Alliance Holdings GP, L.P. Reports Record Quarterly Financial Results and Increases Quarterly Distribution by 2.4% to $0.8475

  Alliance Holdings GP, L.P. Reports Record Quarterly Financial Results and
  Increases Quarterly Distribution by 2.4% to $0.8475 Per Unit

Business Wire

TULSA, Okla. -- April 28, 2014

Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported record quarterly
financial results for the quarter ended March 31, 2014 (the "2014 Quarter").
On the strength of record results by its operating subsidiary, Alliance
Resource Partners, L.P. (NASDAQ: ARLP), AHGP’s net income rose 12.4% to a
record $67.4 million, or net income per basic and diluted limited partner
interest of $1.13 per unit, an increase of 13.0% compared to quarter ended
March 31, 2013 (the "2013 Quarter"). (Operating results for AHGP reflect those
of the operating subsidiaries of ARLP and, as a result, AHGP reports its
financial results on a consolidated basis with the financial results of ARLP.
For a discussion of net income presentation, please see the end of this
release.)

AHGP also announced that the Board of Directors of its general partner (the
"Board") increased the cash distribution to unitholders for the 2014 Quarter
to $0.8475 per unit, or an annualized rate of $3.39 per unit, payable on May
20, 2014 to AHGP’s unitholders of record as of the close of trading on May 13,
2014. The declared quarterly cash distribution represents an 11.1% increase
over the cash distribution of $0.7625 per unit for the 2013 Quarter and an
increase of 2.4% over the fourth quarter 2013 distribution of $0.8275 per
unit.

"AHGP continues to benefit from the strong operating and financial performance
of ARLP," said Joseph W. Craft III, President and Chief Executive Officer.
"With ARLP poised to deliver another year of record results, our leverage to
growth at ARLP is expected to benefit AHGP as well. Reflecting this
expectation, the Board elected to increase quarterly unitholder distributions
for the twenty-fourth consecutive quarter."

AHGP’s principal sources of cash flow are its ownership of general partner
interests, limited partner interests and incentive distribution rights in
ARLP. The declared distribution is based on the distribution AHGP will receive
from its ownership interests in ARLP, which today announced a quarterly
distribution for the 2014 Quarter of $1.2225 per unit, or $4.89 per unit on an
annualized basis, payable on May 15, 2014 to all unitholders of record as of
the close of trading on May 8, 2014. (See ARLP Press Release dated April 28,
2014.)

Based on ARLP’s current declared distribution, AHGP expects to receive
quarterly cash distributions from ARLP of $51.6 million, or $206.4 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 2014 an estimated $4.6 million in general and administrative
expenses.

AHGP and ARLP will discuss their 2014 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) 515-2908 and provide pass code 49236626.
International callers should dial (617) 399-5122 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
47869959. 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. The Board of Directors of ARLP announced
today that it approved a two-for-one split of ARLP’s common units. The unit
split will take place in the form of a one unit distribution on each ARLP unit
outstanding, with units to be distributed on June 16, 2014 to unitholders of
record as of May 30, 2014. Following the unit split, AHGP will continue to own
a 1.98% general partner interest and the incentive distribution rights in
ARLP. In addition, AHGP will receive an additional 15,544,169 ARLP common
units, which will bring its total ownership to 31,088,338 ARLP common units.
The quarterly cash distribution per ARLP unit will be reduced by half and as a
result, ARLP’s total distribution to AHGP will remain unchanged after the ARLP
unit split is consummated.

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; changes in raw material costs;
changes in the availability of skilled labor; the ARLP Partnership's ability
to maintain satisfactory relations with its employees; increases in labor
costs, adverse changes in work rules, or cash payments or projections
associated with post-mine reclamation and workers' compensation claims;
increases in transportation costs and risk of transportation delays or
interruptions; 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; the coal industry'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, 2013, filed on February 28, 2014 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,
                                             2014             2013
                                                                
SALES AND OPERATING REVENUES:
Coal sales                                   $ 525,545          $ 534,509
Transportation revenues                        6,005              6,934
Other sales and operating revenues            10,384           6,527      
Total revenues                                541,934          547,970    
                                                                
EXPENSES:
Operating expenses (excluding
depreciation, depletion and                    322,242            348,575
amortization)
Transportation expenses                        6,005              6,934
Outside coal purchases                         2                  602
General and administrative                     17,899             15,713
Depreciation, depletion and amortization      66,841           64,382     
Total operating expenses                       412,989            436,206
                                                                
INCOME FROM OPERATIONS                         128,945            111,764
Interest expense, net                          (8,063     )       (6,618     )
Interest income                                389                134
Equity in loss of affiliates, net              (6,241     )       (3,867     )
Other income                                  306              274        
INCOME BEFORE INCOME TAXES                     115,336            101,687
INCOME TAX BENEFIT                            -                (697       )
NET INCOME                                     115,336            102,384
LESS: NET INCOME ATTRIBUTABLE TO              (47,889    )      (42,382    )
NONCONTROLLING INTERESTS
NET INCOME ATTRIBUTABLE TO ALLIANCE          $ 67,447          $ 60,002     
HOLDINGS GP, L.P. ("NET INCOME OF AHGP")
                                                                
BASIC AND DILUTED NET INCOME OF AHGP PER     $ 1.13            $ 1.00       
LIMITED PARTNER UNIT
DISTRIBUTIONS PAID PER LIMITED PARTNER       $ 0.8275          $ 0.74       
UNIT
                                                                
WEIGHTED AVERAGE NUMBER OF UNITS              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                                       March 31,          December 31,
                                             2014               2013
                                                                
CURRENT ASSETS:
Cash and cash equivalents                    $ 19,124           $ 98,375
Trade receivables                              199,554            153,662
Other receivables                              294                776
Due from affiliates                            2,300              1,889
Inventories                                    68,751             44,214
Advance royalties                              11,454             11,454
Prepaid expenses and other assets             9,974            16,264     
Total current assets                           311,451            326,634
                                                                
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost         2,681,406          2,645,872
Less accumulated depreciation, depletion      (1,062,256 )      (1,031,493 )
and amortization
Total property, plant and equipment, net       1,619,150          1,614,379
                                                                
OTHER ASSETS:
Advance royalties                              20,741             18,813
Equity investments in affiliates               154,029            130,410
Due from affiliate                             11,458             11,560
Other long-term assets                        23,738           24,883     
Total other assets                            209,966          185,666    
TOTAL ASSETS                                 $ 2,140,567       $ 2,126,679  
                                                                
LIABILITIES AND PARTNERS' CAPITAL
                                                                
CURRENT LIABILITIES:
Accounts payable                             $ 84,213           $ 79,772
Due to affiliates                              202                290
Accrued taxes other than income taxes          25,091             19,086
Accrued payroll and related expenses           43,116             47,105
Accrued interest                               6,302              996
Workers’ compensation and pneumoconiosis       9,237              9,065
benefits
Current capital lease obligations              1,307              1,288
Other current liabilities                      17,130             18,625
Current maturities, long-term debt            43,000           36,750     
Total current liabilities                      229,598            212,977
                                                                
LONG-TERM LIABILITIES:
Long-term debt, excluding current              790,000            831,250
maturities
Pneumoconiosis benefits                        49,698             48,455
Accrued pension benefit                        17,544             18,182
Workers’ compensation                          54,857             54,949
Asset retirement obligations                   81,324             80,807
Long-term capital lease obligations            16,758             17,135
Other liabilities                             6,407            7,331      
Total long-term liabilities                   1,016,588        1,058,109  
Total liabilities                             1,246,186        1,271,086  
                                                                
COMMITMENTS AND CONTINGENCIES
                                                                
PARTNERS' CAPITAL:
Alliance Holdings GP, L.P. ("AHGP")
Partners' Capital:
Limited Partners – Common Unitholders          517,841            500,070
59,863,000 units outstanding
Accumulated other comprehensive loss          (4,207     )      (4,198     )
Total AHGP Partners' Capital                   513,634            495,872
Noncontrolling interests                      380,747          359,721    
Total Partners' Capital                       894,381          855,593    
TOTAL LIABILITIES AND PARTNERS' CAPITAL      $ 2,140,567       $ 2,126,679  
                                                                

                                              
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)
                                                 
                                                 Three Months Ended
                                                 March 31,
                                                 2014           2013
                                                                  
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES      $ 139,530       $ 199,184  
                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures                               (69,463  )       (70,306  )
Changes in accounts payable and accrued            (3,745   )       (7,608   )
liabilities
Proceeds from sale of property, plant and          -                9
equipment
Purchases of equity investments in affiliate       (30,000  )       (29,700  )
Payments to affiliate for acquisition and          (1,401   )       (12,064  )
development of coal reserves
Advances/loans to affiliate                       -              (1,643   )
Net cash used in investing activities             (104,609 )      (121,312 )
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities       82,800           45,000
Payments under revolving credit facilities         (117,800 )       (50,000  )
Payments on capital lease obligations              (358     )       (284     )
Net settlement of employee withholding taxes       (2,991   )       (3,015   )
on vesting of ARLP Long-Term Incentive Plan
Distributions paid by consolidated                 (26,286  )       (24,154  )
partnership to noncontrolling interests
Distributions paid to Partners                    (49,537  )      (44,299  )
Net cash used in financing activities             (114,172 )      (76,752  )
                                                                  
NET CHANGE IN CASH AND CASH EQUIVALENTS            (79,251  )       1,120
                                                                  
CASH AND CASH EQUIVALENTS AT BEGINNING OF          98,375           31,111
PERIOD
                                                                 
CASH AND CASH EQUIVALENTS AT END OF PERIOD       $ 19,124        $ 32,231   
                                                                             

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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