,333 306,107 1,774
Twentieth Century
U.S. Governments
Intermediate - Term
Bond 504,956 - Net 504,956 504,956 N/A
Twentieth Century
U.S. Governments
Intermediate - Term
Bond - 549,334 Net 557,927 549,334 (8,593)
Twentieth Century
Value 685,182 - Net 685,182 685,182 N/A
Twentieth Century
Value - 258,813 Net 234,560 258,813 24,253
Twentieth Century
International Equity 353,821 - Net 353,821 353,821 N/A
Twentieth Century
International Equity - 148,764 Net 140,267 148,764 8,497
Stable Value
Government Fund 2,110,587 - Net 2,110,587 2,110,587 N/A
Stable Value
Government Fund - 1,266,484 Net 1,266,484 1,266,484 None
BZW Barclays Global
Investors Equity
Index 798,792 - Net 798,792 798,792 N/A
BZW Barclays Global
Investors Equity
Index - 335,341 Net 292,272 335,341 43,069
Note: There were no category (i), (ii) or (iv) reportable transactions during the year ended December 31, 1996.
</TABLE>
12<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the duly authorized Plan Administrator has executed this
annual report.
ASHLAND COAL, INC.
EMPLOYEE THRIFT PLAN
Date: June 20, 1997 By: /s/ Teresa A. Daniel
Teresa A. Daniel,
Plan Administrator
13<PAGE>
INDEX TO EXHIBITS
Exhibit Item Page
24 Consent of Independent Auditors 15
14<PAGE>
Exhibit 24
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8, No. 33-26549) pertaining to the Ashland
Coal, Inc. Employee Thrift Plan and in the related Prospectus of
our report dated April 4, 1997, with respect to the financial
statements and schedules of the Ashland Coal, Inc. Employee
Thrift Plan included in this Annual Report (Form 11-K) for the
year ended December 31, 1996.
/s/ERNST & YOUNG LLP
Louisville, Kentucky
June 18, 1997
15<PAGE>
