ARLP Reports Record Coal Sales

Alliance Resource Partners, L.P.: Record Coal Sales Volumes and Pricing Lead to Record Quarterly Revenues, Up 37.0%, Increased EBITDA, Up 64.0%, and Net Income, Up 100.9%; Quarterly Cash Distribution Increased 2.5% to $0.83 Per Unit
TULSA, Okla., Oct 27, 2010 (BUSINESS WIRE) --

Alliance Resource Partners, L.P. (NASDAQ: ARLP) today reported record financial results for the quarter ended September 30, 2010 (the "2010 Quarter"). Strong increases in both coal sales volumes and average realized pricing drove revenues in the 2010 Quarter to a record $410.4 million, an increase of 37.0% compared to the quarter ended September 30, 2009 (the "2009 Quarter"). ARLP also posted significant growth in the 2010 Quarter for EBITDA, which increased 64.0% to $119.4 million; net income, which climbed 100.9% to $73.2 million; and net income per basic and diluted partner unit, which jumped 160.0% to $1.48. (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 the Board of Directors of its managing general partner increased the cash distribution to unitholders for the 2010 Quarter to $0.83 per unit (an annualized rate of $3.32 per unit), payable on November 12, 2010 to all unitholders of record as of the close of trading on November 5, 2010. The announced distribution represents a 9.2% increase over the cash distribution of $0.76 per unit for the 2009 Quarter and a 2.5% increase over the cash distribution of $0.81 per unit for the second quarter of 2010 (the "Sequential Quarter").

"Strong operating and financial performance through the first nine months has kept ARLP firmly on track to deliver our tenth consecutive year of record results in 2010," said Joseph W. Craft III, President and Chief Executive Officer. "Looking ahead, we remain encouraged by opportunities for growth beyond 2010. Ongoing discussions with customers seeking long-term supply commitments at attractive prices are positive indicators of future market strength. ARLP also has clear visibility to future production growth as development of the new Tunnel Ridge mine remains on schedule to begin longwall production in late 2011. Our consistently strong performance and future growth potential allowed our Board of Directors to again provide an attractive increase in quarterly distributions to ARLP's unitholders."

Consolidated Financial Results

Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009

Record revenues in the 2010 Quarter were driven primarily by increased coal sales volumes and higher average coal price realizations due to ARLP's strong coal sales contract position. Increased tons sold from the River View and Mettiki mines pushed coal sales volumes in the 2010 Quarter to a record 7.7 million tons, an increase of 24.2% over the 6.2 million tons sold in the 2009 Quarter. Primarily reflecting improved pricing under ARLP's coal sales contracts, average coal sales prices in the 2010 Quarter rose 13.4% to a record $51.68 per ton sold.

Production volumes rose 13.0% in the 2010 Quarter to 7.1 million tons, compared to 6.3 million tons in the 2009 Quarter, primarily as a result of increased coal production at the River View mine. Higher operating expenses in the 2010 Quarter were primarily related to the continued ramp up of production at our River View mine since commencement of initial production operations in August 2009. Increased coal production and sales volumes at River View and our Mettiki mine particularly impacted materials and supplies expenses, sales-related expenses and labor costs during the 2010 Quarter. Higher operating expenses also reflected costs associated with incidental production at our Tunnel Ridge mine development project.

Financial results for the 2010 Quarter compared to the 2009 Quarter were also impacted by higher depreciation, depletion and amortization, which increased $9.4 million to $37.6 million primarily as a result of additional depreciation expense associated with River View. In addition, outside coal purchases jumped $5.2 million due to increased sales into the export market and general and administrative expenses rose $4.3 million primarily as a result of increased incentive compensation expense.

Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009

For the nine months ended September 30, 2010 (the "2010 Period"), ARLP reported records for all major operating and financial metrics. Led by increased production and sales volumes at River View, tons produced climbed 10.7% and tons sold jumped 19.6%, compared to the nine months ended September 30, 2009 (the "2009 Period"). Higher coal sales volumes and increased average coal sales prices, which rose $4.10 per ton sold, combined to drive revenues for the 2010 Period to a record $1.2 billion, an increase of 27.7%, compared to the 2009 Period, while EBITDA for the 2010 Period increased 42.6% to a record $367.3 million, compared to EBITDA of $257.7 million for the 2009 Period. Net income for the 2010 Period increased 55.3% to $233.7 million, or $4.86 of net income per basic and diluted limited partner unit, compared to net income of $150.4 million, or $2.85 of net income per basic and diluted limited partner unit, for the 2009 Period.