Alliance Resource Partners, L.P. Reports Strong Quarterly Financial and Operating Results; Declares Quarterly Cash Distribution of $0.585 Per Unit; and Increases 2008 Guidance

Business Wire, April 28, 2008

TULSA, Okla. -- On the strength of record revenues and coal sales volumes, Alliance Resource Partners, L.P. (NASDAQ: ARLP) today reported increased EBITDA for the quarter ended March 31, 2008 (the "2008 Quarter"). Net income for the 2008 Quarter was lower, compared to net income for the quarter ended March 31, 2007 (the "2007 Quarter"), primarily due to the loss of synfuel-related benefits and higher depreciation, depletion and amortization resulting from capital expenditures associated with ARLP's growth initiatives. (For a definition of EBITDA and reconciliation to GAAP, please see the end of this release).

ARLP also announced that the Board of Directors of its managing general partner (the "Board") declared a quarterly cash distribution for the 2008 Quarter of $0.585 per unit (an annualized rate of $2.34 per unit), payable on May 15, 2008 to all unitholders of record as of the close of trading on May 8, 2008. Increases to ARLP's quarterly cash distribution to unitholders are generally considered by the Board at its January and July meetings.

"Alliance Resource Partners once again started strong in 2008," said Joseph W. Craft III, President and Chief Executive Officer. "During the first quarter, ARLP responded to increased customer demand by posting records for coal sales and production volumes. We also successfully capitalized on market opportunities resulting in record revenues and increased EBITDA during the quarter - despite the loss of synfuel benefits. In addition, as announced last week, ARLP made significant progress on its growth initiatives as we received sufficient sales indications to begin construction of the River View mine and further expand the production capacity of our existing Illinois Basin operations."

Consolidated Financial Results

Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007

For the 2008 Quarter, ARLP reported net income of $43.2 million, or $0.93 of adjusted net income per diluted limited partner unit, compared to net income of $45.5 million, or $1.03 of adjusted net income per diluted limited partner unit, for the 2007 Quarter. EBITDA in the 2008 Quarter increased to $68.8 million, compared to EBITDA of $68.1 million in the 2007 Quarter. Financial results for the 2008 Quarter reflect the loss of synfuel-related benefits due to the expiration of the non-conventional synfuel tax credit on December 31, 2007. In the 2007 Quarter, ARLP realized benefits of approximately $8.1 million and $8.9 million for net income and EBITDA, respectively, from its various coal synfuel-related agreements. (For definitions of adjusted net income per limited partner unit and EBITDA and related reconciliations to GAAP, please see the end of this release.)

Revenues for the 2008 Quarter increased 10.3% to a record $283.6 million, compared to $257.1 million for the 2007 Quarter. Higher revenues in the 2008 Quarter reflect record coal sales volumes, which increased 13.2% to 7.0 million tons, compared to 6.2 million tons of coal sold during the 2007 Quarter. Although average coal sales prices increased in each of ARLP's operating regions, consolidated average coal sales prices decreased slightly in the 2008 Quarter, compared to the 2007 Quarter, due to revenues realized in the 2007 Quarter from synfuel-related and coal brokerage activities. The loss of $7.2 million in synfuel-related benefits drove other sales and operating revenues in the 2008 Quarter lower to $3.8 million, compared to $9.5 million in the 2007 Quarter.

Operating expenses in the 2008 Quarter increased to $192.6 million, compared to $167.0 million in the 2007 Quarter. The increase in operating expenses is primarily due to record coal production volumes, which increased 4.7% to 6.9 million tons in the 2008 Quarter, compared to 6.6 million tons in the 2007 Quarter. Increased labor related expenses, materials and supply costs, maintenance costs and regulatory compliance costs also contributed to higher operating expenses in the 2008 Quarter. Increased sales related expenses due to record coal sales revenues and volumes also drove operating expenses higher in the 2008 Quarter.

Financial results for the 2008 Quarter were also impacted by higher general and administrative costs which increased to $8.8 million in the 2008 Quarter, compared to $7.9 million in the 2007 Quarter. Higher general and administrative costs in the 2008 Quarter were primarily due to increased staffing and incentive compensation expenses. Depreciation, depletion and amortization increased by $3.5 million in the 2008 Quarter, compared to the 2007 Quarter, as a result of continuing capital expenditures related to infrastructure improvements, efficiency projects, expansion of production capacity and development of announced growth projects.

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

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