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ASHLAND COAL, INC. REPORTS THIRD QUARTER TAX EFFECTS

 HUNTINGTON, W.Va., Sept. 30 /PRNewswire/ -- Ashland Coal, Inc. (NYSE: ACI) reported today that its earnings for the third quarter of 1993 will reflect a reduction in income tax expense of approximately $50 million.
 This adjustment arose principally because Ashland Coal has elected to deduct for federal tax purposes the amortization of goodwill associated with the April 1992 acquisition of Dal-Tex Coal Corporation. This amortization was not previously deductible, but the deduction is now permitted as the result of the recently enacted Omnibus Budget Reconciliation Act of 1993.
 However, the positive earnings impact of the tax adjustment will be partially offset by other factors. As previously reported, the United Mine Workers of America earlier this year commenced a strike against certain independent operating subsidiaries of Ashland Coal. This strike has continued throughout the third quarter and has had a significant adverse effect on results of operations. In addition, Ashland Coal expects to take a $6 million net-of-tax charge against income in the third quarter for certain prepaid royalties, the recoverability of which has become doubtful.
 Although the tax adjustment will not significantly affect cash flow in 1993, cash flow in future years will be enhanced because of lower income tax payments. Additionally, future earnings may be reduced somewhat because of lower percentage depletion due to the deduction of the amortization.
 Dal-Tex Coal Corporation is an independent operating subsidiary of Ashland Coal, Inc.
 Ashland Coal, Inc. is engaged in the mining, processing and sale of low-sulfur coal, and markets its coal principally to electric utilities in the eastern United States and into the export market.
 -0- 9/30/93
 /CONTACT: David G. Todd, vice president, of Ashland Coal, 304-526-3755/
 (ACI)


CO: Ashland Coal, Inc.; Dal-Tex Coal Corporation; United Mine
 Workers of America ST: West Virginia IN: MNG OIL SU:


KC-DS -- PG004 -- 7147 09/30/93 09:12 EDT
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Publication:PR Newswire
Date:Sep 30, 1993
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