Alliance Holdings GP, L.P. Reports Second Quarter 2006 Financial Results.TULSA Tulsa (tŭl`sə), city (1990 pop. 367,302), seat of Tulsa co., NE Okla., on the Arkansas River east of its junction with the Cimarron; inc. 1898. , Okla. -- -Alliance Holdings GP, L.P. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AHGP AHGP American History and Genealogy Project ) (the "Partnership") today reported net income for the quarter ended June June: see month. 30, 2006 ("2006 Quarter") of $20.4 million, an increase of 6.1% over net income of $19.2 million for the quarter ended June 30, 2005 ("2005 Quarter"). Basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income per limited partner unit for the 2006 Quarter decreased to $0.37 per unit, compared to $0.41 per limited partner unit for the 2005 Quarter, as a result of an increase in the number of common units outstanding due to the issuance of 12,500,000 common units on May 9, 2006 in conjunction with the Partnership's initial public offering. For the six months ended June 30, 2006, the Partnership reported net income of $43.3 million, or $0.85 per limited partner unit, compared to $36.9 million, or $0.78 of basic and diluted net income per limited partner unit, for the corresponding 2005 period. On July July: see month. 31, 2006, the Board of Directors of the managing general partner of Alliance Resource Partners, L.P. (NASDAQ: ARLP ARLP Acoustic Reference Level Plan ) declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly cash distribution for the 2006 Quarter of $0.50 per unit, or $2.00 per unit on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, which distribution will be paid on August 14, 2006 to all ARLP unitholders of record as of the close of trading on August 7, 2006. (See ARLP Press Release dated July 31, 2006.) Based on this distribution declaration, the Partnership expects to receive quarterly cash distributions from ARLP of $13.5 million, or $54.1 million on an annualized basis. Based on the distributions the Partnership will receive from its ownership interests in ARLP, the Board of Directors of its general partner declared a quarterly cash distribution for the 2006 Quarter of $0.215 per unit, or an annualized rate of $0.86 per unit. (See AHGP Press Release dated July 31, 2006.) "Our underlying assets generated solid results for the second quarter and set operating and financial records during the first half of 2006," said Joseph W. Craft, III, President and Chief Executive Officer. "As a result of this strong performance and our confidence in the future growth potential of ARLP, we are pleased to increase the initial distribution to our unitholders by 16.2% over the expected distribution reflected in our Prospectus." The distribution for the 2006 Quarter will be paid on August 18, 2006, to the Partnership's unitholders of record as of the close of trading on August 11, 2006. As described in the Prospectus, the initial quarterly cash distribution will be prorated for the portion of the quarter beginning on May 10, 2006, the first date of public trading in the Partnership's units. The amount of prorated distribution for this 52-day period is $0.12285 per unit. The Partnership reports its financial results on a consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: basis with the financial results of ARLP. The difference in the Partnership's consolidated net income and that of ARLP is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to non-controlling interest in consolidated ARLP net income resulting from the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of a significant portion of the Partnership's consolidated earnings to the limited partners of ARLP. The Partnership currently has no other operating activities apart from those conducted by the operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of ARLP, and the Partnership's principal sources of cash flow are its ownership of general and limited partner interests and incentive distribution rights in ARLP. The Partnership's primary cash requirements are for general and administrative expenses, working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , and distributions to its unitholders. At June 30, 2006, the Partnership had $500,000 outstanding under its revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. The statements and projections used throughout this release are based on current expectations. These statements and projections are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , 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. Alliance Holdings GP, L.P. is a limited partnership formed to own and control Alliance Resource Management GP, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , the managing general partner of Alliance Resource Partners, L.P., through which it holds a 1.98% general partner interest and the incentive distribution rights in Alliance Resource Partners, L.P. In addition, Alliance Holdings GP, L.P. owns 15,550,628 common units of Alliance Resource Partners, L.P. Partnership news, unit prices and additional information about Alliance Holdings GP, L.P. including filings with the Securities and Exchange Commission, are available at http://www.ahgp.com. For more information, contact the investor relations Investor relations The process by which the corporation communicates with its investors. department of Alliance Holdings GP, L.P. at 918-295-7674 or via e-mail at investorrelations@ahgp.com. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : 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 Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. include, but are not limited to, the following: initially, our operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. will be derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. exclusively from cash distributions from Alliance Resource Partners, L.P. ("ARLP"); the risks to the business of ARLP include: fluctuation Fluctuation A price or interest rate change. in coal prices, which could adversely affect ARLP's operating results and cash flows; if the direct or indirect benefit to ARLP from certain state and federal tax credits, including non-conventional source fuel tax credits is materially reduced, it could negatively impact ARLP's results of operations and reduce ARLP's cash available for distribution; from time to time, conditions in the coal industry may make it difficult for ARLP to extend existing or enter into new long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. contracts, which could materially adversely affect the stability and profitability of ARLP's operations. Additional information concerning these and other factors can be found in the Partnership's public periodic filings with the Securities and Exchange Commission. Except as required by applicable securities laws, the Partnership 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,
------------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Tons sold 5,570 5,757 11,672 11,388
Tons produced 5,802 5,642 12,050 11,371
SALES AND OPERATING
REVENUES:
Coal sales $ 205,513 $ 192,127 $ 423,725 $ 370,973
Transportation
revenues 8,956 8,384 18,990 18,007
Other sales and
operating
revenues 6,770 8,205 16,844 15,363
----------- ----------- ----------- -----------
Total
revenues 221,239 208,716 459,559 404,343
----------- ----------- ----------- -----------
EXPENSES:
Operating
expenses 140,877 128,126 292,887 247,518
Transportation
expenses 8,956 8,384 18,990 18,007
Outside
purchases 4,705 3,392 8,231 7,509
General and
administrative 7,333 10,547 14,491 16,255
Depreciation,
depletion and
amortization 16,290 13,398 31,015 27,029
----------- ----------- ----------- -----------
Total
operating
expenses 178,161 163,847 365,614 316,318
----------- ----------- ----------- -----------
INCOME FROM
OPERATIONS 43,078 44,869 93,945 88,025
INTEREST EXPENSE (3,443) (3,953) (6,592) (7,900)
INTEREST INCOME 909 583 1,816 1,056
OTHER INCOME 191 119 462 224
----------- ----------- ----------- -----------
INCOME BEFORE
INCOME TAXES,
CUMULATIVE
EFFECT OF
ACCOUNTING
CHANGE, MINORITY
INTEREST AND
NON-CONTROLLING
INTEREST 40,735 41,618 89,631 81,405
INCOME TAX EXPENSE 634 828 1,876 1,538
----------- ----------- ----------- -----------
INCOME BEFORE
CUMULATIVE
EFFECT OF
ACCOUNTING
CHANGE, MINORITY
INTEREST AND
NON-CONTROLLING
INTEREST 40,101 40,790 87,755 79,867
CUMULATIVE EFFECT
OF ACCOUNTING CHANGE - - 112 -
MINORITY INTEREST 43 - 43 -
----------- ----------- ----------- -----------
INCOME BEFORE
NON-CONTROLLING
INTEREST $ 40,144 $ 40,790 $ 87,910 $ 79,867
AFFILIATE NON-
CONTROLLING
INTEREST IN
CONSOLIDATED
PARTNERSHIP'S
NET INCOME (7) (8) (16) (16)
NON-AFFILIATE
NON-CONTROLLING
INTEREST IN
CONSOLIDATED
PARTNERSHIP'S
NET INCOME (19,748) (21,571) (44,623) (42,928)
----------- ----------- ----------- -----------
NET INCOME $ 20,389 $ 19,211 $ 43,271 $ 36,923
=========== =========== =========== ===========
BASIC AND DILUTED
NET INCOME PER
LIMITED PARTNER
UNIT $ 0.37 $ 0.41 $ 0.85 $ 0.78
=========== =========== =========== ===========
WEIGHTED AVERAGE
NUMBER OF UNITS
OUTSTANDING-
BASIC AND
DILUTED 54,505,857 47,363,000 50,954,160 47,363,000
=========== =========== =========== ===========
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