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Alliance Holdings GP, L.P. Increases Quarterly Distribution by 3.0% to $0.785 Per Unit and Reports Record Quarterly Financial

  Alliance Holdings GP, L.P. Increases Quarterly Distribution by 3.0% to
  $0.785 Per Unit and Reports Record Quarterly Financial Results

Business Wire

TULSA, Okla. -- July 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 June 30, 2013 (the "2013 Quarter") of $0.785 per unit, or an
annualized rate of $3.14 per unit. The declared distribution will be paid on
August 19, 2013 to AHGP’s unitholders of record as of the close of trading on
August 12, 2013.

The announced quarterly cash distribution represents a 12.5% increase over the
$0.6975 per unit distribution (an annualized rate of $2.79 per unit) for the
quarter ended June 30, 2012 (the "2012 Quarter") and an increase of 3.0% over
the first quarter 2013 distribution of $0.7625 per unit (an annualized rate of
$3.05 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 $1.1525
per unit, or $4.61 per unit on an annualized basis, payable on August 14, 2013
to all unitholders of record as of the close of trading on August 7, 2013.
(See ARLP Press Release dated July 26, 2013.)

AHGP also reported record net income for the 2013 Quarter of $61.0 million, or
$1.02 per basic and diluted limited partner unit, an increase of 12.2%
compared to net income for the 2012 Quarter of $54.4 million, or $0.91 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 $47.9 million, or $191.6 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 $2.7 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 (800) 706-7745 and provide pass code 27235935.
International callers should dial (617) 614-3472 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
73983669. 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                Six Months Ended
                    June 30,                          June 30,
                    2013             2012             2013             2012
                                                                       
SALES AND
OPERATING
REVENUES:
Coal sales          $ 541,574        $ 512,505        $ 1,076,083      $ 942,104
Transportation        4,971            5,441            11,905           12,026
revenues
Other sales and
operating            6,933          11,826         13,460         19,134     
revenues
Total revenues       553,478        529,772        1,101,448      973,264    
                                                                       
EXPENSES:
Operating
expenses
(excluding            347,437          334,647          696,012          608,162
depreciation,
depletion and
amortization)
Transportation        4,971            5,441            11,905           12,026
expenses
Outside coal          790              16,154           1,392            30,335
purchases
General and           17,006           17,535           32,719           32,212
administrative
Depreciation,
depletion and        68,207         52,109         132,589        95,142     
amortization
Total operating       438,411          425,886          874,617          777,877
expenses
                                                                       
INCOME FROM           115,067          103,886          226,831          195,387
OPERATIONS
Interest expense,     (6,218     )     (8,268     )     (12,836    )     (14,180    )
net
Interest income       178              52               312              145
Equity in loss of     (5,699     )     (4,430     )     (9,566     )     (8,208     )
affiliates, net
Other income         353            2,384          627            2,599      
INCOME BEFORE         103,681          93,624           205,368          175,743
INCOME TAXES
INCOME TAX           108            (257       )    (589       )    (624       )
EXPENSE (BENEFIT)
NET INCOME            103,573          93,881           205,957          176,367
LESS: NET INCOME
ATTRIBUTABLE TO      (42,596    )    (39,517    )    (84,978    )    (72,689    )
NONCONTROLLING
INTERESTS
NET INCOME
ATTRIBUTABLE TO
ALLIANCE HOLDINGS   $ 60,977        $ 54,364        $ 120,979       $ 103,678    
GP, L.P. ("NET
INCOME OF AHGP")
                                                                       
BASIC AND DILUTED
NET INCOME OF       $ 1.02          $ 0.91          $ 2.02          $ 1.73       
AHGP PER LIMITED
PARTNER UNIT
                                                                       
DISTRIBUTIONS
PAID PER LIMITED    $ 0.7625        $ 0.6675        $ 1.5025        $ 1.305      
PARTNER UNIT
                                                                       
WEIGHTED AVERAGE
NUMBER OF UNITS
                     59,863,000     59,863,000     59,863,000     59,863,000 
OUTSTANDING-BASIC
AND DILUTED

                                                              
                                                                 
                                                                 
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
(Unaudited)
                                                                 
ASSETS                                           June 30,        December 31,
                                                 2013            2012
                                                                 
CURRENT ASSETS:
Cash and cash equivalents                        $ 12,940        $ 31,111
Trade receivables                                  164,190         172,724
Other receivables                                  1,077           1,019
Due from affiliates                                185             562
Inventories                                        63,886          46,660
Advance royalties                                  11,872          11,492
Prepaid expenses and other assets                 10,032        20,554    
Total current assets                               264,182         284,122
                                                                 
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost             2,511,748       2,361,863
Less accumulated depreciation, depletion and      (938,097  )    (832,293  )
amortization
Total property, plant and equipment, net           1,573,651       1,529,570
                                                                 
OTHER ASSETS:
Advance royalties                                  21,944          23,267
Equity investments in affiliates                   128,884         88,513
Due from affiliate                                 5,927           3,084
Other long-term assets                            29,416        30,284    
Total other assets                                186,171       145,148   
TOTAL ASSETS                                     $ 2,024,004    $ 1,958,840 
                                                                 
LIABILITIES AND PARTNERS' CAPITAL
                                                                 
CURRENT LIABILITIES:
Accounts payable                                 $ 95,956        $ 100,678
Due to affiliates                                  386             327
Accrued taxes other than income taxes              23,865          20,033
Accrued payroll and related expenses               44,000          38,501
Accrued interest                                   1,455           1,435
Workers’ compensation and pneumoconiosis           9,478           9,320
benefits
Current capital lease obligations                  1,141           1,000
Other current liabilities                          25,441          19,572
Current maturities, long-term debt                24,250        18,000    
Total current liabilities                          225,972         208,866
                                                                 
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities       753,750         773,000
Pneumoconiosis benefits                            62,625          59,931
Accrued pension benefit                            31,329          31,078
Workers’ compensation                              72,213          68,786
Asset retirement obligations                       75,029          81,644
Long-term capital lease obligations                17,888          18,613
Other liabilities                                 7,345         9,147     
Total long-term liabilities                       1,020,179     1,042,199 
Total liabilities                                 1,246,151     1,251,065 
                                                                 
COMMITMENTS AND CONTINGENCIES
                                                                 
PARTNERS' CAPITAL:
Alliance Holdings GP, L.P. ("AHGP") Partners'
Capital:
Limited Partners – Common Unitholders              480,159         448,976
59,863,000 units outstanding
Accumulated other comprehensive loss              (17,627   )    (18,296   )
Total AHGP Partners' Capital                       462,532         430,680
Noncontrolling interests                          315,321       277,095   
Total Partners' Capital                           777,853       707,775   
TOTAL LIABILITIES AND PARTNERS' CAPITAL          $ 2,024,004    $ 1,958,840 

                                                               
                                                                  
                                                                  
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                  
                                                   Six Months Ended
                                                   June 30,
                                                   2013           2012
                                                                  
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES        $ 373,087     $ 248,017  
                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures                                 (163,030 )     (238,330 )
Changes in accounts payable and accrued              (4,055   )     10,759
liabilities
Proceeds from sale of property, plant and            9              19
equipment
Purchases of equity investments in affiliate         (47,500  )     (30,600  )
Payment for acquisition of business                  -              (100,000 )
Payments to affiliate for acquisition and            (18,860  )     (34,601  )
development of coal reserves
Advances/loans to affiliate                          (2,531   )     (2,229   )
Payments from affiliate                              -              4,229
Other                                               -            429      
Net cash used in investing activities               (235,967 )    (390,324 )
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan                           -              250,000
Borrowings under revolving credit facility           77,000         55,000
Payments under revolving credit facility             (90,000  )     -
Payment on term loan                                 -              (300,000 )
Payments on capital lease obligations                (584     )     (405     )
Payment of debt issuance costs                       -              (4,272   )
Net settlement of employee withholding taxes on
vesting of                                           (3,015   )     (3,734   )

ARLP Long-Term Incentive Plan
Distributions paid by consolidated partnership       (48,748  )     (43,731  )
to noncontrolling interests
Distributions paid to Partners                      (89,944  )    (78,121  )
Net cash used in financing activities               (155,291 )    (125,263 )
                                                                  
NET CHANGE IN CASH AND CASH EQUIVALENTS              (18,171  )     (267,570 )
                                                                  
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     31,111         281,469
                                                                 
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $ 12,940      $ 13,899   
                                                                             

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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