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ASHLAND COAL REPORTS EARNINGS FOR FIRST QUARTER OF 1993

 HUNTINGTON, W.Va., April 21 /PRNewswire/ -- Ashland Coal, Inc. (NYSE: ACI) reported today that before adjustments for the cumulative effects of required changes in accounting it earned $1.5 million, or $.06 a share on a fully diluted basis, for the first quarter ended March 31, 1993.
 For the same quarter last year, net income was $7.3 million, or $.41 a share. After the cumulative effects of the accounting changes, Ashland Coal experienced a loss of $17.3 million, or $1.05 per share, for the first quarter. Revenues for the first quarter were $138.2 million, as compared to $110.8 million in the first quarter of 1992.
 Effective Jan. 1, 1993, Ashland Coal adopted both Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," and SFAS No. 109, "Accounting for Income Taxes." SFAS No. 106 requires employers to recognize the costs of postretirement benefits other than pensions over the service periods of the employees covered. These costs are primarily medical benefits provided to retirees. In connection with the adoption of SFAS No. 106, Ashland Coal immediately recognized an accumulated postretirement benefit obligation of $40.9 million ($25.3 million net of tax) at Jan. 1, 1993. This $25.3 million after-tax charge was partially offset by SFAS No. 109's $6.5 million adjustment for the cumulative effect of the change in accounting for income taxes related to years prior to 1993. SFAS No. 106 and SFAS No. 109 reduced income before income taxes by $1.6 million and $.5 million respectively, in the first quarter of 1993 and are expected to decrease income before income taxes for the year by approximately $6.1 million and $2.4 million, respectively.
 "The first quarter of 1993 was a particularly difficult one for Ashland Coal," noted William C. Payne, chairman of the board, president and chief executive office. "Although production and sales volumes increased significantly over last year's first quarter because of the acquisition of Dal-Tex Coal Corporation in April 1992, earnings suffered because of continued weak market conditions and increased mining costs," Payne continued.
 Although sales under long-term contracts were up significantly, the average contract price per ton was down in the first quarter of 1993 as a result of the Dal-Tex contracts, new contracts at Mingo Logan Coal Company and the renegotiation of one of the contracts supplied by Hobet Mining, Inc. In addition, although prices in Ashland Coal's spot markets improved slightly year over year, the proportion of its shipments in the CSX market -- Ashland Coal's lowest-priced spot market -- increased substantially, causing the average spot price to fall. Finally, export prices fell in the first quarter. These reduced selling prices were responsible for $.88 per ton of the year-to-year decrease in margin on coal sales.
 At the same time, increased costs of coal sold caused margins to decrease an additional $.78 per ton. Ashland Coal's operating subsidiaries have experienced unusually high costs for a variety of reasons. Dal-Tex had lower-than-expected equipment availability and Mingo Logan's longwall mine commenced operations in difficult mining conditions. Operating costs have also increased as a result of the adoption of the new accounting standards and payments made by Hobet and two subsidiaries of Dal-Tex pursuant to a previously disclosed assistance agreement among members of the Bituminous Coal Operators' Association (BCOA) in connection with the recent selective strike by the United Mine Workers of America (UMWA). In addition, Hobet and Coal-Mac, Inc. mines are experiencing less favorable mining conditions.
 In addition, selling expense and interest expense reflect the effects of the Dal-Tex acquisition and the discontinuation of capitalization of construction period interest at Mingo Logan. Also, Ashland Coal reported $2.1 million in tax benefits in the quarter.
 "Looking ahead," Payne concluded, "we expect that market prices will remain weak for the rest of the year. However, we do expect our average mining costs to improve over the balance of the year with performance at Dal-Tex and Mingo Logan making important contributions to such improvement. A major uncertainty relates to the current effort by the UMWA and the BCOA to reach agreement on a new national contract for the coal industry. If the old contract, which has been extended to May 3, 1993, expires before agreement is reached on a new contract, Ashland Coal's UMWA subsidiaries could be subjected to a strike."
 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 markets.
 Dal-Tex Coal Corporation, Hobet Mining, Inc., Mingo Logan Coal Company and Coal-Mac, Inc. are independent operating subsidiaries of Ashland Coal, Inc.
 ASHLAND COAL, INC., AND SUBSIDIARIES
 Condensed Consolidated Statements of Income
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended March 31 1993 1992
 Revenues
 Coal sales $133,859 $107,770
 Operating revenues 4,308 3,050
 138,167 110,820
 Costs and expenses
 Cost of coal sold 120,677 91,555
 Operating expenses 2,859 2,051
 Selling, general and administrative
 expenses 9,104 5,835
 132,640 99,441
 Operating income 5,527 11,379
 Other Income (Expense)
 Interest income 344 53
 Interest expense (A) (6,431) (2,935)
 Income (loss) before income taxes and the
 cumulative effect of changes in accounting (560) 8,497
 Income tax expense (benefit) (2,094) 1,215
 Income before the cumulative effect of
 changes in accounting 1,534 7,282
 Cumulative effect of changes in accounting (18,836) --
 Net income (loss) (17,302) 7,282
 Earnings per common share
 Primary:
 Earnings before cumulative effect adjustments $.06 $.44
 Cumulative effect adjustments $(1.11) --
 Net income (loss) $(1.05) $.44
 Fully diluted:
 Earnings before cumulative effect adjustments $.06 $.41
 Cumulative effect adjustments $(1.11) --
 Net income (loss) $(1.05) $.41
 Weighted average shares outstanding
 Primary 17,014 15,223
 Fully diluted (B) 18,452 16,689
 (A) Net of $1,483,000 of capitalized interest in 1992.
 (B) Because the calculation of primary earnings per share yields a more dilutive result for the three months ended March 31, 1993, that result is shown here.
 Condensed Consolidated Balance Sheets
 (In thousands)
 March 31, 1993 Dec. 31, 1992
 (Unaudited)
 Assets
 Current assets
 Cash and cash equivalents $2,011 $37,609
 Accounts receivable 54,503 75,249
 Inventories 32,178 24,458
 Prepaid royalties 17,980 8,947
 Deferred income taxes 2,537 --
 Assets to be sold and leased back -- 64,182
 Other current assets 724 1,001
 109,933 211,446
 Other assets
 Prepaid royalties 63,969 60,372
 Coal supply agreements 56,578 59,889
 Notes receivable and other assets 24,361 25,108
 144,908 145,369
 Property, plant and equipment
 Cost 820,608 806,596
 Less accumulated depreciation,
 depletion and amortization 182,553 170,079
 638,055 636,517
 892,896 993,332
 Liabilities and Stockholders' Equity
 Current liabilities
 Accounts payable $47,196 $34,618
 Accrued expenses 28,829 28,408
 Income taxes payable 299 395
 Deferred income taxes -- 5,434
 Current portion of long-term debt 582 105,025
 76,906 173,880
 Long-term debt 302,084 317,958
 Accrued postretirement benefits 61,874 20,243
 Accrued black lung benefits 13,865 14,014
 Other long-term liabilities 20,975 19,782
 Deferred income taxes 109,567 121,677
 Deferred gain on sale and leaseback
 of assets 4,054 3,482
 Convertible Class C preferred stock
 (subject to redemption) 34,349 34,021
 Stockholders' equity
 Convertible Class B preferred stock 33,050 33,050
 Common stock 136 136
 Paid-in capital 104,676 104,398
 Retained earnings 131,360 150,691
 269,222 288,275
 892,896 993,332
 Operating Information
 (In thousands of tons)
 Three Months Ended March 31 1993 1992
 Coal sales
 Domestic contract 2,501 1,768
 Domestic spot 1,229 896
 Export 804 881
 4,534 3,545
 Coal sources
 Hobet Mining, Inc. (C) 1,102 1,308
 Dal-Tex Coal Corp. (C) 1,373 --
 Mingo Logan Coal Company (C) 1,618 1,233
 Coal-Mac, Inc. (C) 417 606
 Purchases 254 523
 Other, including inventory change (230) (125)
 4,534 3,545
 (C) Independent operating subsidiary of Ashland Coal, Inc.
 -0- 4/21/93
 /CONTACT: David G. Todd of Ashland Coal, Inc., 304-526-3755/
 (ACI)


CO: Ashland Coal, Inc. ST: West Virginia IN: MNG OIL SU: ERN

KC-CD -- PG003 -- 8456 04/21/93 07:59 EDT
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