Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported strong
financial results for the quarter ended September 30, 2016 (the
"2016 Quarter") and announced that the Board of Directors of its
general partner (the "Board") approved a distribution to
unitholders of $0.55 per unit (an annualized rate of $2.20 per
unit) for the 2016 Quarter, payable on November 18, 2016 to AHGP's
unitholders of record as of the close of trading on November 10,
2016. The announced distribution is equal to that declared for the
quarter ended June 30, 2016 (the "Sequential Quarter") and compares
to the unitholder distribution of $0.96 per unit for the quarter
ended September 30, 2015 (the "2015 Quarter").
AHGP's principal sources of cash flow are its ownership of
general partner interests, limited partner interests and incentive
distribution rights in Alliance Resource Partners, L.P. (NASDAQ:
ARLP). The declared distribution is based on the distribution AHGP
will receive from its ownership interests in ARLP, which today
announced a quarterly distribution for the 2016 Quarter of $0.4375
per unit, or $1.75 per unit on an annualized basis, payable on
November 14, 2016 to all unitholders of record as of the close of
trading on November 7, 2016. (See ARLP Press Release dated October
28, 2016.)
AHGP also reported net income for the 2016 Quarter of $48.5
million, or net income per basic and diluted limited partner
interest of $0.81 per unit, compared to net income for the 2015
Quarter of $56.1 million, or $0.94 per basic and diluted limited
partner unit. AHGP's net income for the 2016 Quarter increased
approximately 6.9% compared to net income for the Sequential
Quarter of $45.4 million, or net income per basic and diluted
limited partner interest of $0.76 per unit.
Operating results for AHGP reflect those of the operating
subsidiaries of ARLP and, as a result, AHGP reports its financial
results on a consolidated basis with the financial results of ARLP.
Consolidated net income includes earnings and losses attributable
to both AHGP and non-controlling interests. Unless otherwise noted,
any reference to net income in this release represents Net Income
Attributable to AHGP.
Based on ARLP's current declared distribution, AHGP expects to
receive quarterly cash distributions from ARLP of $33.4 million, or
$133.6 million on an annualized basis. AHGP's primary cash
requirements are for working capital, distributions to its
unitholders and, for the 2016 full year, an estimated $3.0 million
in general and administrative expenses.
AHGP and ARLP will discuss their 2016 Quarter financial results
during a joint conference call scheduled for today at 10:00
a.m. Eastern. To participate in the conference call, dial
(855) 793-3259 and provide conference number 42634095.
International callers should dial (631) 485-4928 and provide the
same conference number. Investors may also listen to the call via
the "investor information" section of ARLP's website at
http://www.arlp.com or 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 (855)
859-2056 and provide conference number 42634095. International
callers should dial (404) 537-3406 and provide the same conference
number.
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, AHGP's distributions to foreign investors
are subject to federal income tax withholding at the highest
applicable tax rate.
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
31,088,338 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
statements 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: changes in
competition in coal markets and the ARLP Partnership's ability to
respond to such changes; changes in coal prices, which could affect
the ARLP Partnership's operating results and cash flows; risks
associated with the ARLP Partnership's expansion of its operations
and properties; legislation, regulations, and court decisions and
interpretations thereof, including those relating to the
environment, mining, miner health and safety and health care;
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; changing global economic conditions or in
industries in which the ARLP Partnership's customers operate;
liquidity constraints, including those resulting from any future
unavailability of financing; customer bankruptcies, cancellations
or breaches to existing contracts, or other failures to perform;
customer delays, failure to take coal under contracts or defaults
in making payments; adjustments made in price, volume or terms to
existing coal supply agreements; fluctuations in coal demand,
prices and availability; the ARLP Partnership's productivity levels
and margins earned on its coal sales; changes in raw material
costs; changes in the availability of skilled labor; the ARLP
Partnership's ability to maintain satisfactory relations with
its employees; increases in labor costs, adverse changes in
work rules, or cash payments or projections associated with
post-mine reclamation and workers' compensation claims; increases
in transportation costs and risk of transportation delays or
interruptions; operational interruptions due to geologic,
permitting, labor, weather-related or other factors; risks
associated with major mine-related accidents, such as mine fires,
or interruptions; results of litigation, including claims not yet
asserted; difficulty maintaining the ARLP Partnership's surety
bonds for mine reclamation as well as workers' compensation and
black lung benefits; difficulty in making accurate assumptions and
projections regarding pension, black lung benefits and other
post-retirement benefit liabilities; the coal industry's share of
electricity generation, including as a result of environmental
concerns related to coal mining and combustion and the cost and
perceived benefits of other sources of electricity, such as natural
gas, nuclear energy and renewable fuels; uncertainties in
estimating and replacing the ARLP Partnership's coal reserves; a
loss or reduction of benefits from certain tax deductions and
credits; difficulty obtaining commercial property insurance, and
risks associated with the ARLP Partnership's participation
(excluding any applicable deductible) in the commercial insurance
property program; and difficulty in making accurate assumptions and
projections regarding future revenues and costs associated with
equity investments in companies we do not control.
Additional information concerning these and other factors can
be found in AHGP's public periodic filings with the Securities and
Exchange Commission ("SEC"), including AHGP's Annual Report on
Form 10-K for the year ended December 31, 2015, filed on
February 26, 2016 and AHGP's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2016 and June
30, 2016, filed on May 10, 2016 and August 5, 2016,
respectively, with the SEC. Except as required by applicable
securities laws, AHGP does not intend to update its forward-looking
statements.
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING
DATA (In thousands, except unit and per unit data)
(Unaudited) Three Months Ended Nine Months
Ended September 30, September 30, 2016
2015 2016 2015 SALES AND OPERATING
REVENUES: Coal sales $ 533,817 $ 547,466 $ 1,357,578 $
1,632,493 Transportation revenues 7,692 9,395 19,732 24,323 Other
sales and operating revenues 10,457 9,481
26,422 74,445 Total revenues
551,966 566,342 1,403,732
1,731,261
EXPENSES: Operating expenses
(excluding depreciation, depletion and amortization) 347,711
336,527 847,513 1,045,954 Transportation expenses 7,692 9,395
19,732 24,323 Outside coal purchases 1,514 2 1,514 326 General and
administrative 18,987 18,356 55,175 53,659 Depreciation, depletion
and amortization 80,612 84,661 240,640 242,730 Asset impairment
— 10,695 — 10,695
Total operating expenses 456,516 459,636 1,164,574 1,377,687
INCOME FROM OPERATIONS 95,450 106,706 239,158 353,574
Interest expense, net (8,001 ) (7,352 ) (23,386 ) (23,626 )
Interest income 3 286 11 1,422 Equity in income (loss) of
affiliates, net 1,105 (17,221 ) 1,041 (49,049 ) Other income
293 455 545 750
INCOME BEFORE INCOME TAXES 88,850 82,874 217,369
283,071
INCOME TAX EXPENSE 6 12
4 18
NET INCOME
88,844 82,862 217,365 283,053
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS (40,337 ) (26,765 )
(92,643 ) (100,476 )
NET INCOME
ATTRIBUTABLE TO ALLIANCE HOLDINGS GP, L.P. ("NET INCOME OF
AHGP") $ 48,507 $ 56,097 $ 124,722 $
182,577
BASIC AND DILUTED NET INCOME OF AHGP PER
LIMITED PARTNER UNIT $ 0.81 $ 0.94 $ 2.08
$ 3.05
DISTRIBUTIONS PAID PER LIMITED PARTNER
UNIT $ 0.55 $ 0.96 $ 2.06 $ 2.8125
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND
DILUTED 59,863,000 59,863,000
59,863,000 59,863,000
ALLIANCE HOLDINGS GP, L.P. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (In thousands, except unit data)
(Unaudited) September 30, December 31,
2016 2015 ASSETS CURRENT ASSETS: Cash
and cash equivalents $ 25,876 $ 38,678 Trade receivables 146,209
122,875 Other receivables 492 696 Due from affiliates 32 38
Inventories, net 89,904 121,081 Advance royalties, net 2,016 6,820
Prepaid expenses and other assets 18,240
29,890 Total current assets 282,769 320,078
PROPERTY,
PLANT AND EQUIPMENT: Property, plant and equipment, at cost
2,994,420 3,044,260 Less accumulated depreciation, depletion and
amortization (1,352,117 ) (1,243,985 ) Total
property, plant and equipment, net 1,642,303 1,800,275
OTHER
ASSETS: Advance royalties, net 30,872 21,295 Equity investments
in affiliate 128,051 64,509 Goodwill 136,399 136,399 Other
long-term assets 28,411 23,960 Total
other assets 323,733 246,163
TOTAL
ASSETS $ 2,248,805 $ 2,366,516
LIABILITIES AND PARTNERS’ CAPITAL CURRENT
LIABILITIES: Accounts payable $ 63,797 $ 84,058 Due to
affiliates 44 129 Accrued taxes other than income taxes 22,016
15,621 Accrued payroll and related expenses 43,396 37,031 Accrued
interest 2,607 306 Workers’ compensation and pneumoconiosis
benefits 8,701 8,688 Current capital lease obligations 27,035
19,764 Other current liabilities 15,420 18,929 Current maturities,
long-term debt, net 509,155 238,086
Total current liabilities 692,171 422,612
LONG-TERM
LIABILITIES: Long-term debt, excluding current maturities, net
144,949 579,420 Pneumoconiosis benefits 62,529 60,077 Accrued
pension benefit 38,239 39,031 Workers’ compensation 50,051 47,486
Asset retirement obligations 124,925 122,434 Long-term capital
lease obligations 92,376 80,150 Other liabilities 13,647
21,174 Total long-term liabilities
526,716 949,772 Total liabilities
1,218,887 1,372,384
COMMITMENTS AND
CONTINGENCIES PARTNERS’
CAPITAL: Alliance
Holdings GP, L.P. ("AHGP") Partners’ Capital: Limited Partners –
Common Unitholders 59,863,000 units outstanding 568,736 567,259
Accumulated other comprehensive loss (14,676 )
(14,875 ) Total AHGP Partners’ Capital 554,060 552,384
Noncontrolling interests 475,858 441,748
Total Partners’ Capital 1,029,918
994,132
TOTAL LIABILITIES AND PARTNERS’
CAPITAL $ 2,248,805 $ 2,366,516
ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited) Nine Months
Ended September 30, 2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES: $ 491,960 $ 527,210
CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant
and equipment: Capital expenditures (70,267 ) (159,182 ) Decrease
in accounts payable and accrued liabilities (7,965 ) (3,093 )
Proceeds from sale of property, plant and equipment 756 1,519
Purchases of equity investments in affiliates (65,367 ) (47,624 )
Payments for acquisitions of businesses, net of cash acquired
(1,011 ) (74,953 ) Payment for acquisition of customer contracts
(23,000 ) — Advances/loans to affiliate — (7,300 ) Other
2,167 1,807 Net cash used in investing
activities (164,687 ) (288,826 )
CASH FLOWS
FROM FINANCING ACTIVITIES: Borrowings under securitization
facility 44,600 6,500 Payments under securitization facility
(27,700 ) (6,500 ) Payments on term loan (106,250 ) (20,319 )
Borrowings under revolving credit facilities 140,000 463,000
Payments under revolving credit facilities (215,000 ) (200,000 )
Payment on long-term debt — (205,000 ) Proceeds on capital lease
transactions 33,881 — Payments on capital lease obligations (17,769
) (994 ) Contributions to consolidated company from affiliate
noncontrolling interest 2,557 1,483 Net settlement of employee
withholding taxes on vesting of ARLP Long-Term Incentive Plan
(1,336 ) (2,719 ) Distributions paid by consolidated partnership to
noncontrolling interests (69,680 ) (87,623 ) Distributions paid to
Partners (123,318 ) (168,365 ) Other (60 ) (5,583 )
Net cash used in financing activities (340,075 )
(226,120 )
NET CHANGE IN CASH AND CASH EQUIVALENTS
(12,802 ) 12,264
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 38,678 28,274
CASH AND CASH
EQUIVALENTS AT END OF PERIOD $ 25,876 $ 40,538
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version on businesswire.com: http://www.businesswire.com/news/home/20161028005108/en/
Alliance Holdings GP, L.P.Brian L. Cantrell,
918-295-7673
Alliance Holdings GP, L.P. Representing Limited Partner Interests (delisted) (NASDAQ:AHGP)
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