Alliance Holdings GP, L.P. Reports Record 2007 Financial Results

Business Wire, Jan 31, 2008

TULSA, Okla. -- Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported record net income for the year ended December 31, 2007 (the "2007 Period") of $87.9 million, an increase of 2.5% compared to $85.7 million for the year-ended December 31, 2006 (the "2006 Period"). Basic and diluted net income per limited partner unit for the 2007 Period decreased to $1.47 per unit, compared to $1.55 per basic and diluted limited partner unit for the 2006 Period. This decrease in basic and diluted net income per limited partner unit for the 2007 Period is the 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 AHGP's initial public offering.

For the quarter ended December 31, 2007 (the "2007 Quarter"), AHGP's net income decreased to $20.5 million, or $0.34 per basic and diluted limited partner unit, compared to net income of $23.1 million, or $0.39 per basic and diluted limited partner unit, for the quarter ended December 31, 2006.

On January 24, 2008, the Board of Directors of AHGP's general partner (the "Board") declared a quarterly cash distribution for the 2007 Quarter of $0.2875 per unit (an annualized rate of $1.15 per unit), payable on February 19, 2008, to AHGP's unitholders of record as of the close of trading on February 12, 2008. (See AHGP Press Release dated January 24, 2008.)

The declared distribution is based on the distribution AHGP will receive from its ownership interests in Alliance Resource Partners, L.P. (NASDAQ: ARLP). On January 24, 2008, ARLP announced a quarterly distribution for the 2007 Quarter of $0.585 per unit, or $2.34 per unit on an annualized basis, which will be paid on February 14, 2008 to all ARLP unitholders of record as of the close of trading on February 7, 2008. (See ARLP Press Release dated January 24, 2008.)

AHGP currently has no other operating activities apart from those conducted by the operating subsidiaries of ARLP and reports its financial results on a consolidated basis with the financial results of ARLP. AHGP's principal sources of cash flow are its ownership of general partner interests, limited partner interests and incentive distribution rights in ARLP. Based on ARLP's current declared distribution, AHGP expects to receive quarterly cash distributions from ARLP of $18.0 million, or $71.9 million, on an annualized basis. AHGP's primary cash requirements are for general and administrative expenses, including for 2008 an estimated $2.2 million in incremental general and administrative expenses associated with being a publicly traded limited partnership, working capital requirements and distributions to its unitholders. At December 31, 2007, AHGP had no borrowings outstanding under its revolving credit facility.

A conference call regarding AHGP's 2007 Quarter financial results is scheduled for today at 10:00 a.m. Eastern. To participate, dial (800) 591-6923 and provide pass code 78821227. International callers should dial (617) 614-4907. Investors may also listen to the call via the "investor information" section of AHGP's website at http://www.ahgp.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 71101078. International callers should dial (617) 801-6888.

About Alliance Holdings GP, L.P.

AHGP is a limited partnership formed to own and control Alliance Resource Management GP, LLC, the managing general partner of ARLP, through which it holds a 1.98% general partner interest and the incentive distribution rights in ARLP. In addition, AHGP owns 15,544,169 common units of ARLP.

News, unit prices and additional information about AHGP including filings with the Securities and Exchange Commission, are available at http://www.ahgp.com. For more information, contact the investor relations department of AHGP at 918-295-1415 or via e-mail at investorrelations@ahgp.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: initially, our operating cash flow will be derived exclusively from cash distributions from ARLP; the risks to the business of ARLP include: increased competition in coal markets and ARLP's ability to respond to the competition; fluctuation in coal prices, which could adversely affect ARLP's operating results and cash flows; risks associated with the expansion of ARLP's operations and properties; deregulation 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 customer contracts upon expiration of existing contracts; customer bankruptcies and/or 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; ARLP's productivity levels and margins that it earns on its 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 asset retirement obligations 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; risk associated with major mine-related accidents, such as mine fires or other interruptions; results of litigation, including claims not yet asserted; difficulty maintaining ARLP's surety bonds for asset retirement obligations 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; legislation, regulatory and court decisions; the impact from provisions of The Energy Policy Act of 2005; replacement of coal reserves; a loss or reduction of the direct or indirect benefit from certain state and federal tax credits; difficulty obtaining commercial property insurance, and risks associated with ARLP's increased participation (excluding any applicable deductible) in the commercial insurance property program.