Alliance Holdings GP, L.P. Increases Quarterly Distribution by 3.0% to $0.7625 Per Unit and Reports Strong Quarterly Financial

  Alliance Holdings GP, L.P. Increases Quarterly Distribution by 3.0% to
  $0.7625 Per Unit and Reports Strong Quarterly Financial Results

Business Wire

TULSA, Okla. -- April 26, 2013

Alliance Holdings GP, L.P. (NASDAQ: AHGP) today announced that the Board of
Directors of its general partner declared a quarterly cash distribution for
the quarter ended March 31, 2013 (the "2013 Quarter") of $0.7625 per unit, or
an annualized rate of $3.05 per unit. The declared distribution will be paid
on May 20, 2013 to AHGP’s unitholders of record as of the close of trading on
May 13, 2013.

The announced quarterly cash distribution represents a 14.2% increase over the
$0.6675 per unit distribution (an annualized rate of $2.67 per unit) for the
quarter ended March 31, 2012 (the "2012 Quarter") and an increase of 3.0% over
the fourth quarter 2012 distribution of $0.74 per unit (an annualized rate of
$2.96 per unit).

The declared distribution is based on the distribution AHGP will receive from
its ownership interests in Alliance Resource Partners, L.P. (NASDAQ: ARLP).
ARLP today announced a quarterly distribution for the 2013 Quarter of $1.13
per unit, or $4.52 per unit on an annualized basis, payable on May 15, 2013 to
all unitholders of record as of the close of trading on May 8, 2013. (See ARLP
Press Release dated April 26, 2013.)

AHGP reported net income for the 2013 Quarter of $60.0 million, or $1.00 per
basic and diluted limited partner unit, an increase of 21.7% compared to net
income for the 2012 Quarter of $49.3 million, or $0.82 per basic and diluted
limited partner unit. (For a discussion of net income presentation, please see
the end of this release.)

AHGP currently has no other operating activities apart from those conducted by
the operating subsidiaries of ARLP and reports its financial results on a
consolidated basis with the financial results of ARLP. AHGP’s principal
sources of cash flow are its ownership of general partner interests, limited
partner interests and incentive distribution rights in ARLP. Based on ARLP’s
current declared distribution, AHGP expects to receive quarterly cash
distributions from ARLP of $46.7 million, or $186.8 million on an annualized
basis. AHGP’s primary cash requirements are for working capital, distributions
to its unitholders and general and administrative expenses, including for 2013
an estimated $3.0 million in general and administrative expenses.

AHGP and ARLP will discuss their 2013 Quarter financial results during a joint
conference call scheduled for today at 10:00 a.m. Eastern. To participate in
the conference call, dial (866) 318-8612 and provide pass code 14461240.
International callers should dial (617) 399-5131 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 or AHGP’s website at
http://www.ahgp.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
65143934. 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, AHGP’s distributions to
foreign investors are subject to federal income tax withholding at the highest
applicable tax rate.

About Alliance Holdings GP, L.P.

AHGP is a limited partnership formed to own and control Alliance Resource
Management GP, LLC, the managing general partner of Alliance Resource
Partners, L.P. (NASDAQ: ARLP), through which it holds a 1.98% general partner
interest and the incentive distribution rights in ARLP. In addition, AHGP owns
15,544,169 common units of ARLP.

News, unit prices and additional information about AHGP including filings with
the Securities and Exchange Commission, are available at http://www.ahgp.com.
For more information, contact the investor relations department of AHGP at
(918) 295-1415 or via e-mail at investorrelations@ahgp.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 the ARLP Partnership's ability to respond to
such changes; changes in coal prices, which could affect the ARLP
Partnership's operating results and cash flows; risks associated with the ARLP
Partnership's expansion of its operations and properties; legislation,
regulations, and court decisions and interpretations thereof, including those
relating to the environment, mining, miner health and safety and health care;
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 the ARLP Partnership’s 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; the ARLP Partnership's productivity
levels and margins earned on its coal sales; unexpected changes in raw
material costs; unexpected changes in availability of skilled labor; the ARLP
Partnership's ability to maintain satisfactory relations with its 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;
unexpected operational interruptions due to geologic, permitting, labor,
weather-related or other factors; risks associated with major mine-related
accidents, such as mine fires, or interruptions; results of litigation,
including claims not yet asserted; difficulty maintaining the ARLP
Partnership's 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 other sources of
electricity, such as natural gas, nuclear energy and renewable fuels;
uncertainties in estimating and replacing the ARLP Partnership’s coal
reserves; a loss or reduction of benefits from certain tax deductions and
credits; difficulty obtaining commercial property insurance, and risks
associated with the ARLP Partnership's 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
AHGP’s public periodic filings with the Securities and Exchange Commission
("SEC"), including AHGP's Annual Report on Form 10-K for the year ended
December 31, 2012, filed on March 1, 2013 with the SEC. Except as required by
applicable securities laws, AHGP does not intend to update its forward-looking
statements.

                                                             
                                                                
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES
                                                                
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA
(In thousands, except unit and per unit data)
(Unaudited)
                                                                
                                               Three Months Ended
                                               March 31,
                                               2013             2012
                                                                
SALES AND OPERATING REVENUES:
Coal sales                                     $ 534,509        $ 429,599
Transportation revenues                          6,934            6,585
Other sales and operating revenues              6,527          7,308      
Total revenues                                  547,970        443,492    
                                                                
EXPENSES:
Operating expenses (excluding depreciation,      348,575          273,515
depletion and amortization)
Transportation expenses                          6,934            6,585
Outside coal purchases                           602              14,181
General and administrative                       15,713           14,677
Depreciation, depletion and amortization        64,382         43,033     
Total operating expenses                         436,206          351,991
                                                                
INCOME FROM OPERATIONS                           111,764          91,501
Interest expense, net                            (6,618     )     (5,912     )
Interest income                                  134              93
Equity in loss of affiliates, net                (3,867     )     (3,778     )
Other income                                    274            215        
INCOME BEFORE INCOME TAXES                       101,687          82,119
INCOME TAX BENEFIT                              (697       )    (367       )
NET INCOME                                       102,384          82,486
LESS: NET INCOME ATTRIBUTABLE TO                (42,382    )    (33,172    )
NONCONTROLLING INTERESTS
NET INCOME ATTRIBUTABLE TO ALLIANCE HOLDINGS
GP, L.P.
("NET INCOME OF AHGP")                         $ 60,002        $ 49,314     
                                                                
BASIC AND DILUTED NET INCOME OF AHGP PER       $ 1.00          $ 0.82       
LIMITED PARTNER UNIT
                                                                
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT    $ 0.74          $ 0.6375     
                                                                
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING-BASIC AND DILUTED                   59,863,000     59,863,000 

                                                              
                                                                 
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES
                                                                 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
(Unaudited)
                                                                 
ASSETS                                           March 31,       December 31,
                                                 2013            2012
                                                                 
CURRENT ASSETS:
Cash and cash equivalents                        $ 32,231        $ 31,111
Trade receivables                                  168,270         172,724
Other receivables                                  1,097           1,019
Due from affiliates                                -               562
Inventories                                        50,628          46,660
Advance royalties                                  11,492          11,492
Prepaid expenses and other assets                 14,894        20,554    
Total current assets                               278,612         284,122
                                                                 
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost             2,434,704       2,361,863
Less accumulated depreciation, depletion and      (886,497  )    (832,293  )
amortization
Total property, plant and equipment, net           1,548,207       1,529,570
                                                                 
OTHER ASSETS:
Advance royalties                                  24,955          23,267
Equity investments in affiliates                   115,525         88,513
Due from affiliate                                 4,862           3,084
Other long-term assets                            30,851        30,284    
Total other assets                                176,193       145,148   
TOTAL ASSETS                                     $ 2,003,012    $ 1,958,840 
                                                                 
LIABILITIES AND PARTNERS' CAPITAL
                                                                 
CURRENT LIABILITIES:
Accounts payable                                 $ 97,849        $ 100,678
Due to affiliates                                  406             327
Accrued taxes other than income taxes              25,087          20,033
Accrued payroll and related expenses               39,038          38,501
Accrued interest                                   6,398           1,435
Workers’ compensation and pneumoconiosis           9,468           9,320
benefits
Current capital lease obligations                  1,069           1,000
Other current liabilities                          23,603          19,572
Current maturities, long-term debt                18,000        18,000    
Total current liabilities                          220,918         208,866
                                                                 
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities       768,000         773,000
Pneumoconiosis benefits                            61,306          59,931
Accrued pension benefit                            31,457          31,078
Workers’ compensation                              70,347          68,786
Asset retirement obligations                       82,017          81,644
Long-term capital lease obligations                18,260          18,613
Other liabilities                                 9,211         9,147     
Total long-term liabilities                       1,040,598     1,042,199 
Total liabilities                                 1,261,516     1,251,065 
                                                                 
COMMITMENTS AND CONTINGENCIES
                                                                 
PARTNERS' CAPITAL:
Alliance Holdings GP, L.P. ("AHGP") Partners'
Capital:
Limited Partners – Common Unitholders              464,752         448,976
59,863,000 units outstanding
Accumulated other comprehensive loss              (17,941   )    (18,296   )
Total AHGP Partners' Capital                       446,811         430,680
Noncontrolling interests                          294,685       277,095   
Total Partners' Capital                           741,496       707,775   
TOTAL LIABILITIES AND PARTNERS' CAPITAL          $ 2,003,012    $ 1,958,840 

                                                               
                                                                  
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES
                                                                  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                  
                                                   Three Months Ended
                                                   March 31,
                                                   2013           2012
                                                                  
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES        $ 199,184     $ 109,071  
                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures                                 (70,306  )     (105,339 )
Changes in accounts payable and accrued              (7,608   )     (6,664   )
liabilities
Proceeds from sale of property, plant and            9              15
equipment
Purchases of equity investments in affiliate         (29,700  )     (4,400   )
Payments to affiliate for acquisition and            (12,064  )     (18,000  )
development of coal reserves
Advances/loans to affiliate                          (1,643   )     (776     )
Other                                               -            268      
Net cash used in investing activities               (121,312 )    (134,896 )
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facility           45,000         -
Payments under revolving credit facility             (50,000  )     -
Payments on capital lease obligations                (284     )     (171     )
Net settlement of employee withholding taxes on
vesting of
ARLP Long-Term Incentive Plan                        (3,015   )     (3,734   )
Distributions paid by consolidated partnership
to noncontrolling
interests                                            (24,154  )     (21,511  )
Distributions paid to Partners                      (44,299  )    (38,163  )
Net cash used in financing activities               (76,752  )    (63,579  )
                                                                  
NET CHANGE IN CASH AND CASH EQUIVALENTS              1,120          (89,404  )
                                                                  
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     31,111         281,469
                                                                 
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $ 32,231      $ 192,065  

Presentation of Net Income

Consolidated net income includes earnings attributable to both AHGP and
noncontrolling interests. Unless otherwise noted, any reference to net income
in this release represents net income attributable to AHGP.

Contact:

Alliance Holdings GP, L.P.
Brian L. Cantrell, 918-295-7673
 
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