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Alliance Holdings GP, L.P. Reports Strong First Quarter 2008 Financial Results; and Declares Quarterly Distribution of $0.2875 Per Unit

TULSA, Okla.--(BUSINESS WIRE)--April 28, 2008--Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported net income for the quarter ended March 31, 2008 (the "2008 Quarter") of $23.0 million, which is comparable to net income of $23.1 million for the quarter ended March 31, 2007 (the "2007 Quarter"). Basic and diluted net income per limited partner unit for the 2008 Quarter decreased to $0.38 per unit, compared to $0.39 per basic and diluted limited partner unit for the 2007 Quarter.

The Board of Directors of AHGP's general partner (the "Board") also declared a quarterly cash distribution for the 2008 Quarter of $0.2875 per unit (an annualized rate of $1.15 per unit), payable on May 20, 2008, to AHGP's unitholders of record as of the close of trading on May 13, 2008.

The declared distribution is based on the distribution AHGP will receive from its ownership interests in Alliance Resource Partners, L.P. (NASDAQ: ARLP). On April 28, 2008, ARLP announced a quarterly distribution for the 2008 Quarter of $0.585 per unit, or $2.34 per unit on an annualized basis, which will be paid on May 15, 2008 to all ARLP unitholders of record as of the close of trading on May 8, 2008. (See ARLP Press Release dated April 28, 2008.)

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 $18.0 million, or $71.9 million on an annualized basis. AHGP's primary cash requirements are for general and administrative expenses, including for 2008 an estimated $2.2 million in incremental general and administrative expenses associated with being a publicly traded limited partnership, working capital requirements and distributions to its unitholders. At March 31, 2008, AHGP had no borrowings outstanding under its revolving credit facility.

AHGP and ARLP will discuss their 2008 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) 383-7998 and provide pass code 46988597. International callers should dial (617) 597-5329. Investors may also listen to the call via 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 11402371. International callers should dial (617) 801-6888.

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 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, other business combinations, or dispositions 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: initially, our operating cash flow will be derived exclusively from cash distributions from ARLP; the risks to the business of ARLP include: increased competition in coal markets and ARLP's ability to respond to the competition; fluctuation in coal prices, which could adversely affect ARLP's operating results and cash flows; risks associated with the expansion of ARLP's operations and properties; 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; customer bankruptcies and/or cancellations or breaches to existing contracts; customer delays or defaults in making payments; fluctuations in coal demand, prices and availability due to labor and transportation costs and disruptions, equipment availability, governmental regulations and other factors; ARLP's productivity levels and margins that it earns on its coal sales; greater than expected increases in raw material costs; greater than expected shortage of skilled labor; any unanticipated increases in labor costs, adverse changes in work rules, or unexpected cash payments 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; risk associated with major mine-related accidents, such as mine fires or interruptions; results of litigation, including claims not yet asserted; difficulty maintaining ARLP's surety bonds for mine reclamation as well as workers' compensation and black lung benefits; coal market's share of electricity generation; prices of fuel that compete with or impact coal usage, such as oil or natural gas; legislation, regulatory and court decisions and interpretations thereof, including but not limited to issues related to climate change; the impact from provisions of The Energy Policy Act of 2005; the impact from provisions of or changes in enforcement activities associated with the Mine Improvement and New Emergency Response Act of 2006 as well as subsequent federal and state legislation or regulations; replacement of coal reserves; a loss or reduction of direct or indirect benefits from certain state and federal tax credits; difficulty obtaining commercial property insurance, and risks associated with ARLP's participation (excluding any applicable deductible) in the commercial insurance property program.

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, 2007, filed on March 7, 2008 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,
                                             -------------------------
                                                 2008         2007
                                             ------------ ------------

SALES AND OPERATING REVENUES:
  Coal sales                                 $   269,158  $   238,870
  Transportation revenues                         10,620        8,679
  Other sales and operating revenues               3,713        9,478
                                             ------------ ------------
       Total revenues                            283,491      257,027
                                             ------------ ------------

EXPENSES:
  Operating expenses                             192,618      166,989
  Transportation expenses                         10,620        8,679
  Outside purchases                                2,903        6,266
  General and administrative                       9,316        8,553
  Depreciation, depletion and amortization        23,294       19,793
                                             ------------ ------------
       Total operating expenses                  238,751      210,280

INCOME FROM OPERATIONS                            44,740       46,747
 Interest expense                                 (2,988)      (2,821)
 Interest income                                     106          539
 Other income                                        217          901
                                             ------------ ------------
INCOME BEFORE INCOME TAXES, MINORITY
 INTEREST AND NON-CONTROLLING INTEREST            42,075       45,366
INCOME TAX EXPENSE (BENEFIT)                        (655)         575
                                             ------------ ------------
INCOME BEFORE MINORITY INTEREST AND NON-
 CONTROLLING INTEREST                             42,730       44,791
MINORITY INTEREST (EXPENSE)                         (141)          82
                                             ------------ ------------
INCOME BEFORE NON-CONTROLLING INTEREST            42,589       44,873
  Affiliate non-controlling interest in
   consolidated partnership's net income              (7)          (8)
  Non-affiliate non-controlling interest in
   consolidated partnership's net income         (19,557)     (21,794)
                                             ------------ ------------
NET INCOME                                   $    23,025  $    23,071
                                             ============ ============

BASIC AND DILUTED NET INCOME PER LIMITED
 PARTNER UNIT                                $      0.38  $      0.39
                                             ============ ============

DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT  $    0.2875  $      0.25
                                             ============ ============

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)

                                               March 31,  December 31,
ASSETS                                           2008         2007
                                              ----------- ------------

CURRENT ASSETS:
  Cash and cash equivalents                   $   16,732  $     1,783
  Trade receivables                              105,461       92,667
  Other receivables                                2,715        3,399
  Inventories                                     27,904       26,100
  Advance royalties                                4,452        4,452
  Prepaid expenses and other assets                6,174        9,281
                                              ----------- ------------
       Total current assets                      163,438      137,682

PROPERTY, PLANT AND EQUIPMENT:
  Property, plant and equipment, at cost         990,591      948,210
  Less accumulated depreciation, depletion and
   amortization                                 (448,789)    (427,572)
                                              ----------- ------------
       Total property, plant and equipment,
        net                                      541,802      520,638

OTHER ASSETS:
  Advance royalties                               21,692       25,974
  Other long-term assets                          16,683       18,194
                                              ----------- ------------
       Total other assets                         38,375       44,168
                                              ----------- ------------
TOTAL ASSETS                                  $  743,615  $   702,488
                                              =========== ============

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Accounts payable                            $   60,450  $    47,034
  Due to affiliates                                  115        1,343
  Accrued taxes other than income taxes           12,504       11,091
  Accrued payroll and related expenses            17,375       15,180
  Accrued interest                                 1,216        3,826
  Workers' compensation and pneumoconiosis
   benefits                                        8,120        8,124
  Current capital lease obligation                   371          377
  Other current liabilities                        8,309        6,754
  Current maturities, long-term debt              18,000       18,000
                                              ----------- ------------
       Total current liabilities                 126,460      111,729

LONG-TERM LIABILITIES:
  Long-term debt, excluding current maturities   158,000      136,000
  Pneumoconiosis benefits                         29,936       29,392
  Workers' compensation                           45,591       44,150
  Asset retirement obligations                    54,681       54,903
  Due to affiliates                                   39            -
  Long-term capital lease obligation               1,049        1,135
  Minority interest                                  648          507
  Other liabilities                                7,323        7,333
                                              ----------- ------------
       Total long-term liabilities               297,267      273,420
                                              ----------- ------------
       Total liabilities                         423,727      385,149
                                              ----------- ------------

NON-CONTROLLING INTEREST IN CONSOLIDATED
 PARTNERSHIP:
  Affiliate                                     (303,814)    (303,816)
  Non-Affiliates                                 365,142      358,601
                                              ----------- ------------
       Total non-controlling interest             61,328       54,785
                                              ----------- ------------

COMMITMENTS AND CONTINGENCIES

PARTNERS' CAPITAL:
 Limited Partners - Common Unitholders
  59,863,000 units outstanding, respectively     258,451      262,445
 Accumulated other comprehensive income              109          109
                                              ----------- ------------
  Total Partners' Capital                        258,560      262,554
                                              ----------- ------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL       $  743,615  $   702,488
                                              =========== ============
             ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands)
                             (Unaudited)

                                                   Three Months Ended
                                                        March 31,
                                                   -------------------
                                                     2008      2007
                                                   --------- ---------

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES        $ 65,885  $ 68,456
                                                   --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Property, plant and equipment:
       Capital expenditures                         (34,049)  (30,725)
       Changes in accounts payable and accrued
        liabilities                                   3,467    (5,803)
       Proceeds from sale of property, plant and
        equipment                                         7        53
  Proceeds from marketable securities                     -       260
  Payment for acquisition of coal reserves and
   other assets                                     (13,300)        -
  Advances on Gibson rail project                         -    (1,754)
  Receipts of prior advances on Gibson rail
   project                                              738         -
                                                   --------- ---------
       Net cash used in investing activities        (43,137)  (37,969)
                                                   --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under revolving credit facilities       76,100         -
  Payments under revolving credit facilities        (54,100)        -
  Payments on capital lease obligation                  (92)      (60)
  Contributions to consolidated partnership from
   affiliate non-controlling interest                     1         1
  Distributions paid by consolidated partnership
   to affiliate non-controlling interest                 (6)       (5)
  Distributions paid by consolidated partnership
   to non-affiliate non-controlling interest        (12,492)  (11,432)
  Distributions paid to Partners                    (17,210)  (14,965)
                                                   --------- ---------
       Net cash used in financing activities         (7,799)  (26,461)
                                                   --------- ---------

NET CHANGE IN CASH AND CASH EQUIVALENTS              14,949     4,026

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD      1,783    37,069

                                                   --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $ 16,732  $ 41,095
                                                   ========= =========

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

SOURCE: Alliance Holdings GP, L.P.