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Alliance Holdings GP, L.P. Increases Quarterly Distribution by 2.9% to $0.8075 Per Unit and Reports Quarterly Financial Results

  Alliance Holdings GP, L.P. Increases Quarterly Distribution by 2.9% to
  $0.8075 Per Unit and Reports Quarterly Financial Results

Business Wire

TULSA, Okla. -- October 28, 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 September 30, 2013 (the "2013 Quarter") of $0.8075 per unit,
or an annualized rate of $3.23 per unit. The declared distribution will be
paid on November 19, 2013 to AHGP’s unitholders of record as of the close of
trading on November 12, 2013.

The announced quarterly cash distribution represents a 12.2% increase over the
$0.72 per unit distribution (an annualized rate of $2.88 per unit) for the
quarter ended September 30, 2012 (the "2012 Quarter") and an increase of 2.9%
over the second quarter 2013 distribution of $0.785 per unit (an annualized
rate of $3.14 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 $1.175
per unit, or $4.70 per unit on an annualized basis, payable on November 14,
2013 to all unitholders of record as of the close of trading on November 7,
2013. (See ARLP Press Release dated October 28, 2013.)

AHGP also reported net income for the 2013 Quarter of $54.2 million, or $0.91
per basic and diluted limited partner unit, an increase of 37.3% compared to
net income for the 2012 Quarter of $39.5 million, or $0.66 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 $49.0 million, or $196.0 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 $2.9 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) 318-8615 and provide pass code 91181891.
International callers should dial (617) 399-5134 and provide the same pass
code. Investors may also listen to the call via the "investor relations"
section of ARLP’s website at http://www.arlp.com or the "investor information"
section of 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
17544865. 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                      Nine Months Ended

                      September 30,                           September 30,
                      2013             2012                 2013             2012
                                                                                 
SALES AND
OPERATING
REVENUES:
Coal sales            $ 518,447          $ 499,003            $ 1,594,530        $ 1,441,107
Transportation          11,554             5,625                23,459             17,651
revenues
Other sales and
operating              7,135            6,720              20,595           25,854     
revenues
Total revenues         537,136          511,348            1,638,584        1,484,612  
                                                                                 
EXPENSES:
Operating
expenses
(excluding              346,045            338,644              1,042,057          946,806
depreciation,
depletion and
amortization)
Transportation          11,554             5,625                23,459             17,651
expenses
Outside coal            636                4,424                2,028              34,759
purchases
General and             15,237             15,282               47,956             47,494
administrative
Depreciation,
depletion and           66,099             59,781               198,688            154,923
amortization
Asset impairment       -                19,031             -                19,031     
charge
Total operating         439,571            442,787              1,314,188          1,220,664
expenses
                                                                                 
INCOME FROM             97,565             68,561               324,396            263,948
OPERATIONS
Interest expense,       (6,168     )       (7,446     )         (19,004    )       (21,626    )
net
Interest income         253                94                   565                239
Equity in loss of       (5,990     )       (2,832     )         (15,556    )       (11,040    )
affiliates, net
Other income           372              254                999              2,853      
INCOME BEFORE           86,032             58,631               291,400            234,374
INCOME TAXES
INCOME TAX             (718       )      (102       )        (1,307     )      (726       )
BENEFIT
NET INCOME              86,750             58,733               292,707            235,100
LESS: NET INCOME
ATTRIBUTABLE TO        (32,539    )      (19,238    )        (117,517   )      (91,927    )
NONCONTROLLING
INTERESTS
NET INCOME
ATTRIBUTABLE TO
ALLIANCE HOLDINGS     $ 54,211          $ 39,495            $ 175,190         $ 143,173    
GP, L.P. ("NET
INCOME OF AHGP")
                                                                                 
BASIC AND DILUTED
NET INCOME OF         $ 0.91            $ 0.66              $ 2.93            $ 2.39       
AHGP PER LIMITED
PARTNER UNIT
                                                                                 
DISTRIBUTIONS
PAID PER LIMITED      $ 0.785           $ 0.6975            $ 2.2875          $ 2.0025     
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                                         September 30,     December 31,
                                               2013              2012
                                                                 
CURRENT ASSETS:
Cash and cash equivalents                      $ 23,121          $ 31,111
Trade receivables                                169,916           172,724
Other receivables                                1,121             1,019
Due from affiliates                              620               562
Inventories                                      69,331            46,660
Advance royalties                                11,280            11,492
Prepaid expenses and other assets               3,817           20,554    
Total current assets                             279,206           284,122
                                                                 
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost           2,576,521         2,361,863
Less accumulated depreciation, depletion        (990,133  )      (832,293  )
and amortization
Total property, plant and equipment, net         1,586,388         1,529,570
                                                                 
OTHER ASSETS:
Advance royalties                                20,881            23,267
Equity investments in affiliates                 124,345           88,513
Due from affiliate                               11,150            3,084
Other long-term assets                          29,003          30,284    
Total other assets                              185,379         145,148   
TOTAL ASSETS                                   $ 2,050,973      $ 1,958,840 
                                                                 
LIABILITIES AND PARTNERS' CAPITAL
                                                                 
CURRENT LIABILITIES:
Accounts payable                               $ 107,450         $ 100,678
Due to affiliates                                393               327
Accrued taxes other than income taxes            22,636            20,033
Accrued payroll and related expenses             51,603            38,501
Accrued interest                                 6,185             1,435
Workers’ compensation and pneumoconiosis         9,478             9,320
benefits
Current capital lease obligations                1,214             1,000
Other current liabilities                        21,763            19,572
Current maturities, long-term debt              80,500          18,000    
Total current liabilities                        301,222           208,866
                                                                 
LONG-TERM LIABILITIES:
Long-term debt, excluding current                687,500           773,000
maturities
Pneumoconiosis benefits                          63,921            59,931
Accrued pension benefit                          31,202            31,078
Workers’ compensation                            70,733            68,786
Asset retirement obligations                     76,517            81,644
Long-term capital lease obligations              17,513            18,613
Other liabilities                               6,831           9,147     
Total long-term liabilities                     954,217         1,042,199 
Total liabilities                               1,255,439       1,251,065 
                                                                 
COMMITMENTS AND CONTINGENCIES
                                                                 
PARTNERS' CAPITAL:
Alliance Holdings GP, L.P. ("AHGP")
Partners' Capital:
Limited Partners – Common Unitholders            487,453           448,976
59,863,000 units outstanding
Accumulated other comprehensive loss            (17,314   )      (18,296   )
Total AHGP Partners' Capital                     470,139           430,680
Noncontrolling interests                        325,395         277,095   
Total Partners' Capital                         795,534         707,775   
TOTAL LIABILITIES AND PARTNERS' CAPITAL        $ 2,050,973      $ 1,958,840 
                                                                 

                                              
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                 
                                                 Nine Months Ended
                                                 September 30,
                                                 2013           2012
                                                                  
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES      $ 548,884       $ 422,369  
                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures                               (242,653 )       (332,353 )
Changes in accounts payable and accrued            (354     )       (4,024   )
liabilities
Proceeds from sale of property, plant and          124              114
equipment
Purchases of equity investments in affiliate       (47,500  )       (43,100  )
Payment for acquisition of business                -                (100,000 )
Payments to affiliate for acquisition and          (21,318  )       (34,601  )
development of coal reserves
Advances/loans to affiliate                        (7,500   )       (2,229   )
Payments from affiliate                            -                4,229
Other                                             -              546      
Net cash used in investing activities             (319,201 )      (511,418 )
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan                         -                250,000
Borrowings under revolving credit facilities       211,000          150,000
Payments under revolving credit facilities         (216,000 )       (75,000  )
Payment on term loan                               -                (300,000 )
Payment on long-term debt                          (18,000  )       (18,000  )
Payments on capital lease obligations              (886     )       (673     )
Payment of debt issuance costs                     -                (4,272   )
Net settlement of employee withholding taxes       (3,015   )       (3,734   )
on vesting of ARLP Long-Term Incentive Plan
Distributions paid by consolidated                 (73,835  )       (66,755  )
partnership to noncontrolling interests
Distributions paid to Partners                    (136,937 )      (119,876 )
Net cash used in financing activities             (237,673 )      (188,310 )
                                                                  
NET CHANGE IN CASH AND CASH EQUIVALENTS            (7,990   )       (277,359 )
                                                                  
CASH AND CASH EQUIVALENTS AT BEGINNING OF          31,111           281,469
PERIOD
                                                                 
CASH AND CASH EQUIVALENTS AT END OF PERIOD       $ 23,121        $ 4,110    
                                                                             

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