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Alliance Resource Partners, L.P. Reports Twelfth Consecutive Year of Record Operating and Financial Results, Posting New Highs



  Alliance Resource Partners, L.P. Reports Twelfth Consecutive Year of Record
  Operating and Financial Results, Posting New Highs for Coal Volumes,
  Revenues and EBITDA; Increases Quarterly Unitholder Distribution 2.1% to
  $1.1075 Per Unit

And Provides Guidance for 2013

Business Wire

TULSA, Okla. -- January 29, 2013

Alliance Resource Partners, L.P. (NASDAQ: ARLP) today reported record
operating and financial results for the twelfth consecutive year, as it set
new benchmarks for coal sales and production volumes, revenues and EBITDA for
the year ended December 31, 2012 (the "2012 Period"). Led by record coal sales
volumes and pricing, revenues climbed to $2.0 billion for the 2012 Period, an
increase of 10.3% compared to the year ended December 31, 2011 (the "2011
Period"). Increased revenues and record coal production contributed to higher
EBITDA, which climbed to a record $581.1 million compared to $570.8 million
for the 2011 Period. Net income for the 2012 Period was $335.6 million, or
$6.12 per basic and diluted limited partner unit, compared to $389.4 million,
or $8.13 per basic and diluted limited partner unit, for the 2011 Period. The
decrease in net income for the 2012 Period is primarily due to increased
depreciation, depletion and amortization as a result of our growth projects.
(For a discussion of EBITDA and related reconciliations to comparable GAAP
financial measures, please see the end of this release.)

For the quarter ended December 31, 2012 (the "2012 Quarter"), revenues
increased 15.8% to $549.4 million, compared to the quarter ended December 31,
2011 (the "2011 Quarter "). Net income and EBITDA were also higher in the 2012
Quarter, as net income increased 5.4% to $96.6 million and EBITDA increased
28.9% to $166.5 million. Although net income for the 2012 Quarter increased,
net income per basic and diluted limited partner unit decreased to $1.87 per
unit in the 2012 Quarter compared to $1.93 per unit for the 2011 Quarter as a
result of increased incentive distributions paid to our managing general
partner.

ARLP also announced that the Board of Directors of its managing general
partner increased the cash distribution to unitholders for the 2012 Quarter to
$1.1075 per unit (an annualized rate of $4.43 per unit), payable on February
14, 2013 to all unitholders of record as of the close of trading on February
7, 2013. The announced distribution represents a 11.9% increase over the cash
distribution of $0.99 per unit for the 2011 Quarter and a 2.1% increase over
the cash distribution of $1.085 per unit for the 2012 third quarter (the
"Sequential Quarter").

"Our record of exceptional performance continued in 2012 as ARLP set new
benchmarks for coal sales and production volumes, average coal sales price per
ton, revenues and EBITDA," said Joseph W. Craft III, President and Chief
Executive Officer. "In addition to once again delivering record results, the
Alliance team also made significant progress in building for our future.
During 2012, we enhanced our Illinois Basin asset portfolio with the
acquisition of the Onton mine in April and completed our Northern Appalachian
mine development at Tunnel Ridge with the commencement of longwall production
in May. Our development of the new Gibson South mine and investments in White
Oak also continued to move forward as planned. Throughout the year, our
marketing team further strengthened ARLP's already solid long-term sales
contract book by securing new commitments to deliver approximately 31.7
million tons through 2018 at prices comparable to current realizations. We
also improved ARLP's financial flexibility by completing $950 million of new
revolving credit and term loan facilities in May. Delivering such superior
results in the face of extremely challenging market conditions speaks to the
hard work and dedication of the entire Alliance team. Our unitholders were
able to share in these accomplishments as well through distribution increases
of nearly twelve percent since this time last year."

Consolidated Financial Results

Twelve Months Ended December 31, 2012 Compared to Twelve Ended December 31,
2011

Record revenues in the 2012 Period were driven primarily by record coal sales
volumes and price realizations. Benefitting from the start-up of longwall
production at our Tunnel Ridge mine, the acquisition of the Onton mine and
increased production from our River View mine, ARLP set new records in the
2012 Period for both tons sold, which increased 10.2% to 35.2 million tons,
and tons produced, which rose 13.2% to 34.8 million tons, both as compared to
the 2011 Period. Reflecting our strong customer relationships and sales
contract position, ARLP's average coal sales price realized during the 2012
Period also increased to a record $56.28 per ton sold, despite reduced coal
sales volumes shipped into the metallurgical export markets.

ARLP’s increased coal sales and production volumes also contributed to higher
total operating expenses in the 2012 Period, which rose 15.2% to $1.3 billion.
In particular, higher materials and supplies expenses, labor-related expenses,
sales-related expenses and maintenance costs impacted operating expenses,
particularly in our Illinois Basin and Northern Appalachian regions. Outside
coal purchases decreased $15.7 million to $38.6 million in the 2012 Period,
compared to the 2011 Period, primarily as a result of reduced purchases of
brokerage coal and coal for sale into the metallurgical export market.

These factors contributed to an increase in total Segment Adjusted EBITDA
Expense of 13.0% in the 2012 Period compared to the 2011 Period. On a per ton
basis, however, the year-over-year increase to Segment Adjusted EBITDA Expense
was a more modest 2.6%. Reflecting ARLP's focus on cost control in all of its
operating regions, as well as the benefit of increased longwall production in
Northern Appalachia, Segment Adjusted EBITDA Expense per ton was $38.07 in the
2012 Period, compared to $37.12 in the 2011 Period. (For a definition of
Segment Adjusted EBITDA and Segment Adjusted EBITDA Expense per ton and
related reconciliations to comparable GAAP financial measures, please see the
end of this release).

Depreciation, depletion and amortization increased $57.8 million to $218.1
million in the 2012 Period, compared to the 2011 Period, primarily as a result
of the start-up of longwall production at the Tunnel Ridge mine, the addition
of the Onton mine and capital expenditures related to infrastructure
improvements at various other operations.

As previously reported, our Pontiki mine was temporarily idled on August 23,
2012 following a closure order by the Mine Safety and Health Administration.
The mine resumed operations on November 25, 2012 after the first phase of
required repairs was completed. Due to the temporary idling of the mine,
results for the 2012 Period were impacted by approximately $26.6 million of
related losses and charges, including a $19.0 million non-cash asset
impairment charge.

Comparative financial results for the 2012 Period were also impacted by the
anticipated pass through of losses related to ARLP’s investments in White Oak
Resources LLC (“White Oak”) and the development of its Mine No. 1. Our
preferred equity investment in White Oak requires ARLP to record substantially
all of White Oak’s income and losses until we achieve our contractual
preferred return. As a result, net equity in loss of affiliates in the 2012
Period primarily reflects approximately $15.3 million of losses related to
White Oak’s mine development activities compared to losses of $4.3 million for
the 2011 Period.

Three Months Ended December 31, 2012 Compared to Three Months Ended December
31, 2011

For the 2012 Quarter, higher coal sales volumes drove revenues up 15.8% to
$549.4 million, compared to the 2011 Quarter. Higher sales volumes,
particularly from the new longwall operation at our Tunnel Ridge mine, the
recently acquired Onton mine and increased production from our River View
mine, pushed coal sales volumes to 9.8 million tons in the 2012 Quarter, an
increase of 19.8% compared to the 2011 Quarter. The lack of coal sales into
the metallurgical export markets drove total average coal sales prices lower
in the 2012 Quarter to $55.00 per ton sold, a $1.57 per ton decrease compared
to the 2011 Quarter.

Operating expenses rose 20.1% compared to the 2011 Quarter to $356.5 million,
primarily due to the factors discussed above as well as increased costs
associated with the continued ramp-up of longwall production at our Tunnel
Ridge mine and higher operating expenses resulting from operating activities
and production at our recently acquired Onton mine. Outside coal purchases
decreased $20.9 million in the 2012 Quarter due to the previously discussed
decreases in coal brokerage and purchasing activity. As discussed below,
Segment Adjusted EBITDA Expense per ton declined to $36.79 in the 2012
Quarter, an improvement of 6.6% compared to the 2011 Quarter and 4.4% compared
to the Sequential Quarter.

Depreciation, depletion and amortization increased $20.1 million to $63.2
million in the 2012 Quarter compared to the 2011 Quarter, primarily as a
result of our production growth and investments in infrastructure and
equipment at various operations. In addition, net interest expense increased
$12.5 million, compared to the 2011 Quarter, primarily as a result of a
non-recurring adjustment to capitalized interest in the 2011 Quarter.

                                                                  
Regional Results and Analysis
                                                                     
(in millions,        2012         2011       % Change    2012
except per ton       Fourth       Fourth     Quarter     Third      % Change
data)                Quarter      Quarter    /           Quarter    Sequential
                                             Quarter
                                                                     
Illinois Basin
Tons sold            7.885        6.429      22.6%       6.919      14.0%
Coal sales price     $52.66       $50.63     4.0%        $52.20     0.9%
per ton (1)
Segment Adjusted
EBITDA Expense       $30.76       $31.55     (2.5)%      $32.04     (4.0)%
per ton (2)
Segment Adjusted     $173.1       $122.9     40.8%       $140.3     23.4%
EBITDA (2)
                                                                     
Central
Appalachia
Tons sold            0.426        0.629      (32.3)%     0.523      (18.5)%
Coal sales price     $80.38       $81.59     (1.5)%      $79.96     0.5%
per ton (1)
Segment Adjusted
EBITDA Expense       $80.18       $65.53     22.4%       $68.04     17.8%
per ton (2)
Segment Adjusted     $0.1         $10.1      (99.0)%     $6.2       (98.4)%
EBITDA (2)
                                                                     
Northern
Appalachia
Tons sold            1.431        0.857      67.0%       1.467      (2.5)%
Coal sales price     $59.45       $83.40     (28.7)%     $65.43     (9.1)%
per ton (1)
Segment Adjusted
EBITDA Expense       $52.58       $69.43     (24.3)%     $55.73     (5.7)%
per ton (2)
Segment Adjusted     $10.6        $12.8      (17.2)%     $15.8      (32.9)%
EBITDA (2)
                                                                     
Total (3)
Tons sold            9.787        8.171      19.8%       8.910      9.8%
Coal sales price     $55.00       $56.57     (2.8)%      $56.00     (1.8)%
per ton (1)
Segment Adjusted
EBITDA Expense       $36.79       $39.39     (6.6)%      $38.48     (4.4)%
per ton (2)
Segment Adjusted     $181.3       $142.8     27.0%       $160.2     13.2%
EBITDA (2)
                                                                     
(1) Sales price per ton is defined as total coal sales divided by total tons
sold.
(2) For definitions of Segment Adjusted EBITDA expense per ton and Segment
Adjusted EBITDA and related reconciliations to comparable GAAP financial
measures, please see the end of this release.
(3) Total includes White Oak, other, corporate and eliminations.
                                                                     

Reflecting higher Illinois Basin and Northern Appalachia sales volumes, ARLP
sold a record 9.8 million tons of coal in the 2012 Quarter, an increase of
19.8% over the 2011 Quarter. Coal sales volumes in the Illinois Basin
increased from the 2011 and Sequential Quarters primarily as a result of
strong sales and production performance from the River View, Warrior, Gibson
North and Pattiki mines, as well as additional production from the Onton mine
acquisition. In Central Appalachia, lower coal sales volumes compared to the
2011 Quarter reflect the previously discussed temporary idling of the Pontiki
mining complex due to regulatory actions and poor mining conditions at our MC
Mining mine. Compared to the Sequential Quarter, lower coal recoveries at both
Central Appalachian mines and fewer unit shifts at our MC Mining mine
contributed to lower coal sales volumes. Coal sales volumes in Northern
Appalachia increased from the 2011 Quarter reflecting the start-up of longwall
production at the Tunnel Ridge mine in May 2012. Compared to the Sequential
Quarter, Northern Appalachia coal sales decreased due to a lack of sales into
the export coal market from our Mettiki mine in the 2012 Quarter. As
anticipated, total coal inventory fell significantly during the 2012 Quarter,
decreasing by approximately 620,000 tons to approximately 350,000 tons at the
end of 2012.

Coal sales prices realized by ARLP in the 2012 Quarter were lower compared to
the 2011 and Sequential Quarters primarily due to reduced metallurgical export
sales from our Northern Appalachia Mettiki mine complex.

Total Segment Adjusted EBITDA Expense per ton in the 2012 Quarter declined
6.6% compared to the 2011 Quarter, primarily as a result of increased longwall
production at the Tunnel Ridge mine, reduced outside coal purchases and lower
per ton costs for roof control and maintenance. In the Illinois Basin, Segment
Adjusted EBITDA Expense per ton improved in both the 2012 and Sequential
Quarters primarily due to the above discussed performance of our River View,
Warrior, Gibson North and Pattiki mines. In Central Appalachia, the idling of
the Pontiki mining complex and related repair costs incurred to resume
production drove Segment Adjusted EBITDA Expense per ton higher in the 2012
Quarter compared to both the 2011 and Sequential Quarters. Central Appalachia
was also impacted by increased costs related to the start-up of production in
a new area of the MC Mining operation. Segment Adjusted EBITDA Expense per ton
improved in Northern Appalachia during the 2012 Quarter compared to the 2011
Quarter, as the ramp-up of longwall production reduced cost per ton at Tunnel
Ridge. In addition, lower costs at our Mettiki mining complex reflect reduced
coal processing expenses as no coal was sold into the metallurgical export
markets during the 2012 Quarter. Compared to the Sequential Quarter, Northern
Appalachia benefited from a favorable workers’ compensation reserve adjustment
in the 2012 Quarter and lower outside coal purchases. (For a definition of
Segment Adjusted EBITDA and Segment Adjusted EBITDA Expense per ton and
related reconciliations to comparable GAAP financial measures, please see the
end of this release).

Outlook

Commenting on ARLP’s outlook, Mr. Craft said, "ARLP enters 2013 poised to post
our thirteenth consecutive year of record results. Coal sales and production
volumes are expected to increase year-over-year as we benefit from a full year
of production from the Onton mine and the continued ramp-up of longwall
production at Tunnel Ridge. With increased volumes and a highly contracted
sales portfolio, ARLP is also positioned to once again deliver increased
revenues and EBITDA in 2013."

For 2013, ARLP is providing the following full year guidance for its operating
and investment activities:

Capital Expenditures and Investments – Total 2013 capital expenditures for
ARLP’s operating activities are currently estimated in a range of $370.0 to
$400.0 million, including maintenance capital expenditures. Major capital
projects include production expansions related to continuing development of
our Gibson South mine (approximately $90.0 to $100.0 million) and reserve
acquisitions and construction of surface facilities related to our
participation in the White Oak Mine No. 1 development project (approximately
$40.0 to $50.0 million). Maintenance capital expenditures anticipated during
2013 reflect equipment rebuilds and replacements, mine extension projects at
various mines, and infrastructure projects at several operations. Based on
anticipated maintenance capital requirements in 2013 and considering its
current five-year planning horizon, ARLP is currently estimating total average
maintenance capital expenditures of approximately $5.70 per ton produced for
long-term distribution planning purposes.

During 2013, ARLP also currently expects to fund approximately $70.0 to $90.0
million of its preferred equity investment commitment to White Oak. ARLP
continues to anticipate its investments in White Oak will become meaningfully
accretive to its financial results in the 2015 time frame following the
commencement of longwall production from the White Oak Mine No. 1.

As a result of ARLP’s capital investment projects and anticipated production
increases in 2013, depreciation, depletion and amortization expense is
currently expected to increase to approximately $275.0 million, compared to
$218.1 million in 2012.

Coal Production and Sales Volumes – Coal volumes are currently expected to
increase in 2013 to a range of 38.1 to 39.1 million tons produced and sold.
ARLP has approximately 38.5 million tons contractually committed and priced
for 2013 and has also secured coal sales commitments for approximately 30.7
million tons, 23.4 million tons and 18.7 million tons in 2014, 2015 and 2016,
respectively, of which approximately 2.9 million tons in both 2014 and 2015
and 3.3 million tons in 2016 remain open to market pricing.

Revenue, Cost and Margin Estimates –Driven primarily by anticipated increases
in coal sales volumes, ARLP is currently expecting 2013 revenues to increase
by 6.0% to 9.0% to a range of $2.1 to $2.2 billion, excluding transportation
revenues. ARLP's guidance does not currently assume any coal sales into the
metallurgical export markets in 2013 and, as a result, total average coal
sales price realizations are expected to be approximately 1.0% to 3.5% per ton
lower than last year. Total Segment Adjusted EBITDA Expense per ton in 2013 is
currently expected to be comparable to slightly lower than 2012 levels.
Consequently, ARLP is now anticipating total realized margins per ton in 2013
will be 2.0% to 4.0% below 2012 levels.

EBITDA and Net Income – For 2013, ARLP’s operating activities are currently
expected to generate EBITDA in a range of $600.0 to $650.0 million and net
income in a range of $300.0 to $350.0 million. The 2013 ranges for both
consolidated EBITDA and net income reflect the pass through of approximately
$20.0 to $30.0 million of losses related to ARLP's investments in White Oak.
(For a definition of EBITDA and related reconciliations to comparable GAAP
financial measures, please see the end of this release.)

A conference call regarding ARLP’s 2012 Quarter financial results is scheduled
for today at 10:00 a.m. Eastern. To participate in the conference call, dial
(800) 435-1398 and provide pass code 42785094. International callers should
dial (617) 614-4078 and provide the same pass code. Investors may also listen
to the call via the "investor information" section of ARLP’s website at
http://www.arlp.com.

An audio replay of the conference call will be available for approximately one
week. To access the audio replay, dial (888) 286-8010 and provide pass code
10279395. International callers should dial (617) 801-6888 and provide the
same pass code.

This announcement is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b), with 100% of the partnership’s distributions
to foreign investors attributable to income that is effectively connected with
a United States trade or business. Accordingly, ARLP’s distributions to
foreign investors are subject to federal income tax withholding at the highest
applicable tax rate.

About Alliance Resource Partners, L.P.

ARLP is a diversified producer and marketer of coal to major United States
utilities and industrial users. ARLP, the nation's first publicly traded
master limited partnership involved in the production and marketing of coal,
is currently the third largest coal producer in the eastern United States with
mining operations in the Illinois Basin, Northern Appalachian and Central
Appalachian coal producing regions. ARLP operates eleven mining complexes in
Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP is also
constructing a new mine in southern Indiana and is purchasing and funding
development of reserves, constructing surface facilities and making equity
investments in a new mining complex in southern Illinois. In addition, ARLP
operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana.

News, unit prices and additional information about ARLP, including filings
with the Securities and Exchange Commission, are available at
http://www.arlp.com. For more information, contact the investor relations
department of ARLP at (918) 295-7674 or via e-mail at
investorrelations@arlp.com.

The statements and projections used throughout this release are based on
current expectations. These statements and projections are forward-looking,
and actual results may differ materially. These projections do not include the
potential impact of any mergers, acquisitions or other business combinations
that may occur after the date of this release. At the end of this release, we
have included more information regarding business risks that could affect our
results.

FORWARD-LOOKING STATEMENTS: With the exception of historical matters, any
matters discussed in this press release are forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from projected results. These risks, uncertainties and
contingencies include, but are not limited to, the following: changes in
competition in coal markets and our ability to respond to such changes;
changes in coal prices, which could affect our operating results and cash
flows; risks associated with the expansion of our operations and properties;
the impact of health care legislation; deregulation of the electric utility
industry or the effects of any adverse change in the coal industry, electric
utility industry, or general economic conditions; dependence on significant
customer contracts, including renewing customer contracts upon expiration of
existing contracts; changing global economic conditions or in industries in
which our customers operate; liquidity constraints, including those resulting
from any future unavailability of financing; customer bankruptcies,
cancellations or breaches to existing contracts, or other failures to perform;
customer delays, failure to take coal under contracts or defaults in making
payments; adjustments made in price, volume or terms to existing coal supply
agreements; fluctuations in coal demand, prices and availability due to labor
and transportation costs and disruptions, equipment availability, governmental
regulations, including those related to carbon dioxide emissions, and other
factors; legislation, regulatory and court decisions and interpretations
thereof, including issues related to air and water quality and miner health
and safety; our productivity levels and margins earned on our coal sales;
unexpected changes in raw material costs; unexpected changes in the
availability of skilled labor; our ability to maintain satisfactory relations
with our employees; any unanticipated increases in labor costs, adverse
changes in work rules, or unexpected cash payments or projections associated
with post-mine reclamation and workers′ compensation claims; any unanticipated
increases in transportation costs and risk of transportation delays or
interruptions; greater than expected environmental regulation, costs and
liabilities; a variety of operational, geologic, permitting, labor and
weather-related factors; risks associated with major mine-related accidents,
such as mine fires, or interruptions; results of litigation, including claims
not yet asserted; difficulty maintaining our surety bonds for mine reclamation
as well as workers′ compensation and black lung benefits; difficulty in making
accurate assumptions and projections regarding pension, black lung benefits
and other post-retirement benefit liabilities; coal market's share of
electricity generation, including as a result of environmental concerns
related to coal mining and combustion and the cost and perceived benefits of
alternative sources of energy, such as natural gas, nuclear energy and
renewable fuels; uncertainties in estimating and replacing our coal reserves;
a loss or reduction of benefits from certain tax credits; difficulty obtaining
commercial property insurance, and risks associated with our participation
(excluding any applicable deductible) in the commercial insurance property
program; and difficulty in making accurate assumptions and projections
regarding future revenues and costs associated with equity investments in
companies we do not control.

Additional information concerning these and other factors can be found in
ARLP’s public periodic filings with the Securities and Exchange Commission
("SEC"), including ARLP’s Annual Report on Form 10-K for the year ended
December 31, 2011, filed on February 28, 2012 with the SEC. Except as required
by applicable securities laws, ARLP does not intend to update its
forward-looking statements.

                                                
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
                                                  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA

(In thousands, except unit and per unit data)

(Unaudited)
                                                  
                 Three Months Ended              Year Ended

                 December 31,                    December 31,
                 2012             2011           2012           2011
                                          
Tons Sold          9,787          8,171          35,170           31,925
Tons Produced      9,103          7,355          34,800           30,753
                                                                 
SALES AND
OPERATING
REVENUES:
Coal sales       $ 538,330        $ 462,238      $              $ 1,786,089
                                                 1,979,437
Transportation     4,383          6,487          22,034           31,939
revenues
Other sales
and operating      6,697          5,884          32,830           25,532      
revenues
Total revenues     549,410        474,609        2,034,301        1,843,560   
                                                                 
EXPENSES:
Operating
expenses
(excluding         356,485        296,744        1,303,291        1,131,750
depreciation,
depletion and
amortization)
Transportation     4,383          6,487          22,034           31,939
expenses
Outside coal       3,848          24,785         38,607           54,280
purchases
General and        14,798         13,636         58,737           52,334
administrative
Depreciation,
depletion and      63,199         43,098         218,122          160,335
amortization
Asset
impairment         -              -              19,031           -           
charge
Total
operating          442,713        384,750        1,659,822        1,430,638   
expenses
                                                                 
INCOME FROM        106,697        89,859         374,479          412,922
OPERATIONS
                                                                 
Interest
(expense)          (7,067     )   5,394          (28,455    )     (21,579    )
income, net
Equity in loss
of affiliates,     (3,610     )   (3,404     )   (14,650    )     (3,404     )
net
Other income       262            (357       )   3,115            983         
(loss)
INCOME BEFORE      96,282         91,492         334,489          388,922
INCOME TAXES
                                                                 
INCOME TAX         (356       )   (210       )   (1,082     )     (431       )
BENEFIT
                                                                 
NET INCOME       $ 96,638         $ 91,702       $ 335,571      $ 389,353     
                                                                 
GENERAL
PARTNERS’        $ 26,822         $ 19,562       $ 106,837      $ 86,251      
INTEREST IN
NET INCOME
                                                                 
LIMITED
PARTNERS’        $ 69,816         $ 72,140       $ 228,734      $ 303,102     
INTEREST IN
NET INCOME
                                                                 
BASIC AND
DILUTED NET
INCOME PER       $ 1.87           $ 1.93         $ 6.12         $ 8.13        
LIMITED
PARTNER UNIT
                                                                 
DISTRIBUTIONS
PAID PER         $ 1.0850         $ 0.9550       $ 4.1625       $ 3.6275      
LIMITED
PARTNER UNIT
                                                                 
WEIGHTED
AVERAGE NUMBER
OF UNITS           36,874,949     36,775,741     36,863,022       36,769,126  
OUTSTANDING –
BASIC AND
DILUTED
                                                                 

                                                
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
                                                  
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)
                                                  
ASSETS                                           December 31,
                                                 2012            2011
CURRENT ASSETS:
Cash and cash equivalents                        $ 28,283        $ 273,528
Trade receivables                                  172,724         128,643
Other receivables                                  1,019           3,525
Due from affiliates                                658             5,116
Inventories                                        46,660          33,837
Advance royalties                                  11,492          7,560
Prepaid expenses and other assets                  20,476          11,945     
Total current assets                               281,312         464,154
                                                                  
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost             2,361,863       1,974,520
Less accumulated depreciation, depletion and       (832,293  )     (793,200  )
amortization
Total property, plant and equipment, net           1,529,570       1,181,320
                                                                  
OTHER ASSETS:
Advance royalties                                  23,267          27,916
Due from affiliate                                 3,084           -
Equity investments in affiliates                   88,513          40,118
Other long-term assets                             30,226          18,010     
Total other assets                                 145,090         86,044     
TOTAL ASSETS                                     $ 1,955,972     $ 1,731,518  
                                                                  
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable                                 $ 100,174       $ 96,869
Due to affiliates                                  327             494
Accrued taxes other than income taxes              19,998          15,873
Accrued payroll and related expenses               38,501          35,876
Accrued interest                                   1,435           2,195
Workers’ compensation and pneumoconiosis           9,320           9,511
benefits
Current capital lease obligations                  1,000           676
Other current liabilities                          19,572          15,326
Current maturities, long-term debt                 18,000          18,000     
Total current liabilities                          208,327         194,820
                                                                  
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities       773,000         686,000
Pneumoconiosis benefits                            59,931          54,775
Accrued pension benefit                            31,078          27,538
Workers’ compensation                              68,786          64,520
Asset retirement obligations                       81,644          70,836
Long-term capital lease obligations                18,613          2,497
Other liabilities                                  9,147           6,774      
Total long-term liabilities                        1,042,199       912,940    
Total liabilities                                  1,250,526       1,107,760  
                                                                  
COMMITMENTS AND CONTINGENCIES
                                                                  
PARTNERS' CAPITAL:
Alliance Resource Partners, L.P. (“ARLP”)
Partners’ Capital:
Limited Partners - Common Unitholders
36,874,949 and 36,775,741 units outstanding,       1,020,823       943,325
respectively
General Partners' deficit                          (273,113  )     (279,107  )
Accumulated other comprehensive loss               (42,264   )     (40,460   )
Total Partners' Capital                            705,446         623,758    
TOTAL LIABILITIES AND PARTNERS' CAPITAL          $ 1,955,972     $ 1,731,518  
                                                                  

                                                  
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
                                                    
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)
                                                    
                                                   Year Ended

                                                   December 31,
                                                   2012           2011
                                                                   
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES        $ 555,856      $ 573,983   
                                                                   
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures                                 (424,631 )     (321,920 )
Changes in accounts payable and accrued              (4,007   )     11,640
liabilities
Proceeds from sale of property, plant and            114            1,526
equipment
Purchase of equity investments in affiliate          (59,800  )     (42,700  )
Payment for acquisition of business                  (100,000 )     -
Payments to affiliate for acquisition and            (34,601  )     (50,800  )
development of coal reserves
Advances/loans to affiliate                          (5,229   )     -
Payments from affiliate                              4,229          -
Other                                                546            1,146     
Net cash used in investing activities                (623,379 )     (401,108 )
                                                                   
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan                           250,000        -
Borrowings under revolving credit facility           278,800        -
Repayments under revolving credit facility           (123,800 )     -
Payment on term loan                                 (300,000 )     -
Payment on long-term debt                            (18,000  )     (18,000  )
Payments on capital lease obligations                (943     )     (812     )
Payment of debt issuance costs                       (4,272   )     -
Net settlement of employee withholding taxes on      (3,734   )     (2,324   )
vesting of Long-Term Incentive Plan
Cash contributions by General Partners               2,150          87
Distributions paid to Partners                       (257,923 )     (217,860 )
Net cash used in financing activities                (177,722 )     (238,909 )
                                                                   
NET CHANGE IN CASH AND CASH EQUIVALENTS              (245,245 )     (66,034  )
                                                                   
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     273,528        339,562
                                                                   
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $ 28,283       $ 273,528   
                                                                              

Reconciliation of GAAP "Net Income" to non-GAAP "EBITDA" and “Adjusted EBITDA”
and non-GAAP "Distributable Cash Flow" (in thousands).

EBITDA is defined as net income before net interest expense, income taxes and
depreciation, depletion and amortization and Adjusted EBITDA is EBITDA
modified to reflect significant non-recurring items that may not reflect the
trend of future results. EBITDA is used as a supplemental financial measure by
our management and by external users of our financial statements such as
investors, commercial banks, research analysts and others, to assess:

  * the financial performance of our assets without regard to financing
    methods, capital structure or historical cost basis;
  * the ability of our assets to generate cash sufficient to pay interest
    costs and support our indebtedness;
  * our operating performance and return on investment as compared to those of
    other companies in the coal energy sector, without regard to financing or
    capital structures; and
  * the viability of acquisitions and capital expenditure projects and the
    overall rates of return on alternative investment opportunities.

We believe Adjusted EBITDA is a useful measure for investors because it
further demonstrates the performance of our assets without regard to
non-recurring charges.

Distributable cash flow (“DCF”) is defined as Adjusted EBITDA excluding
interest expense (before capitalized interest), interest income, income taxes
and estimated maintenance capital expenditures. DCF is used as a supplemental
financial measure by our management and by external users of our financial
statements, such as investors, commercial banks, research analysts and others,
to assess:

  * the cash flows generated by our assets (prior to the establishment of any
    retained cash reserves by the general partner) to fund the cash
    distributions we expect to pay to unitholders;
  * our success in providing a cash return on investment and whether or not
    the Partnership is generating cash flow at a level that can sustain or
    support an increase in its quarterly distribution rates;
  * the yield of our units, which is a quantitative standard used through the
    investment community with respect to publicly-traded partnerships as the
    value of a unit is generally determined by a unit’s yield (which in turn
    is based on the amount of cash distributions the entity pays to a
    unitholder).

EBITDA, Adjusted EBITDA and DCF should not be considered as alternatives to
net income, income from operations, cash flows from operating activities or
any other measure of financial performance presented in accordance with
generally accepted accounting principles. EBITDA, Adjusted EBITDA and DCF are
not intended to represent cash flow and do not represent the measure of cash
available for distribution. Our method of computing EBITDA, Adjusted EBITDA
and DCF may not be the same method used to compute similar measures reported
by other companies, and EBITDA and DCF may be computed differently by us in
different contexts (i.e. public reporting versus computation under financing
agreements). We have not previously modified EBITDA for any non-recurring
charges to calculate Adjusted EBITDA and, as a result, EBITDA and Adjusted
EBITDA are equivalent in all historical periods.

                                                                                       
                                                                          Three
                Three Months Ended          Year Ended                    Months        Year Ended
                December 31,                December 31,                  Ended         December 31,
                                                                          September
                                                                          30,
                2012          2011          2012           2011           2012          2013E
                                                                                        Midpoint
                                                                                         
Net income      $ 96,638      $ 91,702      $ 335,571      $ 389,353      $ 60,510      $ 325,000
Depreciation,
depletion and     63,199        43,098        218,122        160,335        59,781        275,000
amortization
Interest
expense           9,070         8,921         36,891         36,376         9,053         35,400
(income), net
Capitalized       (2,003  )     (14,315 )     (8,436   )     (14,797  )     (1,701  )     (11,000  )
interest
Income tax
(benefit)         (356    )     (210    )     (1,082   )     (431     )     (102    )     600       
expense
EBITDA            166,548       129,196       581,066        570,836        127,541       625,000
Asset
impairment        -             -             19,031         -              19,031        -         
charge
Adjusted          166,548       129,196       600,097        570,836        146,572       625,000
EBITDA
Interest
(expense)         (9,070  )     (8,921  )     (36,891  )     (36,376  )     (9,053  )     (35,400  )
income, net
Income tax
benefit           356           210           1,082          431            102           (600     )
(expense)
Estimated
maintenance
capital           (50,067 )     (34,569 )     (191,400 )     (144,539 )     (49,500 )     (220,020 )
expenditures
^(1)
Distributable   $ 107,767     $ 85,916      $ 372,888      $ 390,352      $ 88,121      $ 368,980   
Cash Flow
                                                                                         
^(1) Our maintenance capital expenditures, as defined under the terms of our partnership agreement,
are those capital expenditures required to maintain, over the long-term, the operating capacity of
our capital assets. We estimate maintenance capital expenditures on an annual basis based upon a
five-year planning horizon. For the 2012 planning horizon, average annual estimated maintenance
capital expenditures are assumed to be $5.50 per produced ton compared to the estimated $4.70 per
produced ton in 2011. For the 2013 planning horizon, average estimated maintenance capital
expenditures are assumed to be $5.70 per produced ton. Our actual maintenance capital expenditures
vary depending on various factors, including maintenance schedules and timing of capital projects,
among others. We annually disclose our actual maintenance capital expenditures in our Form 10-K
filed with the Securities and Exchange Commission.
                                                                                         

Reconciliation of GAAP "Operating Expenses" to non-GAAP "Segment Adjusted
EBITDA Expense per ton" and Reconciliation of non-GAAP "EBITDA" to "Segment
Adjusted EBITDA" (in thousands, except per ton data).

Segment Adjusted EBITDA Expense per ton includes operating expenses, outside
coal purchases and other income divided by tons sold. Transportation expenses
are excluded as these expenses are passed through to our customers and,
consequently, we do not realize any margin on transportation revenues. Segment
Adjusted EBITDA Expense is used as a supplemental financial measure by our
management to assess the operating performance of our segments. Segment
Adjusted EBITDA Expense is a key component of EBITDA in addition to coal sales
and other sales and operating revenues. The exclusion of corporate general and
administrative expenses from Segment Adjusted EBITDA Expense allows management
to focus solely on the evaluation of segment operating performance as it
primarily relates to our operating expenses. Outside coal purchases are
included in Segment Adjusted EBITDA Expense because tons sold and coal sales
include sales from outside coal purchases.

                                                                     
                                                                      Three
            Three Months Ended        Twelve Months Ended             Months
            December 31,              December 31,                    Ended
                                                                      September
                                                                      30,
            2012          2011        2012            2011            2012
                                                                       
Operating   $ 356,485     $ 296,744   $ 1,303,291     $ 1,131,750     $ 338,644
expense
Outside
coal          3,848         24,785      38,607          54,280          4,424
purchases
Other
(income)      (262    )     357         (3,115    )     (983      )     (254    )
loss
Segment
Adjusted    $ 360,071     $ 321,886   $ 1,338,783     $ 1,185,047     $ 342,814
EBITDA
Expense
Divided
by tons       9,787         8,171       35,170          31,925          8,910    
sold
Segment
Adjusted
EBITDA      $ 36.79       $ 39.39     $ 38.07         $ 37.12         $ 38.48    
Expense
per ton
                                                                       

Segment Adjusted EBITDA is defined as net income before net interest expense,
income taxes, depreciation, depletion and amortization, general and
administrative expenses and asset impairment charge.

                                                                
                                         Three Months Ended      Three Months
                                         December 31,            Ended
                                                                 September 30,
                                         2012        2011        2012
                                                                  
Adjusted EBITDA (See reconciliation to   $ 166,548   $ 129,196   $   146,572
GAAP above)
General and administrative                 14,798      13,636        13,598
Segment Adjusted EBITDA                  $ 181,346   $ 142,832   $   160,170
                                                                  

Contact:

Alliance Resource Partners, L.P.
Brian L. Cantrell, 918-295-7673
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