Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported
financial results for the quarter ended June 30, 2017 (the "2017
Quarter") and, as previously announced, the Board of Directors of
its general partner (the "Board") approved a distribution to
unitholders of $0.73 per unit (an annualized rate of $2.92 per
unit) for the 2017 Quarter. The announced distribution is payable
on August 18, 2017 to AHGP's unitholders of record as of the close
of trading on August 11, 2017 and is an increase of 32.7% compared
to the distribution of $0.55 declared for the quarters ended June
30, 2016 (the "2016 Quarter") and March 31, 2017.
The declared distribution reflects the previously announced
agreement between AHGP and Alliance Resource Partners, L.P.
(NASDAQ: ARLP) pursuant to which AHGP’s incentive distribution
rights in ARLP have been eliminated and its approximate one percent
general partner interest in ARLP has been converted into a
non-economic interest in exchange for the issuance to AHGP of 56.1
million ARLP common units. (See ARLP and AHGP Press Release dated
July 28, 2017.)
AHGP's principal sources of cash flow are its ownership
interests in ARLP. The declared distribution is based on the
distribution AHGP will receive from its ownership interests in
ARLP, which previously announced a quarterly distribution for the
2017 Quarter of $0.50 per unit, or $2.00 per unit on an annualized
basis, payable on August 14, 2017 to all unitholders of record as
of the close of trading on August 7, 2017. (See ARLP Press Release
dated July 28, 2017.) Based on ARLP's current declared
distribution, AHGP expects to receive quarterly cash distributions
from ARLP of $44.3 million, or $177.2 million on an annualized
basis. AHGP's primary cash requirements are for working capital,
distributions to its unitholders and, for the 2017 full year, an
estimated $2.0 million in general and administrative expenses.
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.
The consolidated net income of AHGP includes earnings and losses
attributable to both AHGP and noncontrolling interests.
A joint conference call regarding AHGP and ARLP’s 2017 Quarter
financial results is scheduled for today at 10:00
a.m. Eastern. To participate in the conference call, dial
(888) 317-6016 and request to be connected to the Alliance Resource
Partners, L.P. and Alliance Holdings GP, L.P. earnings conference
call. International callers should dial (412) 317-6016; Canada
callers should dial (855) 669-9657 and request to be connected to
the same call. 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 US Toll
Free (877) 344-7529; International Toll (412) 317-0088; Canada Toll
Free (855) 669-9658 and request to be connected to replay access
code 10110611.
About Alliance Holdings GP, L.P.
AHGP is a limited partnership formed to own and control ARLP’s
managing general partner through which it holds a non-economic
general partner interest and an approximate one percent general
partner interest in ARLP’s operating subsidiary, Alliance Resource
Operating Partners L.P. In addition, AHGP owns 87,188,338 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 expansion of the ARLP Partnership's operations
and properties; legislation, regulations, and court decisions and
interpretations thereof, including those relating to the
environment and the release of greenhouse gases, 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 existing contracts upon expiration; 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;
continuation or worsening of depressed oil and gas prices adversely
affecting the ARLP Partnership’s investments in oil and gas mineral
interests; 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, including costs of health insurance and taxes
resulting from the Affordable Care Act, 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 post-mine reclamation as well as 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
the ARLP Partnership does 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, 2016, filed on
February 24, 2017 and AHGP's Quarterly Report in Form 10-Q for
the quarter ended March 31, 2017, filed on May 8, 2017 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 Six Months Ended June
30, June 30, 2017 2016 2017
2016 SALES AND OPERATING REVENUES: Coal sales $
382,262 $ 422,469 $ 821,006 $ 823,761 Transportation revenues 7,328
5,482 16,924 12,040 Other sales and operating revenues 9,029
11,090 21,694 15,965 Total revenues
398,619 439,041 859,624 851,766
EXPENSES: Operating expenses (excluding depreciation,
depletion and amortization) 238,668 251,947 501,460 515,526
Transportation expenses 7,328 5,482 16,924 12,040 General and
administrative 15,324 18,635 31,771 36,188 Depreciation, depletion
and amortization 59,020 73,697 124,147
144,304 Total operating expenses 320,340 349,761
674,302 708,058
INCOME FROM OPERATIONS
78,279 89,280 185,322 143,708 Interest expense, net (10,615)
(7,770) (18,131) (15,385) Interest income 56 4 81 8 Equity in
income (loss) of affiliates 2,916 (37) 6,616 (64) Debt
extinguishment loss (8,148) — (8,148) — Other income 389
161 1,687 252
INCOME BEFORE INCOME
TAXES 62,877 81,638 167,427 128,519
INCOME TAX
EXPENSE (BENEFIT) 5 6 (7) (2)
NET INCOME 62,872 81,632 167,434 128,521
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(20,289) (36,259) (69,840) (52,306)
NET INCOME ATTRIBUTABLE TO ALLIANCE HOLDINGS GP, L.P.
("NET INCOME OF AHGP") $ 42,583 $ 45,373 $ 97,594 $ 76,215
BASIC AND DILUTED NET INCOME OF AHGP PER LIMITED PARTNER
UNIT $ 0.71 $ 0.76 $ 1.63 $ 1.27
DISTRIBUTIONS PAID
PER LIMITED PARTNER UNIT $ 0.55 $ 0.55 $ 1.10 $ 1.51
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)
June 30, December 31, 2017 2016
ASSETS CURRENT ASSETS: Cash and cash equivalents $
43,987 $ 44,525 Trade receivables 118,801 152,032 Other receivables
241 279 Due from affiliates 33 37 Inventories, net 115,017 61,051
Advance royalties, net 1,207 1,207 Prepaid expenses and other
assets 15,644 22,128 Total current assets 294,930
281,259
PROPERTY, PLANT AND EQUIPMENT: Property, plant and
equipment, at cost 2,926,175 2,920,988 Less accumulated
depreciation, depletion and amortization (1,400,169)
(1,335,145) Total property, plant and equipment, net 1,526,006
1,585,843
OTHER ASSETS: Advance royalties, net 40,737 29,372
Equity investments in affiliates 149,592 138,817 Goodwill 136,399
136,399 Other long-term assets 34,135 25,997 Total
other assets 360,863 330,585
TOTAL ASSETS $
2,181,799 $ 2,197,687
LIABILITIES AND PARTNERS'
CAPITAL CURRENT LIABILITIES: Accounts payable $ 69,039 $
64,460 Due to affiliates 728 906 Accrued taxes other than income
taxes 20,160 18,288 Accrued payroll and related expenses 37,405
41,576 Accrued interest 5,583 316 Workers' compensation and
pneumoconiosis benefits 9,731 9,897 Current capital lease
obligations 27,855 27,196 Other current liabilities 15,543 14,778
Current maturities, long-term debt, net 75,700
149,874 Total current liabilities 261,744 327,291
LONG-TERM
LIABILITIES: Long-term debt, excluding current maturities, net
385,886 399,446 Pneumoconiosis benefits 63,662 62,822 Accrued
pension benefit 40,607 42,070 Workers' compensation 52,416 40,400
Asset retirement obligations 124,970 125,266 Long-term capital
lease obligations 71,510 85,540 Other liabilities 17,353
17,203 Total long-term liabilities 756,404
772,747 Total liabilities 1,018,148 1,100,038
PARTNERS’
CAPITAL: Alliance Holdings GP, L.P.
("AHGP") Partners' Capital: Limited Partners – Common Unitholders
59,863,000 units outstanding 630,516 598,077 Accumulated other
comprehensive loss (16,287) (16,550) Total AHGP
Partners' Capital 614,229 581,527 Noncontrolling interests
549,422 516,122 Total Partners’ Capital 1,163,651
1,097,649
TOTAL LIABILITIES AND PARTNERS’
CAPITAL $ 2,181,799 $ 2,197,687
ALLIANCE HOLDINGS GP, L.P. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30, 2017
2016 CASH FLOWS FROM OPERATING ACTIVITIES: $
293,332 $ 210,798
CASH FLOWS FROM INVESTING
ACTIVITIES: Property, plant and equipment: Capital expenditures
(67,517) (48,602) Increase (decrease) in accounts payable and
accrued liabilities 2,411 (10,894) Proceeds from sale of property,
plant and equipment 540 749 Contributions to equity investments in
affiliates (12,587) (33,185) Other 1,829 960 Net cash
used in investing activities (75,324) (90,972)
CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under
securitization facility 75,700 32,100 Payments under securitization
facility (100,000) (27,700) Payments on term loan (50,000) (56,250)
Borrowings under revolving credit facilities 40,000 140,000
Payments under revolving credit facilities (295,000) (75,000)
Borrowings under long-term debt 400,000 — Payment on long-term debt
(145,000) — Proceeds on capital lease transactions — 33,881
Payments on capital lease obligations (13,389) (9,660) Payment of
debt issuance costs (15,033) — Payment for debt extinguishment
(8,148) — Contributions to consolidated company from affiliate
noncontrolling interest 251 1,300 Net settlement of employee
withholding taxes on vesting of ARLP Long-Term Incentive Plan
(2,988) (1,336) Contribution by limited partner - affiliate 800 —
Distributions paid by consolidated partnership to noncontrolling
interests (39,553) (50,036) Distributions paid to Partners (65,849)
(90,393) Other (337) — Net cash used in financing
activities (218,546) (103,094)
NET CHANGE
IN CASH AND CASH EQUIVALENTS (538) 16,732
CASH AND
CASH EQUIVALENTS AT BEGINNING OF PERIOD 44,525 38,678
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 43,987 $ 55,410
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version on businesswire.com: http://www.businesswire.com/news/home/20170731005317/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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