FINANCIAL REVIEW

OVERVIEW

By most measures, 1996 was a year of improvement for Dravo.
Revenue, gross profit and net income were up 8 percent, 9 percent
and 29 percent, respectively.  Most of the problems experienced
in 1995 during the startup of the $60-million Black River
expansion project were resolved.  Good progress was made on the
construction of an additional kiln and related material handling
equipment at the Maysville plant in northern Kentucky, with
startup scheduled for the second quarter of 1997.  Net cash
provided by operating activities improved markedly due, in part,
to one-time receipts from a lawsuit ruling, insurance settlements
and a state tax refund.  Also, in 1995, the company paid the
liabilities, principally accounts payable, retained when it sold
the assets of a major subsidiary.  Earnings improved, but the
improvement was smaller than anticipated.  Earnings were
constrained by a prolonged interruption in lime deliveries to a
major customer and a reduction in demand for utility lime.

Earnings for the year were $14.1 million, or $0.78 per share,
compared to $11.0 million, or $0.57 per share, in 1995.  In 1994,
Dravo reported a net loss of $10.6 million, or $0.88 per share.
A charge to discontinued operations of $6.5 million, or $0.44 per
share, was recorded in 1994 for legal fees and to provide for the
settlement of a lawsuit.  Also, an extraordinary charge of $7.6
million, or $0.51 per share, was recorded to reflect the write-
off of fees associated with debt instruments prepaid or
substantially altered as a result of the sale of the assets of
Dravo Basic Materials (DBM), the company's construction
aggregates operations.  A one-time charge of $1.4 million, or
$0.09 per share, reflects the cumulative accounting effect of the
adoption in 1994 of Statement of Financial Accounting Standards
No. 112, "Employers Accounting for Postemployment Benefits."


RESULTS OF OPERATIONS

CONTINUING OPERATIONS

Revenue: Most of the $12.1 million revenue increase over last
year was attributable to higher sales in the southeast market
region.  The southeast market consists mostly of commercial
accounts and is supplied primarily by the company's Longview
facility located near Birmingham, Alabama.  Strong commercial
demand, augmented by the sale of brokered lime as demand exceeded
production capacity, contributed to the revenue increase.
Revenue also increased because a new aggregates plant, completed
at Longview in late 1995, converts quarried limestone chemically
unsuitable for lime production into crushed stone aggregates
byproducts.  Sales in the Ohio Valley area exceeded last year's
results due to strong demand in the metallurgical market.
Utility lime sales were dampened by prolonged delivery
interruptions to a major utility customer caused by problems at
the customer's generating station and by a reduction in the value
of sulfur-dioxide (SO2)emission allowances.  SO2 allowances,
which are traded in the open market, are awarded to utility
companies that exceed their mandated SO2 removal requirements.
Inefficiencies in the allowance trading, a tendency by many
utilities to "bank" earned credits for future use rather than
trade them, and higher-than-anticipated levels of low-sulfur coal
utilization all combined to cause a marked decline in allowance
prices in 1996.  The lower allowance prices made it less
attractive for utility customers to fully utilize their flue gas
desulfurization (FGD)systems and reduced their demand for lime
used for SO2 removal.

Revenue in 1995 was $146.1 million compared to $278.1 million in
1994, which included DBM for the entire year.  Lime revenue in
1994 was $125.7 million.  The increased lime revenue in 1995 was
mainly due to first-year shipments to American Electric Power's
Gavin Station under a 15-year supply contract.  Shipments under a
new supply agreement with the Henderson Municipal Power and Light
Station operated by Big Rivers Electric Cooperative and strong
spot market pricing in 1995 also contributed to the revenue
increase.

Costs and Expenses: Gross profit increased $3.4 million over
1995; however, profit margins remained essentially the same at 25
percent.  Gross profit was affected by higher inventory costs as
prolonged delivery interruptions to a major customer caused
production inefficiencies and increased costs.  The sale of
brokered lime in the southeast market region also held down gross
margins.

Gross profit of $36.5 million was $7.5 million lower in 1995 than
in 1994, which included DBM.  Margins, however, were much
improved: 25 percent in 1995 versus 16 percent in 1994.  The
improvement reflects the dilutive effect of the aggregates
business on the company's margins before the divestiture.  Gross
margins on lime sales were slightly higher than 1994's pro forma
results, but the increase was less than expected because of
higher production costs related to the expansion project at Black
River.

Selling expense was modestly lower in 1996 than 1995.  There was
a significant drop from 1994 to 1995, due primarily to the DBM
sale.  Selling expense varies depending on research and
development expense billed to third parties.  These research
activities involve a variety of lime-related technologies, with
particular emphasis on air pollution control.  Depending on the
project, governmental agencies, public utilities or private
groups may reimburse all or a portion of a project's costs.
Third-party billings are treated as a reduction in costs.
Research and development costs and billings to third parties are
detailed in Note 16, Research and Development, in the Notes to
Consolidated Financial Statements.

                              13-12

General and administrative expenses were essentially unchanged in
1996.  A $1.3 million pension expense increase was more than
offset by a $1.7 million drop in retiree medical costs.  The
company began participating in various Medicare HMOs in 1996 and
fixed the amount it contributes toward the cost of retiree
medical coverage.  General and administrative expenses were $6.3
million lower in 1995 than 1994 due to personnel reductions
following the DBM sale and consolidation of administrative
functions.  On a pro forma basis, administrative expenses were
higher because of differences between actual experience and the
assumptions used in preparing the pro forma analysis.

Equity in earnings of joint ventures includes the company's share
in two 50-percent owned joint ventures: a contract phosphate rock
mining operation in Idaho and a small contract coke operation in
Wyoming.  The phosphate mining operation's profitability varies
depending on mining conditions and the requirements of its single
contract customer.  Earnings from joint ventures were higher in
1996 due to strong phosphate demand and a return to more normal
maintenance expense.  Prior to 1995, the company also had a 50-
percent share in a shell dredging operation.  Earnings from joint
ventures in 1995 were down $1.1 million from 1994 due to higher
maintenance expense at the phosphate rock mining operation and
the sale of the shell dredging operation as part of the DBM
transaction.

Other income (expense) includes the gain or loss on the sale or
abandonment of property, plant and equipment.  In 1996 and 1995,
the amounts are insignificant.  The $1.1 million gain in 1994
included the sale of the company's airplane, $324,000, and
$487,000 from the sale, after accrued expenses, of DBM's assets.
See Note 3, Dispositions, in the Notes to Consolidated Financial
Statements for a further discussion of the latter transaction.

Interest income was $815,000 higher than last year due to
interest on a refund received from a state taxing authority after
the company filed amended tax returns based on its current
interpretation of the state tax code.  The decline in interest
income from 1994 to 1995 reflects the collection, early in 1995,
of an interest-bearing note receivable.

Interest expense increased $1.6 million because of higher debt
levels in 1996 versus 1995.  The proceeds from the DBM sale
enabled the company to reduce debt, including amounts borrowed
under a revolving line of credit, $85.5 million at the beginning
of 1995.  The revolver debt level subsequently increased
throughout 1995 as the company satisfied retained DBM
liabilities, principally accounts payable, and completed the
Black River expansion project. Debt remained at the higher level
in 1996 as cash flow was invested in $20.0 million of capital
projects.  Interest capitalized in 1996 and 1995 was $328,000 and
$2.8 million, respectively.  Interest expense of $4.8 million in
1995 was significantly lower than 1994's expense of $12.4
million.  The reduction reflects the early 1995 prepayment of
loans totaling $85.5 million from cash received from the DBM
transaction.  Lower interest rates also lowered expense.

The company's income tax expense was zero in 1996 because of net
operating loss carryforwards (NOLs) that sheltered the company's
income from both federal and state income taxes.  Income tax
expense of $340,000 in 1995 was for estimated state income taxes.
In 1994, income tax expense of $597,000 included an accrual of
$300,000 for federal alternative minimum tax arising from the DBM
assets sale.  The company recorded a $24.9 million benefit for
income taxes in 1994 under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes."  Management believes that, due to the large proportion of
revenue generated by long-term supply contracts, income can be
reasonably projected for purposes of determining whether the
realization of the asset resulting from the use of NOLs in future
years is more likely than not.  The amount of the net deferred
tax asset reflects that portion of the gross deferred tax asset
that management believes, based on current projections and
estimates, is more likely than not to be realized.  After all
NOLs have been recognized in the consolidated financial
statements, the company's tax rate will return to a more normal,
higher effective rate.

In conjunction with the sale of DBM's assets, existing loan
agreements were substantially altered.  Also, while negotiating a
$50 million financing agreement with Prudential Power Funding for
the Black River expansion, the company purchased a call option
that enabled it to prepay on May 17, 1995, without penalty,
amounts outstanding under the financing agreement.  With
Prudential Power Funding's consent, the entire amount borrowed
was prepaid.  The fees associated with these agreements were
written off as extraordinary items in 1994.

Effects of inflation:  Inflation rates have been low during the
past three years and as a result have not affected the company's
operations. In addition, Dravo Lime's long-term lime supply
contracts provide for price increases for specific production
expenses, such as labor, fuel and electricity.


DISCONTINUED OPERATIONS

The most significant event involving discontinued operations was
the collection in 1996 of a $7.3 million judgment and interest
awarded by a Georgia court related to a contract dispute with a
discontinued engineering subsidiary's subcontractor.  The
judgment and interest were classified as a discontinued
operations current receivable in the company's 1995 year-end

                              13-13

financial statements.  Also in 1996, an issue with one of the
company's insurance carriers regarding deductible limits on
asbestos and other retroactive claim adjustments was resolved
with the insurance carrier refunding $2.6 million in past
payments.  The discontinued operations provision was credited
$1.1 million for the insurance refunds.  The company received a
$2.2 million refund from a state taxing authority in 1996 after
the company filed amended income tax returns based on its current
interpretation of the state tax code.  The refund included
$575,000 that was recorded as interest income.  The original tax
returns were filed on a separate basis and included only the
results of entities that had operations in the state.  These
entities were, for the most part, profitable and paid income
taxes.  The amended tax returns were filed on a combined basis,
which included an apportionment of the results of all the
company's operations, including losses from discontinued
operations.  The amended returns reported tax losses instead of
taxable income and resulted in the refund, of which $1.7 million
was credited to the discontinued operations reserve.  The amended
returns also generated a state tax NOL that can be used to
shelter future taxable income.

In 1994, a previously established provision for discontinued
operations was increased $6.6 million to cover legal fees related
to an insurance claim and to provide for the settlement of a
lawsuit.  The insurance claim involves the company's assertion
that it is entitled to a defense and indemnity under its
insurance contracts for environmental clean-up costs in Hastings,
NE.  See Note 8, Contingent Liabilities, in the Notes to
Consolidated Financial Statements for a further discussion of the
Hastings matter.


FINANCIAL POSITION AND LIQUIDITY

The company's financial position improved over the past year.
Long-term debt decreased by $757,000 and shareholders' equity
increased by $14.1 million.  The capitalization ratio, total debt
divided by total debt and equity, decreased to 0.38 from 0.41.
Additions to property, plant and equipment included capital
expenditures of $20.0 million, of which $8.6 million was for the
fourth kiln at Maysville.  Net liabilities of discontinued
operations increased $4.5 million, primarily due to the
collection of the judgment, tax refund and insurance claims
discussed above, offset by other previously reserved discontinued
operations expenditures.

The company has sufficient funds and borrowing capacity to meet
its anticipated operating and capital needs.  To minimize
interest charges, cash balances are kept low through a banking
arrangement that uses excess cash held in the company's accounts
to reduce the amount of overnight borrowing on a revolving credit
agreement.

A $65 million revolving credit/letter of credit facility is
provided by a consortium of lenders that includes Regions Bank of
Alabama (formerly First Alabama Bank); PNC Bank, N.A.; and Bank
of America Illinois.  Interest on the revolver equals either the
base lending rate of Regions Financial Corporation, Regions Bank
of Alabama's parent, or, at the option of the company, the
Eurodollar interest rate plus 2 percent.  The facility expires
July 31, 1998, but includes renewal provisions.

Part of the line of credit is being used to finance construction
of a new kiln and related material-handling equipment at the
Maysville facility.  On July 31, 1997, up to $17 million borrowed
under the facility may be converted to a five-year term loan.
Also on July 31, 1997, the amount available under the revolver
will be reduced from $65 million to $48 million.

Obligations under the revolving credit/letter of credit facility
and senior term notes are secured by a pledge of the stock of
Dravo Lime Company and Dravo Basic Materials Company along with
Dravo Lime Company's accounts receivable and finished goods
inventories.  Additionally, certain contract rights, patents and
mortgages on the company's Maysville, Black River and Longview
plants have been pledged as collateral.  The agreements contain
uniform restrictive covenants that require the company to
maintain minimum net worth levels and fixed charge ratios on a
consolidated basis; restrict incurrence of debt, liens and lease
obligations; restrict the sale of significant assets; and limit
payment of dividends.  These restrictions are not expected to
have an adverse impact on the company's ability to meet its
obligations.

All known outstanding discontinued operations items have been
classified as current or long-term based on the estimated timing
of future cash receipts and disbursements.  The remaining
discontinued operations liabilities will not have a material
adverse impact on liquidity, because cash payments needed to
satisfy them are spread over several years.


DIVIDENDS

The company's loan agreement contains a covenant that limits
common stock dividend payments.  A common stock dividend may not
be declared if that dividend plus all other common dividends paid
after September 30, 1995, exceeds 25 percent of cumulative
earnings from continuing operations after September 30, 1995.
Cumulative earnings exclude gains from the sale of capital
assets, extraordinary gains and unremitted earnings of joint
ventures. At December 31, 1996, cumulative earnings since
September 30, 1995 from which dividends could be declared totaled
$16.9 million.  No dividends on common stock were declared.
Dividends on the $3.0875 cumulative, convertible, exchangeable,
Series D Preference Stock and the $2.475 cumulative convertible
Series B Preference Stock were declared quarterly throughout each
of the last three years.  All declared preference dividends have
been paid on a timely basis.

                              13-14

COMMON STOCK MARKET PRICE

The principal market on which Dravo's common stock is traded is
the New York Stock Exchange under the symbol, DRV.  The high and
low common stock sales prices for each quarterly period in 1996
and 1995 as reported for New York Stock Exchange composite
transactions were:
<TABLE>
                         1996                     1995
<CAPTION>

Quarter              High      Low            High      Low
<S>                 <C>       <C>            <C>       <C>

First               13 3/4    11 1/4         11 3/4    10
Second              14 7/8    12 3/4         14 3/4    10 1/4
Third               14 5/8    12             14 3/4    12 1/2
Fourth              15 3/4    12 1/2         13 5/8    11 1/2

</TABLE>

OUTLOOK

Continuing operations: Dravo Corporation's balance sheet, income
and cash flow have greatly improved since the company's strategic
direction was focused exclusively on its lime business two years
ago.  Investments continue to be made in property, plant and
equipment to improve short-term performance and provide the
mineral reserves and equipment necessary to sustain acceptable
returns over the long term. A new Maysville kiln and ancillary
equipment valued at $20 million is scheduled to start production
in the second quarter of 1997.  Early in 1997, more than 27
million tons of high calcium reserves adjacent to the Longview
facility were purchased as a necessary first step in expanding
production capacity in the southeastern market region.  A major
refurbishing of the largest of Black River's pre-expansion kilns
is slated for 1997.  This project will increase the kiln's
throughput while also significantly improving its thermal
efficiency.

The company will continue to promote the commercialization of its
proprietary lime-based environmental technologies.  Currently
being installed at the AES Beaver Valley Cogeneration Station in
Monaca, PA, the first full-scale THIOCLEAR FGD system is
scheduled to startup in the second quarter.  This project is an
important step toward providing the technical underpinning for an
aggressive sales and marketing effort of the THIOCLEAR
technology.  Full-scale applications of Dravo technologies for
producing commercial FGD system byproducts were announced in
1996, and others are under consideration. Process development
work with significant commercial potential will be carried out
during 1997 at Dravo's Miami Fort pilot plant facility in the
area of combined sulfur dioxide and nitrogen oxides (SOx/NOx)
removal in wet scrubbers.  Other environmental technology markets
in which the company will be active during 1997 include materials
and systems for controlling air toxics emissions, and land
applications of residual solids from lime-based FGD systems.

Despite the considerable progress made in recent years, the
company remains disproportionately small relative to the
obligations left over from Dravo's earlier history as a
diversified conglomerate.  The company's size makes its quarter-
to-quarter operating performance acutely susceptible to changes
in production and sales volume, and with more than 60 percent of
its capacity committed to a small number of utility customers,
earnings are particularly sensitive to disruptions in utility
operating rates.  On a longer-term basis, however, utility
operating rates are steadier and more dependable than those of
most other industrial markets, thus the large portion of Dravo's
backlog committed to utility customers represents one of the
company's most favorable characteristics.  Nevertheless, because
of the company's short-term earnings sensitivity, it became
apparent that the company needed to accelerate its growth plans.
In response, management announced in October 1996 that it was
undertaking an investment banking review of strategic
alternatives for accelerating growth.  If this process fails to
present Dravo with merger, acquisition or other opportunities
advantageous to the interest of the company's shareholders,
management is fully prepared to aggressively pursue its business
plan, and is confident that implementation of the plan will
enhance shareholder value.

Discontinued operations:  The company formerly operated a metal
fabrication facility in Hastings, NE.  The federal Environmental
Protection Agency (EPA) has notified the company it believes the
company is a potentially responsible party (PRP) for the clean-up
of soil and groundwater contamination at four sub-sites in the
Hastings area.  In January 1997, the company reached a monetary
settlement with the EPA regarding one of the sub-sites in
exchange for the EPA excluding the company from any further
liability at that sub-site. See Note 8, Contingent Liabilities,
in the Notes to Consolidated Financial Statements for further
discussion of the company's estimate of total clean-up costs and
its share of those costs.

Management estimated the assets and liabilities associated with
discontinued operations and believes the provision for losses on
discontinued operations is adequate at this time.  If these
estimates are inaccurate or should other unforeseen developments
occur, a future additional provision for discontinued operations
could be required.

Investors are cautioned that statements which relate to the
future are, by their nature, uncertain and dependent upon
numerous contingencies, any of which could cause actual results
and events to differ materially from those indicated in such
forward-looking statements.  This is particularly true of efforts
to commercially develop new technologies, and regarding estimates
of the ultimate cost of environmental remediation, including
participation in such costs by other PRPs.

                              13-15
               DRAVO CORPORATION AND SUBSIDIARIES

                   Consolidated Balance Sheets
<TABLE>
                                               December 31,
                                              1996      1995
(In thousands)
<CAPTION>

ASSETS
 <S>                                      <C>       <C>

Current assets:
 Cash and cash equivalents                $  1,600  $  1,086
 Accounts receivable, net of allowance for
  uncollectibles of $176 and $934           23,265    24,251
 Notes receivable (Note 15)                    921     1,296
 Inventories (Note 4)                       16,481    14,194
 Net assets of discontinued
  operations (Note 2)                           --       923
 Other current assets                          751     1,322

Total current assets                        43,018    43,072

Advances to and equity in joint ventures     2,093     2,466
Notes receivable (Note 15)                   4,380     3,497
Other assets (Note 10)                      25,066    23,205
Deferred income taxes (Note 13)             24,853    24,853

Property, plant and equipment:
  Land                                       7,480     6,164
  Mine development                           9,218     9,218
  Building and improvements                 13,147    11,562
  Machinery and equipment                  208,180   198,891

                                           238,025   225,835

  Less accumulated depreciation
   and amortization                        112,026   109,667

Net property, plant and equipment          125,999   116,168

Total assets                              $225,409  $213,261

</TABLE>

See accompanying notes to consolidated financial statements.

                              13-16
               DRAVO CORPORATION AND SUBSIDIARIES
<TABLE>
                   Consolidated Balance Sheets
                                               December 31,
                                              1996      1995
<CAPTION>
(In thousands,
  except share amounts)

LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                       <C>       <C>

Current liabilities:
  Current  portion of long-term 
   notes (Notes 5  and  15)              $   6,166  $  6,099
 Accounts payable - trade                   14,542    17,969
 Accrued insurance                           1,906     1,639
 Accrued retirement contribution             1,785     2,423
 Net  liabilities of discontinued
  operations  (Note  2)                      6,299        --
 Other current liabilities                   3,843     5,177

 Total current liabilities                  34,541    33,307

Long-term notes (Notes 5 and 15)            63,535    64,292
Other liabilities                            6,632     6,290
Net  liabilities  of discontinued
  operations  (Note  2)                      6,786     9,517

Redeemable preference stock (Notes 6 and 15):
 Par value $1, issued 200,000 shares:
  Series D, $12.35 cumulative, convertible,
  exchangeable (entitled in liquidation
  to $20.0 million)                         20,000    20,000

Shareholders' equity (Notes 6 and 12):
Preference stock, par value $1, authorized
  1,878,870 shares: Series B, $2.475 
  cumulative,  convertible, issued 20,386
  and 25,386 shares (entitled in liquidation
  to $1.1 million and  $1.4 million);           20        25 
 Series D, reported above       
Common stock, par value $1,
 authorized 35,000,000 shares:
 issued 15,096,817 and 15,055,237 shares    15,097    15,055
Other capital                               63,077    60,818
Retained earnings                           20,063     8,464
 Treasury stock at cost;
  333,168 and 347,691 common shares        (4,342)   (4,507)

Total shareholders' equity                  93,915    79,855

Total liabilities and
 shareholders' equity                     $225,409  $213,261

</TABLE>
See accompanying notes to consolidated financial statements.

                              13-17
               DRAVO CORPORATION AND SUBSIDIARIES

              Consolidated Statements of Operations
<TABLE>
                                           Years ended December 31,
(In thousands, except per share data)    1996      1995      1994
<CAPTION>
<S>                                  <C>       <C>       <C>

Revenue                              $158,133  $146,067  $278,052
Cost of revenue                       118,165   109,541   234,018

  Gross profit                         39,968    36,526    44,034

Selling expenses                        4,560     5,009     7,116
General and administrative expenses    16,410    16,228    22,497

  Earnings from operations             18,998    15,289    14,421

Other income (expense):
 Equity in earnings of joint ventures     710       572     1,672
 Other income (expense)                  (54)       182     1,088
 Interest income                          900        85       754
 Interest expense                    ( 6,426)  ( 4,807)  (12,408)

  Net other expense                  ( 4,870)  ( 3,968)  ( 8,894)

Earnings before taxes from 
 continuing operations                14,128     11,32     15,527
Income tax expense (Note 13)               --       340       597

Earnings from continuing operations    14,128    10,981     4,930
Loss on discontinued operations (Note 2)   --        --     6,554

Earnings (loss) before extraordinary item
  and cumulative accounting change     14,128    10,981  ( 1,624)
Extraordinary item (Note 14)               --        --  ( 7,572)
Cumulative effect of accounting
 change (Note 10)                          --        --  ( 1,361)

  Net earnings (loss)                  14,128    10,981  (10,557)
Preference dividends                    2,529     2,535     2,544

Net  earnings  (loss) available
 for common stock                   $  11,599   $ 8,446 $ (13,101)

Weighted average shares outstanding    14,894    14,875    14,859

Primary earnings (loss) per share
   Continuing  operations            $   0.78  $   0.57  $   0.16
   Discontinued  operations                --        --    ( 0.44)
   Extraordinary  item                     --        --    ( 0.51)
   Cumulative  effect of
    accounting change                      --        --    ( 0.09)

Net earnings (loss)                  $   0.78   $  0.57  $ ( 0.88)
</TABLE>
See accompanying notes to consolidated financial statements.

                              13-18
               DRAVO CORPORATION AND SUBSIDIARIES

          Consolidated Statements of Retained Earnings

<TABLE>
                                           Years ended December 31,
(In thousands)                            1996     1995      1994
<CAPTION>
<S>                                    <C>      <C>      <C>

Retained earnings at beginning of year $ 8,464  $    18  $ 13,119
Net earnings (loss)                     14,128   10,981  (10,557)

                                        22,592   10,999     2,562

Dividends declared:

Series B preference stock                   59       65        74
Series D preference stock                2,470    2,470     2,470

                                         2,529    2,535     2,544

Retained earnings at end of year       $20,063  $ 8,464  $     18

</TABLE>

See accompanying notes to consolidated financial statements.

                              13-19
               DRAVO CORPORATION AND SUBSIDIARIES

              Consolidated Statements of Cash Flows
<TABLE>
                                                 Years  ended December 31,
(In thousands)                                   1996      1995      1994
<CAPTION>
<S>                                           <C>       <C>       <C>

Cash flows from operating activities:
Earnings from continuing operations           $ 14,128  $ 10,981  $  4,930
Adjustments to reconcile earnings from
 continuing operations to net cash provided
 (used) by continuing operations activities:
  Depreciation and amortization                 10,124     9,536    17,626
  Change in accounting principle                    --        --    (1,361)
  Loss (gain) on sale of assets                     54      (182)   (1,088)
  Equity in joint ventures                         373        70      (116)
  Changes in assets and liabilities, net of
      effects from DBM disposition:
   Decrease (increase) in accounts receivable      986    (4,113)    (143)
   Decrease (increase) in notes receivable        (507)      568      464
   Decrease (increase) in inventories           (2,287)   (1,556)   3,909
   Decrease (increase) in other current assets     638       745     (869)
   Decrease (increase) in other assets             177    (5,150)  (6,302)
   Increase (decrease) in accounts payable
    and accrued expenses                        (4,522)  (27,142)   7,873
   Increase (decrease) in income taxes payable    (502)     (144)     329
   Increase in other liabilities                   342       390    3,178

   Total adjustments                             4,876   (26,978)  23,500

Net cash provided (used) by continuing
 operations activities                          19,004   (15,997)  28,430

Loss from discontinued operations                   --        --   (6,554)
Increase (decrease) in net liabilities of
 discontinued operations                         4,491   (13,099)  (4,592)
Proceeds from repayment of notes receivable
 from sale of discontinued operations               --     2,200    1,600

Net cash provided (used) by discontinued
 operations activities                           4,491  (10,899)   (9,546)
Net cash used by extraordinary item                 --       --    (7,572)

Net cash provided (used) by
 operating activities                         $ 23,495 $(26,896) $ 11,312

</TABLE>

See accompanying notes to consolidated financial statements.

                              13-20



               DRAVO CORPORATION AND SUBSIDIARIES

              Consolidated Statements of Cash Flows
<TABLE>

                                               Years ended December 31,
(In thousands)                                 1996      1995      1994
<CAPTION>
<S>                                         <C>       <C>        <C>

Cash flows from investing activities:
Proceeds from sale of assets                 $   --  $ 120,867  $  2,148
Additions to property, plant and equipment  (20,009)  ( 33,144)  (44,757)
Other, net                                       (1)         3       509

Net cash provided (used) by
 investing activities                       (20,010)    87,726   (42,100)


Cash flows from financing activities:
Net borrowing under revolving
 credit agreements                            5,160     27,948    19,300
Principal payments under long-term notes     (6,123)   (85,259)   (4,736)
Proceeds from issuance of long-term notes       273        185    19,945
Proceeds from issuance of common stock          248        557        42
Purchase of treasury stock                       --     (2,667)       --
Dividends                                    (2,529)    (2,535)   (2,544)

Net cash provided (used) by
 financing activities                        (2,971)   (61,771)   32,007

Net increase (decrease) in cash
 and cash equivalents                           514       (941)    1,219
Cash and cash equivalents at 
 beginning of year                            1,086      2,027       808

Cash and cash equivalents at end of year   $  1,600  $   1,086  $  2,027



Supplemental disclosures of cash flow information:
Cash paid (received) during the year for:
 Interest (net of amount capitalized)     $  6,492  $   5,695  $ 12,408
 Income taxes                                  502        175      (143)

</TABLE>

See accompanying notes to consolidated financial statements.

                              13-21

               DRAVO CORPORATION AND SUBSIDIARIES

           Notes to Consolidated Financial Statements


Note 1: Summary of Significant Accounting Policies

Description   of   Business:   The  consolidated   financial
statements include the accounts of Dravo Corporation and its
majority-owned  subsidiaries (the company).   The  principal
subsidiary  is  Dravo  Lime Company,  one  of  the  nation's
largest  lime  producers.  Lime is sold to electric  utility
companies  under  long-term contracts and to  the  pulp  and
paper,   metals,   chemicals,  municipal  and   construction
markets.   Three  major  utility companies,  with  whom  the
company  has  long-term contracts, each accounted  for  more
than 10 percent of consolidated revenue in 1996. The company
completed  a  transaction on December 30, 1994 in  which  it
sold substantially all the assets and certain liabilities of
Dravo   Basic  Materials  Company,  Inc.  (DBM),  a   former
principal subsidiary.  The assets and liabilities  sold  are
removed  from  the  company's December  31,  1996  and  1995
consolidated   balance  sheets.   The  December   31,   1994
consolidated   statement  of  operations  and   consolidated
statement of cash flows include the results of DBM  for  the
entire year.

Principles   of  Consolidation:   Significant   intercompany
balances  and  transactions  have  been  eliminated  in  the
consolidation process.

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  amount  of
revenues  and expenses during the reporting period.   Actual
results could differ from those estimates.

Cash  and Cash Equivalents:  For purposes of reporting  cash
flows,   the  company  considers  all  highly  liquid   debt
instruments  purchased with a maturity of  three  months  or
less to be cash equivalents.

Inventories:   Inventories are valued at average  production
cost  or  market, whichever is lower.  The cost of  products
produced  includes raw materials, direct labor and operating
overhead.

Property,  Plant,  Equipment  and  Depreciation:   Property,
plant  and  equipment  are stated at cost.  Depreciation  is
computed  using  the  straight-line  method  over  estimated
useful  lives of 10 to 30 years for buildings and  3  to  30
years   for   machinery  and  equipment.  Expenditures   for
maintenance and repairs which do not materially  extend  the
lives of assets are expensed currently.  The asset cost  and
accumulated  depreciation are removed from the accounts  for
assets  sold or retired, and any resulting gain or  loss  is
included in other income and expense.


Income  Taxes:   Deferred  income  taxes  reflect  the   tax
consequences on future years of differences between the  tax
bases   of   assets  and  liabilities  and  their  financial
reporting  amounts.   Future  tax  benefits,  such  as   net
operating  loss carryforwards, are recognized to the  extent
that realization of such benefits are more likely than not.

Earnings Per Share:  Primary earnings per share are based on
net earnings less preference dividends declared in the year,
divided  by  the  weighted  average  sum  of  common  shares
outstanding  during  the year and common share  equivalents.
Shares  exercisable  as  employee stock  options  and  stock
appreciation rights are considered common share  equivalents
except when their inclusion would be anti-dilutive.  Primary
common share equivalents are calculated based on the average
common stock price for the year.  Fully diluted earnings per
share  are based on net earnings, divided by the sum of  the
weighted average number of common shares outstanding  during
the  year, weighted average number of shares resulting  from
the assumed conversion of issued preference shares to common
shares  and common share equivalents.  Fully diluted  common
share equivalents are calculated based on the higher of  the
average  or  ending common stock price for the year.   Fully
diluted  earnings per share are anti-dilutive in 1996,  1995
and 1994 and are not presented.  Stock-based compensation is
accounted   for  using  the  intrinsic  value  approach   as
prescribed by Accounting Principles Board Opinion No. 25.


                              13-22

Note 2:  Discontinued Operations

An additional provision of $6.5 million was taken in 1994
for a previously established discontinued operations
reserve.  Part of the provision was for legal fees
anticipated to pursue various lawsuits and claims, including
the Hastings insurance litigation discussed in Note 8,
Contingent Liabilities.

The company received a refund from a state taxing authority
in 1996 after filing amended tax returns based on its
current interpretation of the state tax code.  The original
tax returns were filed on a separate basis and included only
the results of entities that had operations in the state.
Those entities were, for the most part, profitable and paid
income taxes.  The amended tax returns were filed on a
combined basis, which included an apportionment of the
results of all the company's operations, including losses
from discontinued operations.  The amended returns reported
tax losses instead of taxable income and resulted in a $1.7
million refund, which was credited to the discontinued
operations reserve.

The company received cash proceeds of $2.2 million in 1995
and $1.6 million in 1994 from the repayment of notes
received from the previous sales of discontinued businesses.

The remaining discontinued operations' assets and
liabilities for the respective years ended December 31
relate to non-cancelable leases, environmental, insurance,
legal and other matters associated with exiting the
engineering and construction business and are presented
below:
<TABLE>
(In thousands)                             1996         1995
<CAPTION>
<S>                                    <C>          <C> 

Current assets:
Accounts and retainers receivable      $    323     $    122
Other                                        --        7,185
  Total current assets                      323        7,307

Accounts and retainers receivable            --          333
Other                                       309          309
  Total assets                         $    632     $  7,949

Current liabilities:
Accounts and retainers payable         $    536     $    140
Accrued loss on leases                    2,304        2,240
Other                                     3,782        4,004

  Total current liabilities               6,622        6,384

Accrued loss on leases                      954        3,328
Other                                     6,141        6,831

  Total liabilities                    $ 13,717     $ 16,543

Net liabilities and accrued loss
 on leases of discontinued operations $(13,085)    $( 8,594)
</TABLE>


Note 3:  Dispositions

The company completed a transaction on December 30, 1994 in which
it sold to Martin Marietta Materials, Inc. (Martin Marietta),
effective January 3, 1995, substantially all the assets of its
construction aggregates business.  Assets sold included the
assets, properties and leases of DBM, a wholly owned subsidiary
of the company, and Atchafalaya Mining Company, Inc. (AMC), a
wholly owned subsidiary of DBM, used in the production,
marketing, distribution and sale of various aggregate products.
Also sold was the capital stock of Dravo Bahama Rock Limited
(DBR), a wholly owned foreign subsidiary of DBM.

The company, DBM and AMC retained substantially all obligations
and liabilities which arose from, or in connection with,
operations prior to the sales transaction.  After expenses, a net
pre-tax gain of $487,000 was recorded as other income.

The assets and liabilities sold to Martin Marietta were removed
from the company's December 31, 1994 balance sheet, and a
corresponding receivable from the sale of DBM of $120.5 million
was recorded.  The December 31, 1994 consolidated statement of
operations includes the results of DBM for the entire year.

The following pro forma consolidated statement of operations
presents the results of operations assuming the disposition of
DBM had been completed as of the beginning of 1994. Adjustments
have been made to exclude the results of DBM, to decrease
interest expense for loans prepaid in early 1995 from the sale
proceeds, and to record interest income at overnight investment
rates for cash assumed to have been received in excess of
liabilities paid.  Pro forma data is provided for comparative
purposes only and does not purport to be indicative of the
results which actually would have been obtained if the
disposition had taken place prior to the pro forma dates.

                              13-23

Note 3:  Dispositions (continued)
<TABLE>
(In thousands, except per share data)
<CAPTION>

                                             1996        1995       1994
                                            Actual      Actual    Pro forma
                                                                 (Unaudited)
<S>                                      <C>         <C>          <C>

Revenue                                  $ 158,133   $ 146,067    $ 125,661
Cost of revenue                            118,165     109,541      94,859

Gross profit                                39,968      36,526      30,802

Selling expenses                             4,560       5,009       4,530

General and administrative expenses         16,410      16,228      12,872

 Earnings from operations                   18,998      15,289      13,400

Other income (expense):
 Equity in earnings of joint ventures          710         572       1,115
 Other income (expense)                       (54)         182         199
 Interest income                               900          85       1,727
 Interest expense                           (6,426)     (4,807)     (5,717)
  Net other expense                         (4,870)     (3,968)     (2,676)

Earnings before taxes from
 continuing operations                      14,128      11,321      10,724

Income tax expense                              --         340         489

Earnings from continuing operations       $ 14,128   $  10,981    $ 10,235

Earnings per share, continuing operations $   0.78   $    0.57    $   0.52
</TABLE>

Note 4:  Inventories

Inventories for the respective years ended December  31  are
classified as follows:
<TABLE>
(In thousands)                           1996      1995

<CAPTION>
<S>                                   <C>       <C>

Finished goods                        $ 2,586   $ 1,677
Materials and supplies                 13,895    12,517

Net inventories                       $16,481   $14,194
</TABLE>

Note 5:  Notes Payable

Notes payable at December 31 include the following:
<TABLE>
(In thousands)
                                           1996         1995
<CAPTION>
<S>                                     <C>          <C>

Variable rate revolving line of credit  $33,110      $27,950
11.21% notes, payable through 2002       35,828       41,800
Other notes, payable through 2005           763          641

                                         69,701       70,391
Deduct: Current portion of notes          6,166        6,099
Total long-term notes                   $63,535      $64,292
</TABLE>

The variable rate revolving line of credit is a $65.0
million revolving credit/letter of credit facility with
Regions Bank of Alabama (formerly First Alabama Bank); PNC
Bank, N.A.; and Bank of America Illinois.  Interest on the
revolver equals either the base lending rate of Regions
Financial Corporation, Regions Bank of Alabama's parent, or,
at the option of the company, the Eurodollar interest rate
plus 2 percent.  The facility expires July 31, 1998, but
includes renewal provisions.

The company used a portion of the line of credit to finance
construction of a new kiln and related material-handling
equipment at its Maysville facility.  On July 31, 1997, up
to $17.0 million borrowed under the facility may be
converted to a five-year term loan.  Also on July 31, 1997,
the amount available under the revolver will be reduced from
$65.0 million to $48.0 million.


Note 5:  Notes Payable (continued)

The 11.21 percent term notes require quarterly interest
payments and annual principal repayments in the amount of
$6.0 million.

Obligations under the revolving credit/letter of credit
facility and the 11.21 percent term notes are secured by a
pledge of the stock of Dravo Lime Company and Dravo Basic
Materials Company along with Dravo Lime Company's accounts
receivable and finished goods inventories.  Additionally,
certain contract rights, patents and mortgages on the
company's Maysville, Black River and Longview plants have
been pledged as collateral.  The agreements contain uniform
restrictive covenants that require the company to maintain
minimum net worth levels and fixed charge ratios on a
consolidated basis; restrict incurrence of debt, liens and
lease obligations; restrict the sale of significant assets;
and limit payment of dividends.  The company may not declare
a common stock dividend if that dividend plus all other
common dividends paid after September 30, 1995, exceed 25
percent of cumulative earnings from continuing operations
after September 30, 1995.  Cumulative earnings exclude gains
from the sale of capital assets, extraordinary gains and
unremitted earnings of joint ventures.  At December 31,
1996, cumulative earnings since September 30, 1995 from
which dividends could be declared totaled $16.9 million.  No
dividends on common stock were declared.

Assets pledged under certain notes and leases had a book
value of $141.7 million at December 31, 1996.

Amounts payable on long-term debt, excluding the variable
rate revolving line of credit, due in 1997 and thereafter
are: 1997, $6.2 million; 1998, $6.2 million; 1999, $6.1
million; 2000, $6.0 million; 2001, $6.0 million; and after
2001, $6.1 million.

                              13-24

Note 6:  Redeemable Preference Stock

The  company  has outstanding 200,000 shares of  cumulative,
convertible,   exchangeable  Series  D   Preference   Stock.
Cumulative  dividends  of  $3.0875  per  share  are  payable
quarterly.  Each share of preference stock may be converted,
at  the  option  of  the holder, into 8.0 shares  of  common
stock. The stock is also exchangeable, at the option of  the
company,  for 12.35 percent Senior Subordinated  Convertible
Notes  due  September  21, 2001.  The 12.35  percent  Senior
Subordinated Notes would contain the same conversion rights,
restrictions and other terms as the preference stock.

The  company  may redeem the Series D Preference  Stock,  in
whole or in part, after January 21, 1996, for $100 per share
plus  accrued dividends, provided that the market  price  of
common  stock as of the date of the decision to  redeem  the
shares,  as  defined  in  the Certificate  of  Designations,
Preferences  and  Rights for the Series D Preference  Stock,
shall  be  at  least equal to 175 percent of the  conversion
price for the preference stock.  Mandatory annual redemption
of  the lesser of 50,000 shares or the number of shares then
outstanding  begins September 21, 1998, at  $100  per  share
plus accrued dividends.  In the event of liquidation of  the
company,  the  holders of outstanding  Series  D  Preference
Stock  shall be entitled to receive a distribution  of  $100
per share plus all accumulated and unpaid dividends.

The  company  had  outstanding 20,386 and 25,386  shares  of
cumulative,  convertible  Series  B  Preference   Stock   on
December 31, 1996 and 1995, respectively.  Cumulative annual
dividends  of $2.475 per share are payable quarterly.   Each
share  of Series B Preference Stock may be converted at  the
option  of  the holder to 3.216 shares of common stock.   In
the  event of the company's liquidation, the holders of  the
Series B Preference Stock are entitled to $55 per share plus
all accumulated and unpaid dividends.


Note 7:  Commitments

Total  rental  expense for 1996, 1995,  and  1994  was  $3.0
million, $3.1 million and $35.2 million, respectively.   The
1994  amount includes Dravo Basic Materials rental  expense.
The  minimum  gross  rentals under non-cancelable  operating
leases for these years were $12.4 million, $13.0 million and
$17.3   million,  respectively.   Of  these  amounts,  $10.2
million,  $10.5 million and $10.5 million in 1996, 1995  and
1994,  respectively, were provided for in  the  discontinued
operations provision.

The  minimum  future rentals under non-cancelable  operating
leases  and future rental receipts from subleases  to  third
parties  as  of  December  31, 1996  are  indicated  in  the
following  table.  Of the $6.9 million net minimum payments,
$3.3  million relates to, and has been expensed as part  of,
discontinued operations.

Minimum Future Rentals and Rental Receipts
<TABLE>
(In thousands)
<CAPTION>
<C>                                  <C>

1997                                 $ 12,487
1998                                    4,193
1999                                      312
2000                                       74
2001                                       49
After 2001                                 --

Total minimum payments required        17,115
Less: Sublease rental receipts       (10,203)

Net minimum payments                 $  6,912
</TABLE>

A  joint  venture phosphate mining operation, in  which  the
company is a 50-percent partner, has credit available  under
a  bank loan agreement for equipment purchases.  The company
would be required to repay the entire loan in the event of a
failure of both the joint venture and the other partner.  At
December  31, 1996 and 1995, $3.1 million and $4.6  million,
respectively, was borrowed under the agreement.

At  December  31, 1996 and 1995, the company had outstanding
letters  of  credit totaling $4.8 million and $5.0  million,
respectively.


Note 8:  Contingent Liabilities

The company has been notified by the federal Environmental
Protection Agency (EPA) that the EPA believes the company is a
potentially responsible party (PRP) for the clean-up of soil and
groundwater contamination at four sub-sites in Hastings, NE.  The
Hastings site is one of the EPA's priority sites for taking
remedial action under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA).

The company participated in an EPA-initiated allocation
proceeding for a municipal landfill sub-site to allocate shares
of liability for past response costs and costs of a proposed cap
of the landfill.  As part of this proceeding, the allocator
conducted a mediation session which resulted in a settlement
among the EPA and the PRPs.  Pursuant to the settlement, the
company agreed to pay $702,000, or 14.33 percent of the $4.9
million past costs and estimated source control costs for this
sub-site.  In exchange, the company received contribution
protection against third-party claims as well as a covenant from
the EPA not to sue for its past and future response costs at this
sub-site.

                              13-25

The company has also been notified by the EPA that the EPA
considers it a PRP at another municipal landfill in Hastings.  At
least three other parties (including the City of Hastings) are
considered by the EPA to be PRPs at this second sub-site.  At
this sub-site, the company has concluded that the City of
Hastings is primarily responsible for proper closure of the
landfill and the remediation of any release of hazardous
substances.  In January, 1994, the EPA invited the company and
the other PRPs to make an offer to conduct a remedial
investigation and feasibility study (RI/FS) of this sub-site and
stated that the EPA was in the process of preparing a work plan
for the RI/FS.  None of the PRPs has volunteered to undertake the
RI/FS.

With respect to the third sub-site, the company and two other
PRPs have been served with administrative orders directing them
to undertake soil remediation and interim groundwater remediation
at that sub-site.  The company is currently complying with these
orders while reserving its right to seek reimbursement from the
United States for its costs if it is determined it is not liable
for response costs or if it is required to incur costs because of
arbitrary, capricious or unreasonable requirements imposed by the
EPA.



The EPA has taken no legal action with respect to its demand that
the company and the other PRPs pay its past response costs.  A total
of five parties have been named by the EPA as PRPs at this sub-
site, but two of them have been granted de minimis status.  The
company believes other persons should also be named as PRPs.

The fourth sub-site is a former naval ammunition depot which was
subsequently converted to an industrial park.  The company and
its predecessor owned and operated a manufacturing facility in
this industrial park.  To date, the company's investigation
indicates that it did not cause the release of hazardous
substances at this sub-site during the time it owned and operated
the facility. The United States has undertaken to conduct the
remediation of this sub-site.

In addition to sub-site clean-up, the EPA is seeking a clean-up
of area-wide contamination associated with all of the sub-sites
in and around Hastings, NE.  The company, along with other
Hastings PRPs, has recommended that the EPA adopt institutional
controls as the area-wide remedy in Hastings.  The EPA has
indicated some interest in this proposal but has decided to first
conduct an area-wide remedial investigation before choosing a
remedy.

On August 10, 1992, the company filed suit in the Alabama
District Court against its primary liability insurance carriers
and one of its predecessor's insurers, seeking a declaratory
judgment that the company is entitled to a defense and indemnity
under its contracts of insurance (including certain excess
policies provided by one of the primary carriers) with regard to
the third Hastings sub-site.  On motion of the defendant
insurance carriers, the suit was transferred to the District
Court for the Western District of Pennsylvania on October 31,
1996.  The company has settled the claim against its
predecessor's insurer, but the case against the company's
insurers is still in litigation.  An award of punitive damages is
also being sought against the company's insurers for their bad
faith in failing to investigate the company's claim and/or
denying the company's claim.  The company has notified its
primary and excess general liability carrier, as well as the
excess carrier of its predecessor, of the receipt of its notice
of potential liability at the second and fourth sub-sites.



Note 8:  Contingent Liabilities (continued)

Estimated total clean-up costs, including capital outlays and
future maintenance costs for soil and groundwater remediation of
approximately $14 million, are based on independent engineering
studies.  Included in the discontinued operations provision is
the company's estimate that it will participate in 33 percent of
these remediation costs.  The company's estimated share of the
costs is based on its assessment of the total clean-up costs, its
potential exposure, and the viability of other named PRPs.  These
estimates are, by their nature, uncertain and dependent upon
numerous factors, any of which could cause actual results to
differ materially from projected amounts.

Other claims and assertions made against the company will be
resolved, in the opinion of management, without material
additional charges to earnings.


Note 9:  Retirement Plans

The   company   has  several  defined  benefit   plans   covering
substantially all employees.  Benefits for the salaried plan  are
based  on  salary  and years of service, while hourly  plans  are
based on negotiated benefits and years of service.  The company's
funding policy is to make such contributions as are necessary  to
provide assets sufficient to meet the benefits to be paid to plan
members  in  accordance  with the requirements  of  the  Employee
Retirement Income Security Act of 1974.  Plan assets are composed
primarily  of  government  securities  and  corporate  debt   and
equities.

In 1996, the company changed the date it measures plan assets and
obligations to September 30.  The following table reconciles  the
plans'  funded status as of September 30, 1996 and  December  31,
1995 to the amounts recognized in the company's balance sheets at
December 31, 1996 and 1995, respectively:

                              13-26
<TABLE>
                                 1996                               1995
                 Plans which have   Plans which have   Plans which have   Plans which have
                   funded assets       accumulated       funded assets       accumulated
                    in excess of          benefit         in excess of          benefit
                    accumulated        obligations        accumulated        obligations
                      benefit          in excess of         benefit          in excess of
(In thousands)      obligations       funded assets       obligations       funded assets
<CAPTION>
<S>                      <C>            <C>                 <C>               <C>

Actuarial present
 value of projected
 benefit obligation:
Vested employees         $157,288       $24,628             $179,649          $27,100
Non-vested employees          153         1,201                  277              855
Accumulated benefit
 obligation               157,441        25,829              179,926           27,955
Effect of projected
 future salary increases    2,865         1,480                3,264            1,410
Total projected
 benefit obligation       160,306        27,309              183,190           29,365
Plan assets including
 fourth quarter
 contributions            157,442        19,720              182,661           19,555
Assets less than projected
 benefit obligation        (2,864)       (7,589)                (529)          (9,810)
Unamortized net
 liability existing
 at transition date            --           280                   --              325
Unrecognized net loss from
 actuarial experience      27,275         4,622               22,450            7,187
Recognition of additional
 minimum liability             --        (4,093)                  --           (6,175)
Prepaid (accrued)
 pension expense         $ 24,411       $(6,780)            $ 21,921          $(8,473)
</TABLE>
              

Note 9:  Retirement Plans (continued)

The sale of Dravo Basic Materials' assets resulted in the termination
of  employment  for essentially all Dravo Basic Materials  employees
and  certain executive and administrative employees of a  subsidiary
company.   As a result, the company recognized a charge in 1994  for
pension  curtailment and special termination benefits expense.   The
components  of 1996, 1995 and 1994 net periodic pension expense  are
as follows:
<TABLE>
                                        Years ended December 31,
                                         1996     1995     1994
<CAPTION>
(In thousands)
<S>                                    <C>      <C>      <C>

Service cost of benefits
 earned during the year              $    670   $  470 $  1,023
Interest cost on projected
 benefit obligation                    15,098   14,356   13,981
Actual (return) loss on
 plan assets                            2,299 (52,972)   14,570
Net amortization (deferral)           (16,430)   38,446 (29,521)
Curtailment and special
 termination benefits expense              --       --      921

Net pension expense for year         $  1,637   $  300 $    974
</TABLE>

Expected long-term rate of
 return on assets used to determine
 net pension expense                    7.75%     9.0%     8.0%

The  following  assumptions were used for the  valuation  of  the
pension  obligations as of September 30, 1996  and  December  31,
1995 and 1994:
<TABLE>
<CAPTION>
                                         1996     1995     1994
<S>                                      <C>     <C>      <C>

Discount rate                            8.0%    7.25%    8.55%
Rate of increase in
 compensation levels                     5.0%     5.0%     5.0%
</TABLE>


Note 10:  Postretirement and Postemployment Benefits

The  company provides health care and life insurance benefits for
retired  employees.   Employees may become eligible  for  certain
benefits  if  they meet eligibility qualifications while  working
for  the  company.  The company participates in various  Medicare
HMOs.   Retirees  have the option of joining a  Medicare  HMO  or
selecting   other  health  care  plans;  however,   the   company
contributes  a  fixed  amount toward the  cost  of  the  coverage
regardless of the plan selected.

                              13-27

The   company   accrues  for  the  expected  cost  of   providing
postretirement  benefits  to  the  employee  and  the  employee's
beneficiaries  and  covered  dependents  during  the   years   of
employment   service.   Expense  in  1994  included  a   $471,000
curtailment  loss resulting from the termination  of  essentially
all  Dravo  Basic Materials employees and certain  executive  and
administrative employees of a subsidiary company due to the Dravo
Basic Materials asset sale.

No  funds  are  segregated for future postretirement obligations.
The  company is amortizing its accumulated postretirement benefit
obligation (APBO) over a 20-year period.  The APBO was calculated
using a discount rate of 8.0 percent and a health care cost trend
rate  of 8.25 percent in 1997, gradually declining to 6.0 percent
in  2001.   An increase in the health care cost trend rate  of  1
percent  would  increase  the APBO  at  September  30,  1996,  by
$126,000  and  the total service and interest rate components  of
the 1996 postretirement benefit cost by $10,000.

Postretirement benefit cost for 1996, 1995 and 1994 includes  the
following components:


Note 10:  Postretirement and Postemployment Benefits (continued)
<TABLE>
(In thousands)                         1996     1995    1994
<CAPTION>
<S>                                   <C>      <C>      <C>

Service cost - benefits earned
 during the period                   $   31   $   44   $  105
Interest cost on accumulated
 postretirement benefit obligation    1,516    2,683    2,659
Net amortization and deferral         1,192    1,705    1,789
Curtailment loss                         --       --      471

Postretirement benefit cost          $2,739   $4,432   $5,024
</TABLE>

In   1996,  the  company  changed  the  date  it  measures   plan
obligations to September 30.  The following table reconciles  the
plans'  funded status as of September 30, 1996 and  December  31,
1995 to the amounts recognized in the company's balance sheets at
December 31, 1996 and 1995, respectively:
<TABLE>
(In thousands)                                  1996        1995
<CAPTION>
<S>                                            <C>         <C>

Accumulated postretirement
 benefit obligation:
 Retirees and related beneficiaries           $ 18,296   $ 21,505
 Other fully eligible participants                 870      1,284
 Other active participants not fully eligible      854        866

Accumulated postretirement
 benefit obligation:                            20,020     23,655

 Fourth quarter cash flow                         (232)        --
 Unrecognized transition obligation            (13,520)   (15,122)
 Unrecognized net loss                         ( 4,468)   ( 6,536)

Accrued postretirement
 benefit liability                            $  1,800   $  1,997
</TABLE>

The  company  adopted  the provisions of Statement  of  Financial
Accounting   Standards  No.  112,  "Employers'   Accounting   for
Postemployment  Benefits" (SFAS 112) effective January  1,  1994.
SFAS  112  requires  accrual of the estimated  cost  of  benefits
provided  by  the  employer  to  former  or  inactive  employees,
including  their  beneficiaries  and  covered  dependents,  after
employment  but before retirement.  A charge of $1.4 million  was
recorded in the first quarter as a cumulative effect for a change
in  accounting  principle  to recognize the  company's  estimated
liability for postemployment benefits covered by SFAS 112.


                              13-28
                                

Note   11:    Stock  Options,  Stock  Appreciation   Rights   and
Performance Shares

The  company  has awarded to executives and key employees  common
stock   options  and  stock  appreciation  rights  (collectively,
rights) under four plans: the 1978 Plan, the 1983 Plan, the  1988
Plan  and the 1994 Plan.  Under the 1988 and 1994 Plans,  options
may  be  granted  either alone or in tandem  with  related  stock
appreciation rights, or stock appreciation rights may be  granted
separately.  The 1983 Plan provided for the granting of  options,
stock  appreciation rights (either separate or in tandem  with  a
related  option)  and performance shares.   The  price  of  stock
options and the basis of stock appreciation rights so granted  is
the  average of the company's high and low market prices  on  the
grant date.  Rights cannot be exercised until one year after  the
grant date and expire 10 years from date of grant.  No additional
grants  can  be made from the 1978 or 1983 Plans, both  of  which
have  expired.   There were no performance shares outstanding  at
December 31, 1996 and 1995.

Any   incremental   value  of  stock  appreciation   rights   and
performance  shares  granted is recognized as  expense,  while  a
decline  in  the  market value of the stock is  recognized  as  a
reduction in expense to the extent previously recognized.   There
was  no  change  in the incremental value during the  last  three
years.

Statement  of Financial Accounting Standards No. 123, "Accounting
for  Stock-Based  Compensation"  (SFAS  123)  requires  financial
statements for fiscal years beginning after December 15, 1995  to
estimate  the fair value of stock-based compensation  awarded  to
employees  in 1995 and thereafter.  SFAS 123 allows companies  to
choose between continuing to account for stock-based awards using
the intrinsic value, as prescribed by Accounting Principles Board
Opinion  No. 25 (APB 25), or the fair value.  The company applies
APB 25 and related Interpretations in accounting for options.

The  fair  value of each stock option grant awarded in  1996  and
1995  was  estimated on the date of grant using the Black-Scholes
option   pricing  model.   The  weighted  average   fair   values
determined by the model and assumptions used are presented below:
<TABLE>
                                         1996           1995
<CAPTION>
<S>                                     <C>            <C>

Weighted average fair value             $ 5.17         $ 5.08
Risk-free interest rate                   6.6%           6.8%
Expected dividend yield                     0%            0%
Expected option life                      6.0            6.0
Expected volatility                      23.96%         23.96%

</TABLE>

The  table  below  shows  the pro forma amounts  for  income  and
earnings  per share at December 31 assuming compensation  expense
had been recorded at fair value:
<TABLE>
(In thousands, except per share data)
<CAPTION>
                                             1996           1995
<S>                                        <C>            <C>
Net income
  As reported                              $14,128        $10,981
  Pro forma                                 13,129          9,844

Earnings per share
  As reported                                $0.78          $0.57
  Pro forma                                  $0.71          $0.49
</TABLE>
                              13-29

Note   11:    Stock  Options,  Stock  Appreciation   Rights   and
              Performance Shares (continued)

The following summary shows the changes in outstanding rights for
the last three years:
<TABLE>
                                                    Weighted
                                  Exercise Price     Average
                      Shares        Per Share     Exercise Price
<CAPTION>
 <S>                <C>           <C>                 <C>

Outstanding at                                           
 January 1, 1994    1,298,950     $ 5.94 - $19.31     $12.60
Granted                12,000         $11.69          $11.69
Exercised             (11,300)    $ 7.94 - 11.25      $ 9.78
Expired               (13,100)        $11.25          $11.25
Outstanding at                                           
 December 31, 1994  1,286,550     $ 5.94 - $19.31     $12.63
                                                         
Granted               417,500     $10.69 - $14.06     $12.92
Exercised            ( 59,750)    $ 5.94 - $11.88     $ 9.26
Forfeited            (144,700)    $10.25 - $19.31     $13.80
Expired              ( 27,050)        $14.38          $14.38
Outstanding at                                           
 December 31, 1995  1,472,550     $ 5.94 - $19.31     $12.70
                                                         
Granted                63,500     $13.12 - $13.56     $13.18
Exercised             (25,500)    $ 5.94 - $11.88     $ 9.72
Forfeited             (27,150)    $10.25 - $19.31     $14.84
Outstanding at                                           
 December 31, 1996  1,483,400     $ 5.94 - $19.31     $12.74

The outstanding stock options at December 31, 1996 have an
estimated weighted average contractual life of 4.8 years.

Rights
exercisable at                                                   
December 31, 1996    1,419,900    $5.94 - $19.31      $12.72
                                                                 
Shares available                                                 
 for future grants
 at December 31,
 1996                  624,500
</TABLE>


Note 12:  Shareholders' Equity

Components  of  shareholders'  equity  at  December  31   (except
retained  earnings,  which  is  set  forth  in  the  Consolidated
Statements of Retained Earnings) are presented below:
<TABLE>
                                    Preference  Common    Other   Treasury
(In thousands)                         Stock     Stock   Capital   Shares
<CAPTION>
<S>                                     <C>   <C>       <C>      <C>

Balance, January 1, 1994                $32   $14,968   $63,260  $(1,840)

Common shares issued through:
  Conversion of Series B
   Preference stock (12,864)            (4)        13       (9)
  Common stock options
   exercised (5,151)                                5        37
Minimum pension liability adjustment                        266

Balance, December 31, 1994             $28    $14,986   $63,554  $(1,840)

Common shares issued through:
  Conversion of Series B
   Preference stock (9,648)            (3)          9        (6)
  Common stock options
   exercised (59,750)                              60       496
Purchase of treasury shares (228,470)                             (2,667)
Minimum pension liability adjustment                     (3,226)

Balance, December 31, 1995            $25     $15,055   $60,818  $(4,507)

Common shares issued through:
  Conversion of Series B
   Preference stock (16,080)           (5)         16       (11)
  Common stock options
   exercised (25,500)                              26       222
Executive incentive
 compensation (9,523)                                        (5)     113
Directors' fees (5,000)                                      15       52
Minimum  pension liability adjustment                     2,038     

Balance, December 31, 1996           $20      $15,097   $63,077  $(4,342)
</TABLE>

                              13-30


Note 13:  Income Taxes

Income before taxes and provisions for income tax expense from
continuing operations at December 31 are:
<TABLE>
(In thousands)                           1996      1995      1994
<CAPTION>
<S>                                   <C>       <C>        <C>

Income before taxes                   $14,128   $11,321    $5,527

Current federal income taxes          $    --   $    --    $  350
Deferred federal income taxes              --        --        --
Current state income taxes                 --       340       247

  Total                               $     0   $   340    $  597
</TABLE>

The actual income tax expense attributable to earnings from
continuing operations differed from the amounts computed by
applying the U. S. federal tax rate of 35 percent in 1996 and 34
percent in 1995 and 1994 to pretax earnings from continuing
operations as a result of the following:
<TABLE>
(In thousands)                           1996      1995      1994
<CAPTION>
<S>                                   <C>       <C>       <C>

Computed "expected" tax expense       $ 4,945   $ 3,849   $ 1,879
Alternative minimum tax                    --        --       300
Percentage depletion                   (  720)   (  992)   (1,880)
State income taxes, net of federal
 income tax benefit                        --       224       163
Other items                               553        51       135
Benefit of operating
 loss carryforwards                    (4,778)   (2,792)       --

  Provision for income tax               $  0  $    340   $   597
</TABLE>

Note 13:  Income Taxes (continued)

The significant components of the deferred income tax expense
(benefit) attributable to income from continuing operations for the
years ended December 31 are as follows:
<TABLE>
(In thousands)                                     1996      1995      1994
<CAPTION>
<S>                                               <C>      <C>       <C>

Deferred tax expense (benefit)(exclusive of the
 effect of other component listed below)          $ 1,552  $(6,058)  $  1,340
Increase (decrease) in balance of the valuation
  allowance for deferred tax assets                (1,552)   6,058     (1,340)

  Total                                           $    --  $    --   $     --
</TABLE>

The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at December 31 are as follows:
<TABLE>
                                                   1996      1995
<CAPTION>
<S>                                             <C>       <C>

Deferred tax assets:
 Provision for discontinued operations          $ 4,580   $ 3,008
 Accounts receivable, principally due
  to allowance for doubtful accounts                 59       302
 Inventories, principally due to additional
  costs inventoried for tax purposes
  pursuant to the Tax Reform Act of 1986              6        19
 Compensated absences, principally due to
  accrual for financial reporting purposes          500       500
 Net operating loss carryforwards                62,808    67,229
 Investment tax credit carryforwards                976     1,722
 Other                                              916     1,022

Total gross deferred tax assets                  69,845    73,802
 Less valuation allowance                       (34,829)  (36,381)

Net deferred tax assets                          35,016    37,421

Deferred tax liabilities:
 Properties and equipment, principally due
  to depreciation                                 5,810     6,417
 Pension accrual                                  4,353     6,151

Total gross deferred tax liabilities             10,163    12,568

Net deferred tax asset                         $ 24,853  $ 24,853
</TABLE>


Note 13:  Income Taxes (continued)

The net change in the total valuation allowance for the years
ended December 31, 1996 and 1995 was a decrease of $1.6 million
and an increase of $6.1 million, respectively.

The company had NOLs of approximately $179.5 million at December
31, 1996, because of losses associated with discontinued
businesses.  These NOLs expire as follows:
<TABLE>
(In thousands)
<CAPTION>
<C>                                        <C>

2002                                       $ 1,601
2003                                        76,662
2004                                        38,856
2005                                        17,222
2006                                         6,471
2007                                         1,629
2008                                        15,031
2009                                        12,008
2010                                         9,973
</TABLE>
                              13-31

Tax benefits of $1.0 million for investment tax credits expiring
in 1997 and later are also being carried forward.

Current accounting standards require that deferred income taxes
reflect the tax consequences on future years of differences
between the tax bases of assets and liabilities and their bases
for financial reporting purposes.  In addition, future tax
benefits, such as NOLs, are required to be recognized to the
extent that realization of such benefits is more likely than not.
A valuation allowance is established for those benefits that do
not meet the more likely than not criteria.


Note 13:  Income Taxes (continued)

In assessing the valuation allowance established at December 31,
1996 and 1995, estimates were made as to the potential financial
impact on the company should resolution of the remaining
substantive uncertainty associated with discontinued operations
substantially exceed management's estimates.  The uncertainty
involves the Hastings, Nebraska, environmental matter and is
discussed more fully in Note 8, Contingent Liabilities.
Management's position is to vigorously pursue its claims against
other PRPs and to contest the liability for environmental clean-
up.  In determining the appropriate valuation allowance, however,
management has used the upper limit of the potential financial
impact estimated for this matter.  Also, operating profits were
lower than forecasted in 1996 primarily due to operational
difficulties and higher-than-expected expenses at Black River.

Management believes that the company will generate sufficient
future taxable income to realize the entire deferred tax asset
prior to expiration of any NOLs and that the realization of a
$24.9 million net deferred tax asset is more likely than not.
Income projections for the contract lime business are based on
historical information adjusted for contract terms. In order to
fully realize the net deferred tax asset, the company will need
to generate future taxable income of approximately $70.9 million
prior to the expiration of the NOLs.

Historically, Dravo Lime's cumulative taxable earnings for the
past five years total $61.5 million.  There can be no assurance,
however, that the company will generate enough taxable income to
realize the deferred tax asset prior to the NOLs expiring.


Note 14:  Extraordinary Item

In conjunction with the sale of DBMs' assets, existing loan
agreements were substantially altered, including a $35 million
reduction in the amount available under a revolving credit
facility.  Also, while negotiating a financing agreement with
Prudential Power Funding for the Black River expansion, the
company purchased a call option that enabled it to prepay on May
17, 1995, without penalty, amounts outstanding under the
financing agreement.  Cash received from the Dravo Basic
Materials asset sale equaling the outstanding principal on the
Prudential Power Funding facility, interest through May 16, 1995
and an exit fee was placed in escrow.  With Prudential Power
Funding's consent, the entire amount borrowed was prepaid.  The
fees associated with these agreements were written off as an
extraordinary item in 1994.



Note 15: Fair Value of Financial Instruments

The fair value of financial instruments without extended
maturities equals their carrying values.  The estimated fair
value of financial instruments with extended maturities at
December 31 is presented below:
<TABLE>
(In thousands)
<CAPTION>
                                           1996                1995

                                   Carrying    Fair      Carrying   Fair
                                    Value      Value      Value     Value
<S>                                <C>        <C>         <C>       <C>

Notes payable                      $69,701    $70,623     $70,391   $72,124
Series D Preference Stock           20,000     22,533      20,000    23,242
</TABLE>

The carrying amounts of notes receivable approximate fair value.
The fair value of notes payable and the Series D Preference Stock
is based upon the amount of future cash flows associated with
each instrument discounted using the company's estimated
borrowing rate for similar debt instruments of comparable
maturity.  The Preference Stock fair value also includes an
estimated factor to value the conversion feature.

Fair value estimates are made at a specific point in time, based
on relevant market information and information about the
financial instrument.  These estimates are subjective in nature
and involve uncertainties and matters of significant judgment and
therefore cannot be determined with precision.  Changes in
assumptions could significantly affect the estimates.


Note 16:  Research and Development

Research and development activity for the years ended December 31
is as follows:
<TABLE>

(In thousands)                                1996      1995      1994
<CAPTION>
<S>                                         <C>       <C>       <C>

Total research and development expense      $3,742    $3,558    $4,393

Billings to third parties                    1,784     1,255     2,361

Net research and development expense        $1,958    $2,303    $2,032
</TABLE>


                              13-32

Note 17: Interim Financial Information
<TABLE>
(Unaudited, in millions,                First    Second     Third  Fourth
 except earnings per share)            Quarter   Quarter   Quarter Quarter
<CAPTION>
<S>                                    <C>        <C>       <C>      <C>

1996
Revenue                                $38.2      $39.3     $40.8    $39.8
Gross profit                             9.7        9.3      10.6     10.4
Earnings before taxes
 from continuing operations              3.2        3.6       3.7      3.6
Provision (benefit) for income taxes     0.1        0.1       0.1     (0.3)
Net earnings                             3.1        3.5       3.6      3.9
Net earnings per share                  0.17       0.19      0.20     0.22

1995
Revenue                                $33.9      $35.7     $37.8    $38.6
Gross profit                             8.7        9.5       9.5      8.8
Earnings before taxes from
 continuing operations                   2.7        2.9       3.1      2.6
Provision (benefit) for income taxes     0.2        0.2       0.2     (0.3)
Net earnings                             2.5        2.7       2.9      2.9
Net earnings per share                  0.13       0.14      0.15     0.15

</TABLE>

                                 13-33

Management's Report

The   consolidated  financial  statements  and  other   financial
information appearing in this Annual Report were prepared by  the
management of Dravo Corporation, which is responsible  for  their
integrity and objectivity.  These financial statements have  been
prepared   in  conformity  with  generally  accepted   accounting
principles  and  include  amounts  that  are  based  on  informed
judgments  and  estimates of the expected effects of  events  and
transactions.

Dravo   maintains  a  system  of  internal  controls  to  provide
reasonable  assurance  as  to the reliability  of  the  financial
records  and  the  protection of assets.  This  internal  control
system  is  supported  by  careful  selection  and  training   of
qualified personnel, and a broad program of internal audits.   In
addition, the company's business ethics policy requires employees
to maintain the highest level of ethical standards in the conduct
of  the  company's  business, and their compliance  is  regularly
monitored.

The company's financial statements have been audited by KPMG Peat
Marwick LLP, independent certified public accountants.  As stated
in  their  report,  their  audit  was  made  in  accordance  with
generally accepted auditing standards and included such study and
evaluation   of  the  company's  system  of  internal  accounting
controls  as  they considered necessary to determine the  nature,
timing  and  extent  of  the  auditing  procedures  required  for
expressing an opinion on the company's financial statements.

The  Board  of  Directors,  acting through  its  Audit  Committee
composed  exclusively of outside directors, reviews and  monitors
the  company's  financial reports and accounting practices.   The
Board   of  Directors,  upon  the  recommendation  of  the  Audit
Committee,  appoints the independent certified public accountants
subject to ratification by the shareholders.  The Audit Committee
meets  periodically  with management, the  Director  of  Internal
Auditor  and  the  independent auditors. These  meetings  include
discussions of internal accounting control, results of audit work
and the quality of financial reporting.  Financial management  as
well as the Director of Internal Auditor and independent auditors
have full and free access to the Audit Committee.



Independent Auditors' Report


The Board of Directors and Shareholders
Dravo Corporation:

We  have audited the accompanying consolidated balance sheets  of
Dravo  Corporation and subsidiaries as of December 31,  1996  and
1995,  and  the  related consolidated statements  of  operations,
retained  earnings and cash flows for each of the  years  in  the
three-year  period  ended December 31, 1996.  These  consolidated
financial  statements  are the responsibility  of  the  company's
management.  Our responsibility is to express an opinion on these
consolidated 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 consolidated financial statements referred to
above  present  fairly, in all material respects,  the  financial
position of Dravo Corporation and subsidiaries as of December 31,
1996 and 1995, and the results of their operations and their cash
flows  for  each  of  the  years in the three-year  period  ended
December   31,  1996,  in  conformity  with  generally   accepted
accounting principles.

As discussed in Note 10 to the consolidated financial statements,
the  company  adopted the method of accounting for postemployment
benefits   prescribed   by  Statement  of  Financial   Accounting
Standards No. 112 in 1994.


KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
January 22, 1997


                              13-34

                        Five-Year Summary
<TABLE>
Years ended December 31,         1996      1995      1994      1993    1992
<CAPTION>

($ Amounts in millions, except per share data)
<S>                            <C>       <C>       <C>       <C>       <C>

Summary of operations:
Revenue                        $158.1    $146.1    $278.1    $277.6    $273.0
Gross profit                     40.0      36.5      44.0      49.3      51.7
Interest expense                  6.4       4.8      12.4       9.2      10.5
Depreciation expense             10.1       9.5      17.6      18.0      18.6
Earnings before taxes
 from continuing operations      14.1      11.3       5.5      10.5      12.7
Provision (benefit) for
 income taxes                      --       0.3       0.6     (24.6)      2.4
Earnings from continuing
 operations                      14.1      11.0       4.9      35.1      10.3
Loss from discontinued
   operations,  net  of
   income  taxes                   --        --      (6.5)    (35.3)       --
Extraordinary item                 --        --      (7.5)       --       1.6
Cumulative accounting change       --        --      (1.4)       --        --
Net earnings (loss)              14.1      11.0     (10.5)     (0.2)     11.9
Preferred dividends declared      2.5       2.5       2.5       2.6       2.6
Capital expenditures             20.0      33.1      44.8      13.6       8.5
Employees at year end             781       756       768     1,416     1,421

Summary of financial position:
Total assets                   $225.4    $213.3    $307.3    $272.1    $268.5
Working capital                   8.5       9.8       6.3      59.5      60.1
Long-term obligations and
 redeemable preference stock     83.5      84.3      62.4     108.5     108.1
Total debt and redeemable
 preference stock                89.7      90.4     147.5     113.0     112.8
Property, plant and
 equipment, net                 126.0     116.2      93.5     110.0     114.9
Shareholders' equity             93.9      79.9      76.7      89.5      95.0

Per common share data:
Earnings from continuing
  operations                  $  0.78    $ 0.57   $  0.16   $  2.20    $ 0.52
Loss from discontinued
 operations                        --        --     (0.44)    (2.38)       --
Extraordinary item                 --        --     (0.51)       --      0.11
Cumulative accounting change       --        --     (0.09)       --        --
Net earnings (loss)              0.78      0.57     (0.88)    (0.18)     0.63
Book value                       6.29      5.33      5.06      6.15      6.27
Shareholders at year end        2,741     2,924     3,192     3,442     3,376

Mineral resources (in millions of tons):
Proven and probable reserves
Total reserves                  623.7     522.2     502.1   1,121.2   1,142.1
Tons mined                        7.6       7.1      23.2      22.8      25.4
</TABLE>
                              13-35