Alliance Resource Partners, L.P. Reports Record Quarterly Financial and Operating Results; Declares Quarterly Cash Distribution of $0.46 Per Unit; and Confirms Guidance.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 Resource Partners, L.P. (Nasdaq:ARLP ARLP Acoustic Reference Level Plan ) (the "Partnership") today reported record financial and operating results for the quarter ended March 31, 2006 (the "2006 Quarter"). Net income for the 2006 Quarter increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 23% to a record $48.2 million, or $1.18 of adjusted net income per 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. limited partner unit, as compared to $39.1 million of net income, or $1.01 of adjusted net income per diluted limited partner unit, for the first quarter of 2005 (the "2005 Quarter"). The Partnership's use of adjusted net income per diluted limited partner unit is consistent with the methodology used by securities analysts and compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the 2006 Quarter consensus estimate for earnings per diluted limited partnership unit of $0.97. The Partnership also reported record EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $65.9 million in the 2006 Quarter which reflects a 16% increase over the 2005 Quarter EBITDA of $56.9 million. (For definitions of adjusted net income per limited partner unit and EBITDA and reconciliations to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , please see the end of this release.) The Partnership also announced that the Board of Directors of its managing general partner (the "Board") had 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 of $0.46 per unit for the first quarter ended March 31, 2006 (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. rate of $1.84 per unit), payable on May 15, 2006, to all unitholders of record as of May 8, 2006. Increases to the Partnership's quarterly cash distribution to unitholders are generally considered by the Board at its January January: see month. and July July: see month. meetings. "Alliance again delivered strong operating performance during the quarter, setting operating and shipping records for tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. produced and sold," said Joseph W. Craft III, President and Chief Executive Officer. "As a result of this exceptional performance and higher coal prices, we posted new financial results records for revenues, EBITDA and net income during the quarter." 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: Financial Results Driven by record coal sales volumes, revenues for the 2006 Quarter increased 22% to a record $238.3 million, compared to revenues of $195.6 million for the same period last year. Reflecting continued strength in the coal markets, revenues also benefited from higher average coal sales prices realized during the 2006 Quarter. Coal production for the 2006 Quarter increased 9% to a record 6.2 million tons, as compared to 5.7 million tons for the 2005 Quarter. Primarily as a result of higher costs resulting from increased production, as well as higher coal sales volumes and sales related expenses, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the 2006 Quarter rose to $152.0 million compared to $119.4 million for the 2005 Quarter. Operating expenses for the 2006 Quarter were also impacted by continuing upward pressures on labor related costs, insurance expense, maintenance expense, and materials and supply costs (particularly steel, power and fuel). General and administrative expenses increased in the 2006 Quarter to $7.2 million as compared to $5.7 million during the 2005 Quarter, which increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher unit-based incentive compensation expense. The Partnership also recorded a positive cumulative effect of accounting change in the 2006 Quarter of $0.1 million as a result of its adoption of Statement of Financial Accounting Standard No. 123R, Share-Based Payment.
Regional Results and Analysis
Northern
Illinois Basin Appalachia
------------------- ------------------
2006 Qtr 2005 Qtr 2006 Qtr 2005 Qtr
--------- --------- --------- --------
Tons sold (millions) 4.3 4.2 0.8 0.9
Coal sales price per ton (1) $32.80 $29.73 $30.22 $34.18
Adjusted EBITDA expense per
ton (2) $22.80 $20.07 $21.23 $20.85
Adjusted EBITDA (millions) (3) $51.3 $46.0 $7.9 $12.4
Central Appalachia Total (4)
------------------- -----------------
2006 Qtr 2005 Qtr 2006 Qtr 2005 Qtr
--------- --------- -------- --------
Tons sold (millions) 1.0 0.5 6.1 5.6
Coal sales price per ton (1) $48.41 $43.52 $35.76 $31.76
Adjusted EBITDA expense per
ton (2) $36.44 $36.92 $25.44 $21.92
Adjusted EBITDA (millions) (3) $11.9 $3.8 $73.0 $62.6
(1) Sales price per ton is defined as total coal sales dividend by
total tons sold.
(2) Adjusted EBITDA expense per ton represents the sum of operating
expenses, outside purchases and other income divided by total tons
sold.
(3) For a definition of Adjusted EBITDA and reconciliation to GAAP,
please see the end of this release.
(4) Total includes other and corporate.
The Partnership's coal sales volumes for the 2006 Quarter totaled a record 6.1 million tons, an increase of more than 8% over the 5.6 million tons of coal sold in the 2005 Quarter. Higher coal sales volumes during the 2006 Quarter were primarily attributable to increased sales from the Excel A full-featured spreadsheet for Windows and the Macintosh from Microsoft. It can link many spreadsheets for consolidation and provides a wide variety of business graphics and charts for creating presentation materials. No. 3 mine, which returned to production, following the MC Mining Fire Incident, on February February: see month. 21, 2005. (See ARLP Press Releases dated December December: see month. 27, 2004, January 7, January 14, February 21 and March 3, 2005.) Total average coal sales prices for the 2006 Quarter increased approximately 13% over the 2005 Quarter to a record $35.76 per ton sold. As a result of new coal sales agreements and the re-pricing of several 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. coal sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. at higher prices, average coal sales prices in the Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. Basin and Central Appalachian Ap`pa`la´chi`an a. 1. Of or pertaining to a chain of mountains in the United States, commonly called the Allegheny ltname> mountains. Noun 1. regions increased approximately 10% and 11%, respectively. Average sales prices realized in the Northern Appalachian region decreased approximately 12% primarily due to fewer tons sold into the higher priced export market during the 2006 Quarter. Total adjusted EBITDA expense increased $3.52 per ton during the 2006 Quarter to $25.44 per ton. In addition to the increasing cost pressures described above in each of the Partnership's operating regions, expenses also moved upward as a result of lower productivity at the Pattiki and Gibson County Gibson County is the name of several counties in the United States:
Outlook Reflecting strong coal market fundamentals, total U.S. coal shipments during the 2006 Quarter increased 2%, or nearly 6 million tons, despite the dampening effects of a mild winter. Longer term, the expansion of coal-fired Adj. 1. coal-fired - fueled by burning coal; "a coal-fired ship" coal-burning fueled - heated, driven, or produced by burning fuel power generation and development of coal conversion technologies are expected to result in significant growth in future coal demand. Coal stockpiles remain well below historical averages and ongoing difficulties associated with equipment backlogs, skilled labor shortages A Labor shortage is an economic condition in which there are insufficient qualified candidates (employees) to fill the market-place demands for employment at any price. This condition is sometimes referred to by Economists as "an insufficiency in the labor force. and transportation infrastructure continue to constrain con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. coal supply. Competing fuels face significant challenges, particularly with continued high natural gas prices and oil prices at or near record levels. "In response to continued strength in the coal markets, we recently announced the acquisition of approximately 99 million tons of Illinois Basin coal reserves and our intent to develop the River View mine in western Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. ," said Mr. Craft. "The River View project is the latest in Alliance's ongoing efforts to aggressively pursue significant growth opportunities. Over the past year we completed the transition of operations at our Pontiki Pontiki is a construction toy for building models of unusual creatures (which are also referred to as pontiki). Pontiki are constructed from colourful plastic components of two different types: a hollow shape dotted with holes, for representing the creatures' bodies, and mine into the Van Lear seam seam (sem) a line of union. osteoid seam on the surface of a bone, the narrow region of newly formed organic matrix not yet mineralized. and started the development of the Elk Creek Elk Creek may refer to the following: California:
Appalachia West Virginia coal mining region known for its abysmal poverty. [Am. Hist.: NCE, 160] See : Poverty . In addition to River View, we have also proposed three other new mines - Gibson South in the Illinois Basin and Tunnel Ridge and Penn Ridge in Northern Appalachia. Assuming these opportunities are developed as expected, we believe these growth projects offer potentially superior returns on investment and strengthen Alliance's position in these growing coal markets." Capital expenditures in the 2006 Quarter totaled $44.7 million. The Partnership currently expects total 2006 capital expenditures in the range of approximately $160 to $175 million, including maintenance capital of approximately $59 million. Major 2006 capital projects include the completion of development of the Elk Creek and Mountain View mining complexes, permitting and other development costs for the Gibson South, River View, Tunnel Ridge and Penn Ridge projects, construction of the Gibson County rail loadout facility and implementation of new safety initiatives at the Partnership's operations. The Partnership continues to contract sales tons at market prices higher than the average sales prices per ton realized last year. During the 2006 Quarter, the Partnership reached agreement for 1.2 million tons to be delivered in 2006 at prices higher than previously projected. As a result of these higher prices, the Partnership is confirming its previous guidance for 2006 revenues, excluding transportation revenues, in a range of $910.0 to $930.0 million, despite the potential loss of certain synfuel-related benefits described below. For 2006, approximately 1.4 million tons of coal sales volume remains open to market pricing. Currently, coal sales volume open to market pricing in 2007 and 2008 includes approximately 10.6 million tons and 16.7 million tons, respectively. Reflecting the Partnership's strong performance in the 2006 Quarter and based on current projections, the Partnership is also confirming its previous 2006 guidance ranges for EBITDA, $245.0 to $265.0 million, and net income, $160.0 to $180.0 million. The guidance ranges for both EBITDA and net income exclude the impact of any additional insurance recoveries attributable to the MC Mining Fire Incident. (For a reconciliation of estimated annual 2006 EBITDA to GAAP, please see the end of this release.) These 2006 guidance ranges include the net income benefit realized by the Partnership as of this date of approximately $10.2 million associated with its various coal synfuel-related agreements, as well as approximately $4.3 million of future net income benefit currently anticipated to be realized over the remainder of this year. The guidance ranges noted above exclude any future benefit attributable to the coal synfuel syn·fu·el n. A liquid or gaseous fuel derived from coal, shale, or tar sand, or obtained by fermentation of certain substances, such as grain. [syn(thetic) + fuel.] production facility owned by Synfuel Solutions Operating, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("SSO See single sign-on and CSO. SSO - single sign-on "), in light of SSO's decision as a result of the increase in the wellhead well·head n. 1. The source of a well or stream. 2. A principal source; a fountainhead. 3. The structure built over a well. wellhead Noun 1. price of domestic crude oil, to suspend operations at its facility located at the Partnership's Warrior Warrior, river, Ala.: see Black Warrior. mining complex. SSO has advised the Partnership that resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of operations of the synfuel facility is dependent on the price of crude oil in the future. The Partnership continues to receive benefits from the ongoing operation of two other synfuel facilities, the first located at the Gibson County mining complex and the second adjacent to the Mettiki mining complex, although the operation of these facilities in the future cannot be assured. The Partnership's realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of future synfuel-related benefits would be reduced if non-conventional synfuel tax credits become unavailable to the owners of coal synfuel facilities due to a rise in the price of crude oil or otherwise. The non-conventional synfuel tax credit is scheduled to expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. on December 31, 2007. 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 Resource Partners is the nation's only publicly traded master limited partnership involved in the production and marketing of coal. Alliance Resource Partners currently operates eight mining complexes in Illinois, Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Kentucky, Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). , Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York and West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. . 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: increased competition in coal markets and our ability to respond to the competition; fluctuation Fluctuation A price or interest rate change. in coal prices, which could adversely affect our operating results and cash flows; risks associated with the expansion of our operations and properties; deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. of the electric utility industry or the effects of any adverse change in the domestic coal industry, electric utility industry, or general economic conditions; dependence on significant customer contracts, including renewing re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. customer contracts upon expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of existing contracts; customer bankruptcies and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. cancellations or breaches of 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; our productivity levels and margins that we earn on our 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 Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. 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 ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. , permitting, labor and weather-related factors; risk associated with major mine-related accidents, such as mine fires or other interruptions; results of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; difficulty maintaining our surety bonds surety bond An insurance fee required before a duplicate security is issued to replace one that has been lost. The fee is approximately 4% of the market value of the security to be replaced. for mine reclamation Mine reclamation is the process of creating useful landscapes that meet a variety of goals, typically creating productive ecosystems (or sometimes industrial or municipal land) from mined land. as well as workers' compensation and black lung black lung: see pneumoconiosis. benefits; difficulty obtaining commercial property insurance, and risks associated with our participation (excluding any applicable deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). ) in the commercial insurance property program; and, a loss or reduction of the direct or indirect benefit from certain state and federal tax credits, including non-conventional source fuel tax credits. Additional information concerning these and other factors can be found in the Partnership's public periodic filings with the Securities and Exchange Commission ("SEC"), including the Partnership's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005, filed on March 16, 2006 with the SEC. Except as required by applicable securities laws, the Partnership does not intend to update its forward-looking statements.
ALLIANCE RESOURCE PARTNERS, 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,
-----------------------
2006 2005
----------- -----------
Tons sold 6,102 5,631
Tons produced 6,248 5,729
SALES AND OPERATING REVENUES:
Coal sales $218,212 $178,846
Transportation revenues 10,034 9,623
Other sales and operating revenues 10,074 7,158
----------- -----------
Total revenues 238,320 195,627
----------- -----------
EXPENSES:
Operating expenses 152,010 119,393
Transportation expenses 10,034 9,623
Outside purchases 3,526 4,117
General and administrative 7,158 5,708
Depreciation, depletion and amortization 14,722 13,628
Interest expense 2,245 3,474
----------- -----------
Total operating expenses 189,695 155,943
----------- -----------
INCOME FROM OPERATIONS 48,625 39,684
OTHER INCOME 271 105
----------- -----------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 48,896 39,789
INCOME TAX EXPENSE 759 710
----------- -----------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING
CHANGE 48,137 39,079
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 112 -
----------- -----------
NET INCOME $48,249 $39,079
=========== ===========
GENERAL PARTNERS' INTEREST IN NET INCOME $4,844 $1,685
=========== ===========
LIMITED PARTNERS' INTEREST IN NET INCOME $43,405 $37,394
=========== ===========
BASIC NET INCOME PER LIMITED PARTNER UNIT $0.83 $0.71
=========== ===========
DILUTED NET INCOME PER LIMITED PARTNER UNIT $0.83 $0.70
=========== ===========
DISTRIBUTIONS PAID PER COMMON AND SUBORDINATED
UNIT $0.46 $0.375
=========== ===========
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING-BASIC 36,426,306 36,260,880
=========== ===========
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING-DILUTED 36,765,016 36,992,828
=========== ===========
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
March 31, December 31,
------------- -------------
ASSETS 2006 2005
------------- -------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $43,450 $32,054
Trade receivables, net 94,537 94,495
Other receivables 2,755 2,330
Marketable securities 39,397 49,242
Inventories 23,685 17,270
Advance royalties 2,952 2,952
Prepaid expenses and other assets 6,088 8,934
------------- -------------
Total current assets 212,864 207,277
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost 679,228 635,086
Less accumulated depreciation, depletion
and amortization (344,819) (330,672)
------------- -------------
Total property, plant and equipment 334,409 304,414
OTHER ASSETS:
Advance royalties 18,362 16,328
Other long-term assets 4,521 4,668
------------- -------------
Total other assets 22,883 20,996
------------- -------------
TOTAL ASSETS $570,156 $532,687
============= =============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $60,738 $53,473
Due to affiliates 2,040 8,795
Accrued taxes other than income taxes 14,603 13,177
Accrued payroll and related expenses 14,550 12,466
Accrued pension benefit 8,519 7,588
Accrued interest 1,421 4,855
Workers' compensation and pneumoconiosis
benefits 7,813 7,740
Other current liabilities 4,952 5,120
Current maturities, long-term debt 18,000 18,000
------------- -------------
Total current liabilities 132,636 131,214
LONG-TERM LIABILITIES:
Long-term debt, excluding current
maturities 144,000 144,000
Pneumoconiosis benefits 24,002 23,293
Workers' compensation 31,754 30,050
Reclamation and mine closing 39,177 38,716
Due to affiliates 5,490 6,940
Other liabilities 2,835 2,697
------------- -------------
Total long-term liabilities 247,258 245,696
------------- -------------
Total liabilities 379,894 376,910
------------- -------------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
Limited Partners - Common Unitholders
36,426,306 units outstanding 494,994 461,068
General Partners' deficit (297,727) (298,270)
Unrealized loss on marketable securities (52) (68)
Minimum pension liability (6,953) (6,953)
------------- -------------
Total Partners' capital 190,262 155,777
------------- -------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $570,156 $532,687
============= =============
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
-------------------
2006 2005
---------- --------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $67,640 $28,504
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures (44,714) (16,914)
Changes in accounts payable and accrued
liabilities (567) -
Proceeds from sale of property, plant and
equipment 418 193
Purchase of marketable securities (4,735) (9,727)
Proceeds from marketable securities 14,596 9,721
---------- --------
Net cash used in investing activities (35,002) (16,727)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to Partners (21,242) (14,797)
---------- --------
Net cash used in financing activities (21,242) (14,797)
---------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 11,396 (3,020)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 32,054 31,177
---------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $43,450 $28,157
========== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
CASH PAID FOR:
Interest $6,864 $7,546
========== ========
Income taxes to taxing authorities $1,025 $250
========== ========
NON-CASH ACTIVITY:
Purchase of property, plant and equipment $8,797 $-
========== ========
Reconciliation of GAAP "Cash Flows Provided by Operating
Activities" to non-GAAP "EBITDA" and Reconciliation of Non-GAAP
"EBITDA" to GAAP "Net Income" (in thousands).
Three Months Ended Year Ended
March 31, December 31,
-------------------- ------------
2006 2005 2006E
---------- --------- ------------
Cash flows provided by operating
activities $67,640 $28,504 $250,000
Reclamation and mine closing (501) (452) (2,000)
Coal inventory adjustment to market (1,136) (51) -
Other 276 (236) (1,000)
Net effect of working capital
changes (3,308) 24,942 (3,600)
Interest expense 2,245 3,474 10,700
Income taxes 759 710 900
Cumulative effect of accounting
change (112) - -
---------- --------- ------------
EBITDA 65,863 56,891 255,000
Depreciation, depletion and
amortization (14,722) (13,628) (73,400)
Interest expense (2,245) (3,474) (10,700)
Income taxes (759) (710) (900)
Cumulative effect of accounting
change 112 - -
---------- --------- ------------
Net income $48,249 $39,079 $170,000
========== ========= ============
EBITDA is defined as net income before net interest expense, income taxes and depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and amortization. EBITDA is used as a supplemental financial measure by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others, to assess: --the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; --the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. ; --our operating performance and return on investment as compared to those of other companies in the coal energy sector, without regard to financing or capital structures; and --the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities. EBITDA should not be considered as an alternative to net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . EBITDA is not intended to represent cash flow and does not represent the measure of cash available for distribution. Our method of computing computing - computer EBITDA may not be the same method used to compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. similar measures reported by other companies, or EBITDA may be computed differently by us in different contexts (i.e. public reporting versus computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. under financing agreements Financing Agreements In the context of project financing, the documents which provide the project financing and sponsor support for the project as defined in the project contracts. ).
Reconciliation of EBITDA to Adjusted EBITDA (in thousands):
Three Months Ended Year Ended
March 31, December 31,
------------------- --------------
2006 2005 2006E
---------- -------- --------------
EBITDA (1) $65,863 $56,891 $255,000
General and administrative 7,158 5,708 31,000
---------- -------- --------------
Adjusted EBITDA $73,021 $62,599 $286,000
========== ======== ==============
Segment Adjusted EBITDA is defined as net income before income tax expense (benefit), net interest expense, depreciation, depletion and amortization, and general and administrative expenses.
Reconciliation of GAAP "Net Income per Limited Partner Unit"
reflecting the impact of EITF 03-6 to non-GAAP "Adjusted Net Income
per Limited Partner Unit"
Three Months Ended
March 31,
--------------------
2006 2005
---------- ---------
Net Income per Limited Partner Unit -
Basic 0.83 0.71
Diluted 0.83 0.70
Dilutive impact of theoretical distribution of
earnings pursuant to EITF 03-6 -
Basic 0.36 0.32
Diluted 0.35 0.31
Adjusted Net Income Per Limited Partner Unit -
Basic 1.19 1.03
Diluted 1.18 1.01
Net income per limited partner unit as dictated dic·tate v. dic·tat·ed, dic·tat·ing, dic·tates v.tr. 1. To say or read aloud to be recorded or written by another: dictate a letter. 2. a. by EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 03-6 is theoretical and pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma in nature and does not reflect the economic probabilities of whether earnings for an accounting period would or could be distributed to unitholders. The Partnership Agreement does not provide for the distribution of net income, rather, it provides for the distribution of available cash, which is a contractually defined term that generally means all cash on hand at the end of each quarter after establishment of sufficient cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. required to operate the Partnership in a prudent manner. Accordingly, the distributions we have paid historically and will pay in future periods are not impacted by net income per limited partner unit as dictated by EITF 03-6. In addition to net income per limited partner unit as calculated in accordance with EITF 03-6, we intend to continue to present "adjusted net income per limited partner unit," as reflected in the table above, which is consistent with our presentation of net income per limited partner unit in prior periods. "Adjusted net income per limited partner unit," as presented in the table above, is defined as net income after deducting the amount allocated to the general partners' interests, including the managing general partner's incentive distribution rights, divided by the weighted average number of outstanding limited partner units during the period. As part of this calculation, in accordance with the cash distribution requirements contained in the Partnership Agreement, Partnership net income is first allocated to the managing general partner based on the amount of incentive distributions attributable to the period. The remainder is then allocated between the limited partners and the general partners based on their respective percentage ownership in the Partnership. Adjusted net income per limited partner unit is used as a supplemental financial measure by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others, to assess: --the actual operation of our Partnership Agreement with respect to the rights of the general and limited partners participation in distributions, --the financial performance of our assets without regard to financing methods or capital structure; and our operating performance and return on investment as compared to those of other companies in the coal energy sector, without regard to financing or capital structures. Our method of computing adjusted net income per limited partner unit may not be the same method used to compute similar measures reported by other companies and may be computed differently by us in different contexts. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion