Freitag, 10. Februar | 03:38 Uhr

Alliance Resource Partners, L.P. (NASDAQ: ARLP) today reported records
for revenues, EBITDA and net income for the year ended December 31, 2009
(the “2009 Period”). Revenues for the 2009 Period rose 6.4% to a record
$1.23 billion, compared to the year ended December 31, 2008 (the “2008
Period”). EBITDA and net income also reached record levels in the 2009
Period, as EBITDA increased 32.0% to $340.4 million and net income
jumped 43.2% to $192.2 million, or $3.56 of net income per basic and
diluted limited partner unit, both as compared to the 2008 Period. (For
a discussion of our net income presentation and a definition of EBITDA
and related reconciliations to comparable GAAP financial measures,
please see the end of this release.)

ARLP also announced that, for the seventh consecutive quarter, the Board
of Directors of its managing general partner increased the cash
distribution to unitholders for the quarter ended December 31, 2009 (the
“2009 Quarter”) to $0.775 per unit (an annualized rate of $3.10 per
unit), payable on February 12, 2010 to all unitholders of record as of
the close of trading on February 5, 2010. The announced distribution
represents an 8.4% increase over the cash distribution of $0.715 for the
quarter ended December 31, 2008 (the “2008 Quarter”) and a 2.0% increase
over the cash distribution of $0.76 for the 2009 third quarter.

“For the ninth consecutive year, ARLP posted new records for revenues,
EBITDA and net income – all against a backdrop of unprecedented economic
decline and turmoil in the coal markets,” said Joseph W. Craft III,
President and Chief Executive Officer. “I congratulate our organization
for not only responding to the challenges we faced by delivering
outstanding results in 2009, but also for positioning ARLP for future
growth by strengthening our customer base and long-term sales contract
position, reducing costs, bringing our new River View mine into
production and progressing with development of our Tunnel Ridge mine. As
demonstrated by these efforts, we remain focused on achieving ARLP’s
primary goal of creating opportunities for sustainable growth in cash
flow to provide strong distribution growth to our unitholders in the
future.”
Consolidated Financial ResultsThree Months Ended December 31, 2009 Compared to Three Months Ended
December 31, 2008
Comparing the 2009 Quarter to the 2008 Quarter, revenues decreased 4.1%
to $298.2 million. Unplanned customer outages, contractual deferrals and
weak spot market demand combined to drive coal sales volumes down 11.9%
in the 2009 Quarter to 6.1 million tons, compared to 7.0 million tons in
the 2008 Quarter. Partially offsetting lower sales volumes, average coal
sales prices increased 9.4% in the 2009 Quarter to $46.12 per ton sold,
compared to $42.15 per ton sold in the 2008 Quarter. Production volumes
also declined 3.0% in the 2009 Quarter to 6.3 million tons as ARLP
continued to adjust production levels to meet market demand.

Lower operating costs and outside coal purchases more than offset
reduced revenues in the 2009 Quarter and contributed to increased
EBITDA, which rose 31.7% to $82.7 million, and net income, which climbed
65.8% to $41.7 million, or $0.70 of net income per basic and diluted
limited partner unit. Operating expenses in the 2009 Quarter fell 12.2%
to $191.8 million, primarily as a result of lower coal production and
sales volumes, as well as reduced labor-related expenses, materials and
supplies expenses and contract mining costs. In addition, reflecting the
previously mentioned weakness in the spot coal market, outside coal
purchases declined $7.5 million in the 2009 Quarter compared to the 2008
Quarter.

Depreciation, depletion and amortization increased in the 2009 Quarter
to $33.8 million, compared to $31.0 million in the 2008 Quarter,
primarily as a result of commencing production operations at the new
River View mine. Financial results in the 2009 Quarter were also
impacted by higher general and administrative expenses, which increased
$3.1 million to $12.1 million, primarily as a result of higher incentive
compensation expenses.
Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
Record revenues in the 2009 Period reflect higher average coal sales
prices, which rose 15.8% to $46.60 per ton sold, more than offsetting an
8.1% reduction in coal sales volumes compared to the 2008 Period. As
discussed above, lower operating expenses and outside coal purchases in
the 2009 Period also contributed to record full-year EBITDA and net
income. Additionally, comparative results between the 2009 and 2008
Periods reflect increased general and administrative expenses,
depreciation, depletion and amortization expenses and net interest
expense in the 2009 Period, as well as the impact of non-recurring
benefits to net income related to favorable insurance and other claims
settlements and sale of non-core coal reserves in the 2008 Period.

Regional Results and Analysis

% Change

2009 Fourth

2008 Fourth

Quarter /

2009 Third

% Change

(in millions, except per ton data)

Quarter

Quarter

Quarter

Quarter

Sequential

 
Illinois Basin

Tons sold

4.710

5.238

(10.1

)%

4.925

(4.4

)%

Coal sales price per ton (1)

$

42.47

$

36.31

17.0

%

$

42.11

0.9

%

Segment Adjusted EBITDA Expense per ton (2)

$

26.00

$

27.85

(6.6

)%

$

27.93

(6.9

)%

Segment Adjusted EBITDA (2)

$

77.7

$

44.6

74.2

%

$

70.1

10.8

%

 
Central Appalachia

Tons sold

0.658

0.907

(27.5

)%

0.604

8.9

%

Coal sales price per ton (1)

$

65.69

$

61.42

7.0

%

$

68.43

(4.0

)%

Segment Adjusted EBITDA Expense per ton (2)

$

48.06

$

46.32

3.8

%

$

57.64

(16.6

)%

Segment Adjusted EBITDA (2)

$

11.7

$

13.8

(15.2

)%

$

6.5

80.0

%

 
Northern Appalachia

Tons sold

0.740

0.806

(8.2

)%

0.650

13.8

%

Coal sales price per ton (1)

$

51.87

$

58.48

(11.3

)%

$

50.58

2.6

%

Segment Adjusted EBITDA Expense per ton( 2)

$

47.60

$

44.24

7.6

%

$

47.18

0.9

%

Segment Adjusted EBITDA (2)

$

4.0

$

12.6

(68.3

)%

$

3.2

25.0

%

 
Total (3)

Tons sold

6.122

6.951

(11.9

)%

6.179

(0.9

)%

Coal sales price per ton (1)

$

46.12

$

42.15

9.4

%

$

45.58

1.2

%

Segment Adjusted EBITDA Expense per ton (2)

$

31.52

$

32.76

(3.8

)%

$

33.21

(5.1

)%

Segment Adjusted EBITDA (2)

$

94.8

$

71.8

32.0

%

$

82.8

14.5

%

(1) Sales price per ton is defined as total coal sales divided by total
tons sold.

(2) For definitions of Segment Adjusted EBITDA expense per ton and
Segment Adjusted EBITDA and related reconciliations to comparable GAAP
financial measures, please see the end of this release.

(3) Total includes other, corporate and eliminations.

As discussed above, generally weak coal demand and operating
difficulties at several customers resulted in lower total coal sales
volumes in the 2009 Quarter compared to both the 2008 Quarter and the
third quarter of 2009. In the Illinois Basin region, reduced deliveries
due to unplanned customer outages and contract deferrals lowered coal
sales volumes in the 2009 Quarter. Comparing the 2009 Quarter to the
2008 Quarter, weak demand in Central Appalachia and reduced spot market
sales in Northern Appalachia resulted in lower coal sales volumes in
both regions. Sequentially, however, coal sales volumes increased during
the 2009 Quarter in Central Appalachia due to the timing of coal
shipments and in Northern Appalachia as a result of increased sales into
the export market. Coal inventories increased during the 2009 Quarter to
a total of approximately 1.3 million tons, an increase of approximately
1.1 million tons over the 2008 Quarter and 265,000 tons over the
sequential 2009 quarter.

ARLP continued to benefit from higher contract pricing as total average
coal sales price increased in the 2009 Quarter compared to both the 2008
Quarter and the 2009 third quarter. The Illinois Basin in particular
realized improved contract pricing in the 2009 Quarter as the average
coal sales price increased by $6.16 per ton compared to the 2008
Quarter. Improved contract pricing in the Central Appalachian region
also pushed the average realized price per ton higher in the 2009
Quarter compared to the 2008 Quarter, while sequentially the sales price
per ton fell due to the mix of coal shipments in the 2009 Quarter
compared to the third quarter of 2009. In Northern Appalachia, sales
into the export market in the 2009 Quarter resulted in higher average
coal sales prices compared the third quarter of 2009. These recent
export sales, however, continue to reflect pricing well below those
realized in the 2008 Quarter.

On a consolidated basis, the previously discussed reductions in
operating expenses and outside coal purchases more than offset the
impact of lower coal sales volumes in the 2009 Quarter, resulting in
lower total Segment Adjusted EBITDA Expense per ton compared to the 2008
Quarter and the sequential 2009 quarter. Comparative results in the
Illinois Basin were similarly impacted by these dynamics. In the Central
Appalachian region, however, significantly lower coal sales volumes
outweighed reductions in operating expenses and outside coal purchases
to drive Segment Adjusted EBITDA Expense per ton higher in the 2009
Quarter compared to the 2008 Quarter. Sequentially, increased coal sales
volumes combined with lower operating expenses to reduce Segment
Adjusted EBITDA expense in the Central Appalachian region by 16.6%. In
Northern Appalachia, a longwall move and adverse mining conditions at
the Mountain View mine and increased expenses related to the Tunnel
Ridge development project also impacted Segment Adjusted EBITDA Expense
in the 2009 Quarter, compared to the 2008 Quarter and the 2009 third
quarter.
Outlook
Commenting on ARLP’s outlook, Mr. Craft said, “We are optimistic about
our chances to deliver another record year of financial performance in
2010. Our projections for this year are heavily reliant on contracted
sales commitments and the renewed strength we see in the metallurgical
and export coal markets. We see some encouraging signs of improvement in
the overall domestic economy as well, including increased coal-fired
electric generation which has contributed to improved coal markets so
far this year. Our generally positive outlook is tempered, however, by
concerns that high utility stockpiles, uncertain pricing for natural gas
and the potential of slower industrial growth may impact coal demand in
the short term. In light of these concerns we have delayed the staffing
for the seventh and eighth production units at our new River View mine
until the market demand for this production is more certain. Thus, our
production guidance assumes River View will be operating six units of
production by the second quarter of this year and will continue
operating at that level indefinitely. At this time, ARLP expects to
maintain the construction schedule which would allow us to begin
longwall operation at the Tunnel Ridge mine in the fourth quarter of
2011.”

For 2010, ARLP is currently anticipating total capital expenditures in a
range of $275.0 – $315.0 million, including maintenance capital
expenditures. Estimated capital expenditures include investments for the
continuing expansion of the River View mine and development of the
Tunnel Ridge mine; facilities upgrades, infrastructure improvements and
efficiency projects at various other operations; and increased
expenditures to comply with new regulatory requirements. ARLP is
currently estimating maintenance capital expenditures of approximately
$4.00 per ton produced. Actual maintenance capital expenditures in 2010
may vary due to changes in anticipated construction and maintenance
schedules. As a result of these planned investments, ARLP expects 2010
depreciation, depletion and amortization expenses to increase to a range
of $137.0 to $147.0 million, compared to $117.5 million in 2009.

ARLP is currently anticipating 2010 coal production to grow to a range
of 29.6 to 30.3 million tons and coal sales to increase to approximately
30.3 to 31.0 million tons, of which approximately 95% to 98% is
contractually committed and priced. ARLP has also secured sales
commitments for approximately 27.4 million tons, 20.4 million tons and
19.4 million tons in 2011, 2012 and 2013, respectively, of which
approximately 2.0 million tons and 5.4 million tons currently remain
open to market pricing in 2012 and 2013, respectively.

Based on current estimates for coal production, coal sales volumes and
coal sales prices, ARLP is anticipating 2010 revenues to grow to a range
of $1.47 to $1.55 billion, excluding transportation revenues. Although
mining operations continue to benefit from cost control initiatives
across the organization, ARLP currently anticipates certain expense
categories will increase on a per ton basis in 2010 driving total
Segment Adjusted EBITDA Expense per ton higher by approximately 3% to
5%, compared to 2009.

For 2010, ARLP is also estimating EBITDA in a range of $410.0 to $450.0
million and net income in a range of $240.0 to $270.0 million,
indicating projected growth of approximately 20% to 32% and 25% to 40%,
in EBITDA and net income respectively, compared to 2009. (For a
definition of EBITDA and related reconciliations to comparable GAAP
financial measures, please see the end of this release.)

A conference call regarding ARLP’s 2009 Quarter financial results is
scheduled for today at 10:00 a.m. Eastern. To participate in the
conference call, dial (866) 761-0749 and provide pass code 84576634.
International callers should dial (617) 614-2707 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.

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 25542069. 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, ARLP’s distributions to foreign investors are subject to
federal income tax withholding at the highest applicable tax rate.
About Alliance Resource Partners, L.P.
ARLP is a diversified producer and marketer of coal to major United
States utilities and industrial users. As the nation’s only publicly
traded master limited partnership involved in the production and
marketing of coal, ARLP is currently the fifth largest coal producer in
the eastern United States with mining operations in the Illinois Basin,
Northern Appalachian and Central Appalachian coal producing regions.
ARLP operates nine mining complexes in Illinois, Indiana, Kentucky,
Maryland and West Virginia and is also constructing a new mining complex
in West Virginia. In addition, ARLP operates a coal loading terminal on
the Ohio River at Mount Vernon, Indiana.

News, unit prices and additional information about ARLP, including
filings with the Securities and Exchange Commission, are available at http://www.arlp.com.
For more information, contact the investor relations department of ARLP
at (918) 295-7674 or via e-mail at investorrelations@arlp.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: increased competition in coal markets and our ability to
respond to the competition; sustained decreases in coal prices, which
could adversely affect our operating results and cash flows; decreases
in spot market prices for coal; risks associated with the expansion of
our 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; the impact and duration of the
current worldwide economic downturn; liquidity constraints, including
those resulting from the cost or unavailability of financing due to
current credit market conditions; customer bankruptcies 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, including those related to carbon emissions,
and other factors; legislation, regulatory and court decisions and
interpretations thereof, including issues related to climate change and
miner health and safety; our productivity levels and margins earned 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 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; risks associated with major mine-related accidents, such as
mine fires, or interruptions; results of litigation, including claims
not yet asserted; difficulty maintaining our 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;
replacement of coal reserves; a loss or reduction of benefits from
certain tax credits; and difficulty obtaining commercial property
insurance, and risks associated with our participation (excluding any
applicable deductible) in the commercial insurance property program.Additional information concerning these and other factors can be
found in ARLP’s public periodic filings with the Securities and Exchange
Commission (”SEC”), including ARLP’s Annual Report on Form 10-K for the
year ended December 31, 2008, filed on March 2, 2009 with the SEC.Except
as required by applicable securities laws, ARLP does not intend to
update its forward-looking statements.
 
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA(In thousands, except unit and per unit data)(Unaudited)
 

 
Three Months EndedDecember 31,
 
Year EndedDecember 31,

2009
 
2008
2009
 
2008

 
Tons Sold

6,122

6,951

24,975

27,170

Tons Produced

6,338

6,536

25,838

26,429

 
SALES AND OPERATING REVENUES:

Coal sales

$

282,363

$

293,016

$

1,163,871

$

1,093,059

Transportation revenues

10,386

11,407

45,733

44,755

Other sales and operating revenues

5,434

6,524

21,427

18,735

Total revenues

298,183

310,947

1,231,031

1,156,549

 
EXPENSES:

Operating expenses (excluding depreciation, depletion and
amortization)

191,834

218,552

797,527

801,854

Transportation expenses

10,386

11,407

45,733

44,755

Outside coal purchases

1,815

9,326

7,524

23,776

General and administrative

12,117

9,042

41,117

37,176

Depreciation, depletion and amortization

33,757

30,981

117,524

105,278

Gain from sale of coal reserves

-

-

-

(5,159

)

Net gain from insurance settlement and other

-

-

-

(2,790

)

Total operating expenses

249,909

279,308

1,009,425

1,004,890

 
INCOME FROM OPERATIONS

48,274

31,639

221,606

151,659

Interest expense, net

(7,383

)

(7,773

)

(30,847

)

(22,145

)

Interest income

13

1,314

1,049

3,727

Other income

693

177

1,247

875

 
INCOME BEFORE INCOME TAXES

41,597

25,357

193,055

134,116

INCOME TAX EXPENSE (BENEFIT)

(103

)

153

708

(480

)
NET INCOME

41,700

25,204

192,347

134,596

LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST

42

(24

)

(190

)

(420

)
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE PARTNERS, L.P. (”NET
INCOME OF ARLP”)

$

41,742

$

25,180

$

192,157

$

134,176

 
GENERAL PARTNERS’ INTEREST IN NET INCOME OF ARLP

$

15,826

$

13,366

$

60,639

$

45,697

 
LIMITED PARTNERS’ INTEREST IN NET INCOME OF ARLP

$

25,916

$

11,814

$

131,518

$

88,479

 
BASIC AND DILUTED NET INCOME OF ARLP PER LIMITED PARTNER UNIT
(1)

$

0.70

$

0.31

$

3.56

$

2.39

 
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT

$

0.76

$

0.70

$

2.95

$

2.53

 
BASIC WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING (1)

36,661,029

36,613,458

36,655,555

36,604,707

 
DILUTED WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING (1)

36,661,029

36,613,458

36,655,555

36,614,307

(1) On January 1, 2009, we adopted retrospectively the
provisions of Financial Accounting Standards Board (”FASB”) Accounting
Standards Codification (”ASC”) 260-10-55-102 through 55-110, Master
Limited Partnerships (Emerging Issues Task Force No. 07-4,
Application of the Two-Class Method under FASB Statement No. 128,
Earnings Per Share, to Master Limited Partnerships) which impacts
our presentation of earnings per unit in periods when our aggregate net
income exceeds the aggregate distributions because undistributed
earnings are no longer allocated to the IDR holder as previously
prescribed.)

 
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except unit data)(Unaudited)

ASSETS
December 31,
2009
 
2008CURRENT ASSETS:

Cash and cash equivalents

$

21,556

$

244,875

Trade receivables

91,223

87,922

Other receivables

3,159

6,018

Due from affiliates

83

-

Inventories

64,357

26,510

Advance royalties

3,629

3,200

Prepaid expenses and other assets

8,801

10,070

Total current assets

192,808

378,595

 
PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment, at cost

1,378,914

1,085,214

Less accumulated depreciation, depletion and amortization

(556,370

)

(468,784

)

Total property, plant and equipment, net

822,544

616,430

 
OTHER ASSETS:

Advance royalties

26,802

23,828

Other long-term assets

9,246

11,787

Total other assets

36,048

35,615

 
TOTAL ASSETS

$

1,051,400

$

1,030,640

 
LIABILITIES AND PARTNERS’ CAPITAL

CURRENT LIABILITIES:

Accounts payable

$

62,821

$

63,236

Due to affiliates

27

706

Accrued taxes other than income taxes

10,777

11,195

Accrued payroll and related expenses

22,101

20,555

Accrued interest

2,918

3,454

Workers’ compensation and pneumoconiosis benefits

9,886

9,377

Current capital lease obligation

324

351

Other current liabilities

11,062

11,911

Current maturities, long-term debt

18,000

18,000

Total current liabilities

137,916

138,785

 
LONG-TERM LIABILITIES:

Long-term debt, excluding current maturities

422,000

440,000

Pneumoconiosis benefits

34,344

31,436

Accrued pension benefit

19,696

19,952

Workers’ compensation

53,845

47,828

Asset retirement obligations

53,116

56,204

Due to affiliates

1,148

420

Long-term capital lease obligation

460

784

Other liabilities

7,895

5,039

Total long-term liabilities

592,504

601,663

Total liabilities

730,420

740,448

 
COMMITMENTS AND CONTINGENCIES

 
PARTNERS’ CAPITAL:

Alliance Resource Partners, L.P. (”ARLP”) Partners’ Capital:

Limited Partners – Common Unitholders 36,661,029 and 36,613,458
units outstanding, respectively

630,165

604,998

General Partners’ deficit

(293,153

)

(295,834

)

Accumulated other comprehensive loss

(17,149

)

(19,899

)

Total ARLP Partners’ Capital

319,863

289,265

Noncontrolling interest

1,117

927

Total Partners’ Capital

320,980

290,192

 
TOTAL LIABILITIES AND PARTNERS’ CAPITAL

$

1,051,400

$

1,030,640

ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)
 

Year Ended

December 31,

2009
 
2008

 
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

$

282,741

$

261,041

 
CASH FLOWS FROM INVESTING ACTIVITIES:

Property, plant and equipment:

Capital expenditures

(328,162

)

(176,482

)

Changes in accounts payable and accrued liabilities

5,727

10,046

Proceeds from sale of property, plant and equipment

8

2,708

Proceeds from sale of coal reserves

-

7,159

Purchase of marketable securities

4,527

-

Proceeds from marketable securities

(4,527

)

-

Payment for acquisition of coal reserves and other assets

-

(29,800

)

Receipts of prior advances on Gibson rail project

2,295

2,244

Net cash used in investing activities

(320,132

)

(184,125

)

 
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt

-

350,000

Borrowings under revolving credit facilities

-

88,850

Payments under revolving credit facilities

-

(116,850

)

Payments on capital lease obligation

(351

)

(377

)

Payment on long-term debt

(18,000

)

(18,000

)

Payment of debt issuance costs

(339

)

(1,721

)

Net settlement of employee withholding taxes on vesting of

Long-Term Incentive Plan

(791

)

-

Cash contributions by General Partners

31

866

Distributions paid to Partners

(167,131

)

(135,927

)

Net cash provided by (used in) financing activities

(186,581

)

166,841

 
EFFECT OF CURRENCY TRANSLATION ON CASH

653

-

 
NET CHANGE IN CASH AND CASH EQUIVALENTS

(223,319

)

243,757

 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

244,875

1,118

 
CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

21,556

$

244,875

 
Presentation of Net Income
On January 1, 2009 we adopted the provisions of Financial Accounting
Standards Board Accounting Standards Codification (”ASC”) 810-10-65
(Statement of Financial Accounting Standards No. 160, Noncontrolling
Interests in Consolidated Financial Statements), which establishes
accounting and reporting standards for noncontrolling ownership interest
in subsidiaries. Prior to adoption of ASC 810-10-65, consolidated net
income included earnings attributable to ARLP but excluded earnings
attributable to noncontrolling interests. Consolidated net income now
includes earnings attributable to both ARLP and noncontrolling
interests. Consolidated net income less earnings attributable to
noncontrolling interest is referred to as “net income attributable to
ARLP.” Unless otherwise noted, any reference above to net income in this
release represents net income attributable to ARLP.
Reconciliation of GAAP “Cash Flows
Provided by Operating Activities” to non-GAAP “EBITDA”, Reconciliation
of non-GAAP “EBITDA” to GAAP “Net Income” and “Net Income Attributable
to ARLP” (in thousands).
EBITDA is defined as net income before net interest expense, income
taxes, depreciation, depletion and amortization and net income
attributable to noncontrolling interest. 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;

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 with generally
accepted accounting principles. EBITDA is not intended to represent cash
flow and does not represent the measure of cash available for
distribution. Our method of computing EBITDA may not be the same method
used to compute similar measures reported by other companies, or EBITDA
may be computed differently by us in different contexts (i.e. public
reporting versus computation under financing agreements).

Three Months Ended
Year Ended
Year Ended

December 31,
December 31,
December 31,

2010E

2009
2008
2009
2008
Midpoint

Cash flows provided by operating activities

$

44,392

$

68,321

$

282,741

$

261,041

$

398,600

Non-cash compensation expense

(906

)

(1,077

)

(3,582

)

(3,931

)

(3,500

)

Asset retirement obligations

(670

)

(696

)

(2,678

)

(2,827

)

(2,500

)

Coal inventory adjustment to market

(2,139

)

187

(3,030

)

(452

)

-

Net gain on foreign currency exchange

466

-

653

-

-

Net gain (loss) on sale of property, plant and equipment

(19

)

138

(136

)

911

-

Gain on sale of coal reserves

-

-

-

5,159

-

Other

(137

)

(51

)

(537

)

(366

)

(600

)

Net effect of working capital changes

34,470

(10,637

)

36,440

(19,661

)

5,000

Interest expense, net

7,370

6,459

29,798

18,418

32,000

Income tax expense (benefit)

(103

)

153

708

(480

)

1,000

EBITDA

82,724

62,797

340,377

257,812

430,000

Depreciation, depletion and amortization

(33,757

)

(30,981

)

(117,524

)

(105,278

)

(142,000

)

Interest expense, net

(7,370

)

(6,459

)

(29,798

)

(18,418

)

(32,000

)

Income tax (expense) benefit

103

(153

)

(708

)

480

(1,000

)

Net income

41,700

25,204

192,347

134,596

255,000

Net (income) loss attributable to noncontrolling interest

42

(24

)

(190

)

(420

)

-

Net income attributable to ARLP

$

41,742

$

25,180

$

192,157

$

134,176

$

255,000

 
Reconciliation of GAAP “Operating
Expenses” to non-GAAP “Segment Adjusted EBITDA Expense per ton” and
Reconciliation of non-GAAP “EBITDA” to “Segment Adjusted EBITDA” (in
thousand, except per ton data).
Segment Adjusted EBITDA Expense per ton represents the sum of operating
expenses, outside coal purchases and other income divided by tons sold.
Transportation expenses are excluded as these expenses are passed
through to our customers, consequently we do not realize any margin on
transportation revenues. Segment Adjusted EBITDA Expense is used as a
supplemental financial measure by our management to assess the operating
performance of our segments. Segment Adjusted EBITDA Expense is a key
component of EBITDA in addition to coal sales and other sales and
operating revenues. The exclusion of corporate general and
administrative expenses from Segment Adjusted EBITDA Expense allows
management to focus solely on the evaluation of segment operating
performance as it primarily relates to our operating expenses. Outside
coal purchases are included in Segment Adjusted EBITDA Expense because
tons sold and coal sales include sales from outside coal purchases.

 
Three Months EndedDecember 31,
 
Three Months EndedSeptember 30,
2009
 
2008
2009

Operating expense

$

191,834

$

218,552

$

204,840

Outside coal purchases

1,815

9,326

517

Other income

(693

)

(177

)

(126

)

Segment Adjusted EBITDA Expense

$

192,956

$

227,701

$

205,231

Divided by tons sold

6,122

6,951

6,179

Segment Adjusted EBITDA Expense per ton

$

31.52

$

32.76

$

33.21

Segment Adjusted EBITDA is defined as net income before net interest
expense, income taxes, depreciation, depletion and amortization, general
and administrative expenses and income attributable to noncontrolling
interest.

 
Three Months EndedDecember 31,
 
Three Months EndedSeptember 30,
2009
 
2008
2009

EBITDA (See reconciliation to GAAP above)

$

82,724

$

62,797

$

72,791

General and administrative

12,117

9,042

9,959

Segment Adjusted EBITDA

$

94,841

$

71,839

$

82,750