TULSA, Okla.--(BUSINESS WIRE)--
On the strength of improved pricing from contractual coal sales
commitments, Alliance Resource Partners, L.P. (NASDAQ: ARLP) today
reported records for EBITDA and net income for the quarter ended March
31, 2009 (the "2009 Quarter"). Comparing the 2009 Quarter to the quarter
ended March 31, 2008 (the "2008 Quarter"), EBITDA increased 56.6% to
$107.8 million and net income rose 68.0% to $72.5 million, or $1.56 of
net income per basic and diluted limited partner unit. (For a discussion
of net income presentation and a definition of EBITDA and related
reconciliations to GAAP, please see the end of this release).
ARLP also announced that the Board of Directors of its managing general
partner (the "Board") increased the cash distribution to unitholders for
the 2009 Quarter to $0.73 per unit (an annualized rate of $2.92 per
unit), payable on May 15, 2009 to all unitholders of record as of the
close of trading on May 8, 2009. The announced distribution represents a
24.8% increase over the cash distribution of $0.585 for the 2008 Quarter
and a 2.1% increase over the cash distribution of $0.715 for the fourth
quarter of 2008.
"With substantial coal supply commitments reflecting improved contract
pricing, ARLP entered 2009 well positioned for a strong start and we
delivered - posting new records for quarterly revenues, EBITDA and net
income," said Joseph W. Craft III, President and Chief Executive
Officer. "These results are particularly gratifying in light of the
challenges created by the continuing global recession and the disruptive
ice storm that hit western Kentucky during the quarter. Looking ahead,
even though reduced electricity generation and falling natural gas
prices have resulted in lower coal demand and weakened spot coal prices,
we remain optimistic that ARLP will achieve substantial year-over-year
growth in earnings and cash flows in 2009. Accordingly, our Board was
comfortable declaring another increase in quarterly cash distributions
to ARLP unitholders."
Consolidated Financial Results
Three Months Ended March 31, 2009 Compared to Three Months Ended
March 31, 2008
In addition to the previously discussed records for net income and
EBITDA, ARLP also reported record revenues for the 2009 Quarter of
$329.3 million, an increase of 16.1% compared to revenues of $283.6
million for the 2008 Quarter. Higher revenues in the 2009 Quarter
primarily reflect improved pricing under ARLP's coal sales contracts,
which helped push its average price realization up to a record $48.59
per ton sold, an increase of $10.11 per ton sold compared to the average
coal sales price realized in the 2008 Quarter.
Operating expenses increased to $196.4 million, compared to $192.6
million in the 2008 Quarter, primarily due to higher sales-related
expenses, materials and supply costs, and maintenance costs. As
anticipated, labor and labor-related expenses also increased in the 2009
Quarter as ARLP continued to hire and train new employees for the River
View and Tunnel Ridge mine development projects.
Financial results for the 2009 Quarter were also impacted by higher
depreciation, depletion and amortization, which increased in the 2009
Quarter to $27.4 million, compared to $23.3 million in the 2008 Quarter,
as a result of recent capital expenditures related to infrastructure
improvements, efficiency projects, reserve acquisitions and expansion of
production capacity. In addition, net interest expense increased $4.5
million in the 2009 Quarter to $7.4 million due to ARLP's $350 million
private placement of debt in June 2008.
Regional Results and Analysis
2009 2008 % 2008 %
Quarter Quarter Change Qtr 4 Change
Illinois Basin
Tons Sold (millions) 4.963 5.365 (7.5 )% 5.238 (5.3 )%
Coal sales price per ton (1) $ 44.64 $ 34.28 30.2 % $ 36.31 22.9 %
Segment Adjusted EBITDA Expense $ 26.48 $ 23.68 11.8 % $ 27.85 (4.9 )%
per ton(2)
Segment Adjusted EBITDA $ 90.8 $ 57.5 57.9 % $ 44.6 103.6 %
(millions) (2)
Central Appalachia
Tons Sold (millions) 0.764 0.845 (9.6 )% 0.907 (15.8 )%
Coal sales price per ton (1) $ 70.41 $ 58.08 21.2 % $ 61.42 14.6 %
Segment Adjusted EBITDA Expense $ 48.56 $ 45.12 7.6 % $ 46.32 4.8 %
per ton(2)
Segment Adjusted EBITDA $ 16.8 $ 11.1 51.4 % $ 13.8 21.7 %
(millions) (2)
Northern Appalachia
Tons Sold (millions) 0.700 0.784 (10.7 )% 0.806 (13.2 )%
Coal sales price per ton (1) $ 52.13 $ 46.12 13.0 % $ 58.48 (10.9 )%
Segment Adjusted EBITDA Expense $ 43.65 $ 35.98 21.3 % $ 44.24 (1.3 )%
per ton(2)
Segment Adjusted EBITDA $ 6.7 $ 9.0 (25.6 )% $ 12.6 (46.8 )%
(millions) (2)
Total (3)
Tons Sold (millions) 6.427 6.994 (8.1 )% 6.951 (7.5 )%
Coal sales price per ton (1) $ 48.59 $ 38.48 26.3 % $ 42.15 15.3 %
Segment Adjusted EBITDA Expense $ 31.26 $ 27.92 12.0 % $ 32.76 (4.6 )%
per ton(2)
Segment Adjusted EBITDA $ 117.5 $ 77.7 51.2 % $ 71.8 63.6 %
(millions) (2)
(1) Sales price per ton is defined as total coal sales divided by total tons
sold.
(2) For definitions of Segment Adjusted EBITDA expense per ton and Segment
Adjusted EBITDA and related reconciliations to GAAP, please see the end of this
release.
(3) Total includes other, corporate and eliminations.
Reduced coal sales volumes in all operating regions resulted in lower
total coal sales volumes of 6.4 million tons in the 2009 Quarter,
compared to 7.0 million tons in the 2008 Quarter. Coal sales volumes in
the Illinois Basin were impacted by weather disruptions in western
Kentucky during the 2009 Quarter, particularly at the Dotiki, Warrior
and Elk Creek mines. These disruptions coupled with unplanned customer
outages also contributed to increased Illinois Basin coal inventory
during the 2009 Quarter compared to the 2008 Quarter. Lower sales
volumes and increased coal inventory in the Central Appalachian region
reflect timing delays for scheduled coal shipments during the 2009
Quarter. Lower than anticipated spot market sales in the 2009 Quarter
impacted sales volumes and coal inventory in the Northern Appalachian
region, compared to the 2008 Quarter.
As previously discussed, ARLP continued to benefit from improved
contract pricing across all operating regions during the 2009 Quarter
resulting in a 26.3% increase in total average coal sales price per ton
over the 2008 Quarter. In addition, higher average coal sales prices per
ton in the Central Appalachian and Northern Appalachian regions reflect
increased price realizations on sales of purchased tons during the 2009
Quarter.
Total Segment Adjusted EBITDA Expense per ton increased 12.0% during the
2009 Quarter to $31.26 per ton sold, compared to the 2008 Quarter. As
previously discussed, all of ARLP's operating regions experienced higher
sales related expenses and labor expenses, as well as increased
materials and supply costs during the 2009 Quarter. In addition, costs
in the Illinois Basin were impacted by the weather disruptions in
western Kentucky while the Central and Northern Appalachian regions
experienced higher purchased coal costs in the 2009 Quarter. Expenses
related to our River View and Tunnel Ridge organic growth projects also
contributed to the increased costs for the Illinois Basin and Northern
Appalachian Basin, respectively, during the 2009 Quarter. Compared to
the fourth quarter of 2008, however, Segment Adjusted EBITDA expenses
per ton in the 2009 Quarter declined by 4.6% as ARLP began to benefit
from lower costs for certain consumables and cost control efforts at all
operations. (For a definition of Segment Adjusted EBITDA and
reconciliation to GAAP, please see the end of this release.)
Outlook
Commenting on ARLP's outlook, Mr. Craft said, "The effects of the
ongoing economic slowdown and a lack of confidence as to the timing of
an economic rebound continue to create significant uncertainties for
energy demand in general, including coal and competing fuels.
Consequently, we are seeing very little spot buying activity for 2009
and most of our customers are cautious about predicting 2010 demand
levels for coal. In response, ARLP is adjusting its production and sales
estimates for the balance of 2009 to reflect reduced demand. These
adjustments will include reducing overtime and moving a production unit
in the second half of this year from one of our western Kentucky
operations to our new River View mine. This move will allow us to stay
on our planned development schedule at River View while managing overall
production levels in a difficult market. In addition, we are adjusting
the construction schedule at our Tunnel Ridge mine to coincide initial
continuous miner development production with completion of the coal
preparation plant in mid-2010. As a result, longwall production at
Tunnel Ridge is now anticipated to begin in late 2011. We intend to
remain flexible and disciplined in our response to these evolving market
dynamics. Fortunately, our strong balance sheet and cash flows, solid
customer base and significant contracted positions leave ARLP well
positioned to successfully navigate through the current market
environment."
Due to the operational adjustments discussed above, ARLP is currently
anticipating coal production for 2009 in a range of 27.1 to 27.5 million
tons. ARLP currently has approximately 26.3 million tons of coal
contractually committed and priced in 2009 and has secured sales
commitments for approximately 25.3 million tons, 22.9 million tons and
16.2 million tons in 2010, 2011 and 2012, respectively. Approximately
1.5 million tons, 1.5 million tons and 2.5 million tons of these coal
sales commitments remain open to market pricing in 2010, 2011 and 2012,
respectively.
Based on current estimates for coal sales volumes and pricing for
uncommitted tons, ARLP is reducing 2009 estimates for revenues,
excluding transportation revenues, to a range of $1.29 to $1.37 billion,
and is currently anticipating EBITDA and net income near the lower end
of its previous guidance ranges of $400.0 to $440.0 million and $240.0
to $280.0 million, respectively. These estimated ranges reflect ARLP's
current expectations and its best judgments regarding the coal markets
and other factors, including coal sales volumes and price realizations
for uncommitted tons during the balance of 2009. As reflected in the
Forward-Looking Statements Disclosure below, a number of these factors
are beyond ARLP's control and, consequently, its actual results may
differ from current expectations. (For a discussion of net income
presentation and a definition of EBITDA and related reconciliations to
GAAP, please see the end of this release.)
Reflecting revised operating plans and mine construction schedules, ARLP
is also lowering estimated 2009 total capital expenditures, including
maintenance capital expenditures, to a range of $375.0 to $425.0
million. Due to lower capital expenditures in 2009, ARLP's liquidity is
expected to be $25 to $50 million higher for the year even with the
lower production outlook.
A conference call regarding ARLP's 2009 Quarter financial results is
scheduled for today at 10:00 a.m. Eastern. To participate in the
conference call, dial (800) 901-5218 and provide pass code 53546355.
International callers should dial (617) 786-4511. Investors may also
listen to the call via the "investor information" section of ARLP's
website at http://www.arlp.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 68264747. International callers should dial (617)
801-6888.
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, ARLP's distributions to foreign investors are subject to
federal income tax withholding at the highest applicable tax rate.
About Alliance Resource Partners, L.P.
ARLP is a diversified producer and marketer of coal to major United
States utilities and industrial users. ARLP, the nation's only publicly
traded master limited partnership involved in the production and
marketing of coal, is currently the fifth largest coal producer in the
eastern United States with operations in all major eastern coalfields.
ARLP currently operates eight underground mining complexes in Illinois,
Indiana, Kentucky, Maryland and West Virginia. We are constructing two
new mining complexes, one in Kentucky and one in West Virginia, and also
operate a coal loading terminal on the Ohio River at Mt. Vernon, Indiana.
News, unit prices and additional information about ARLP, including
filings with the Securities and Exchange Commission, are available at http://www.arlp.com.
For more information, contact the investor relations department of ARLP
at (918) 295-7674 or via e-mail at investorrelations@arlp.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: increased competition in coal markets and our ability to
respond to the competition; sustained decreases in coal prices, which
could adversely affect our operating results and cash flows; decreases
in spot market prices for coal; risks associated with the expansion of
our operations and properties; 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; the impact and duration of the
current worldwide economic downturn; liquidity constraints, including
those resulting from the cost or unavailability of financing due to
current credit market conditions; customer bankruptcies or cancellations
or breaches to 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, including those related to carbon emissions,
and other factors; legislation, regulatory and court decisions and
interpretations thereof, including but not limited to issues related to
climate change and miner health and safety; our productivity levels and
margins that we earn on our 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
post-mine reclamation 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;
risks associated with major mine-related accidents, such as mine fires,
or interruptions; results of litigation, including claims not yet
asserted; difficulty maintaining our surety bonds for mine reclamation
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; replacement of coal
reserves; a loss or reduction of direct or indirect benefits from
certain state and federal tax credits; and difficulty obtaining
commercial property insurance, and risks associated with our
participation (excluding any applicable deductible) in the commercial
insurance property program.
Additional information concerning these and other factors can be
found in ARLP's public periodic filings with the Securities and Exchange
Commission ("SEC"), including ARLP's Annual Report on Form 10-K for the
year ended December 31, 2008, filed on March 2, 2009 with the SEC. Except
as required by applicable securities laws, ARLP does not intend to
update its forward-looking statements.
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA
(In thousands, except unit and per unit data)
(Unaudited)
Three Months Ended
March 31,
2009 2008
Tons sold 6,427 6,994
Tons produced 6,871 6,865
SALES AND OPERATING REVENUES:
Coal sales $ 312,260 $ 269,158
Transportation revenues 10,890 10,620
Other sales and operating revenues 6,150 3,810
Total revenues 329,300 283,588
EXPENSES:
Operating expenses (excluding depreciation, 196,376 192,618
depletion and amortization)
Transportation expenses 10,890 10,620
Outside coal purchases 4,760 2,903
General and administrative 9,734 8,831
Depreciation, depletion and amortization 27,350 23,294
Total operating expenses 249,110 238,266
INCOME FROM OPERATIONS 80,190 45,322
Interest expense (7,981 ) (2,988 )
Interest income 631 98
Other income 226 217
INCOME BEFORE INCOME TAXES 73,066 42,649
INCOME TAX EXPENSE (BENEFIT) 426 (655 )
NET INCOME 72,640 43,304
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING (129 ) (141 )
INTEREST
NET INCOME ATTRIBUTABLE TO ALLIANCE RESOURCE
PARTNERS, L.P. $ 72,511 $ 43,163
("NET INCOME OF ARLP")
GENERAL PARTNERS' INTEREST IN NET INCOME OF ARLP $ 14,857 $ 9,156
LIMITED PARTNERS' INTEREST IN NET INCOME OF ARLP $ 57,654 $ 34,007
BASIC AND DILUTED NET INCOME OF ARLP PER LIMITED $ 1.56 $ 0.92
PARTNER UNIT (1)
DISTRIBUTIONS PAID PER COMMON UNIT $ 0.715 $ 0.585
WEIGHTED AVERAGE NUMBER OF UNITS
36,999,057 36,856,724
OUTSTANDING-BASIC
WEIGHTED AVERAGE NUMBER OF UNITS
36,999,057 36,895,333
OUTSTANDING-DILUTED
(1) On January 1, 2009, we adopted retrospectively the provisions of Emerging
Issues Task Force No. 07-4, Application of the Two-Class Method under FASB
Statement No. 128, Earnings Per Share, to Master Limited Partnerships which
impacts our presentation of earnings per unit in periods when our aggregate
net income exceeds the aggregate distributions because undistributed earnings
are no longer allocated to the IDR holder as previously prescribed under the
provisions of EITF No. 03-6, Participating Securities and the Two-Class Method
under FASB Statement No. 128, Earnings per Share, to Master Limited
Partnerships.
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)
(Unaudited)
March 31, December 31,
ASSETS
2009 2008
CURRENT ASSETS:
Cash and cash equivalents $ 211,968 $ 244,875
Trade receivables 114,484 87,922
Other receivables 4,977 6,018
Due from affiliates 123 -
Inventories 41,999 26,510
Advance royalties 3,200 3,200
Prepaid expenses and other assets 6,282 10,070
Total current assets 383,033 378,595
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost 1,160,927 1,085,214
Less accumulated depreciation, depletion and (486,129 ) (468,784 )
amortization
Total property, plant and equipment, net 674,798 616,430
OTHER ASSETS:
Advance royalties 26,886 23,828
Other long-term assets 10,343 11,787
Total other assets 37,229 35,615
TOTAL ASSETS $ 1,095,060 $ 1,030,640
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 86,613 $ 63,236
Due to affiliates 144 706
Accrued taxes other than income taxes 12,983 11,195
Accrued payroll and related expenses 20,441 20,555
Accrued interest 6,864 3,454
Workers' compensation and pneumoconiosis benefits 9,377 9,377
Current capital lease obligation 345 351
Other current liabilities 13,730 11,911
Current maturities, long-term debt 18,000 18,000
Total current liabilities 168,497 138,785
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities 440,000 440,000
Pneumoconiosis benefits 32,096 31,436
Accrued pension benefit 20,766 19,952
Workers' compensation 47,506 47,828
Asset retirement obligations 56,836 56,204
Due to affiliates 532 420
Long-term capital lease obligation 704 784
Other liabilities 4,975 5,039
Total long-term liabilities 603,415 601,663
Total liabilities 771,912 740,448
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
Alliance Resource Partners, L.P. ("ARLP") Partners'
Capital:
Limited Partners - Common Unitholders 36,661,029 and 636,240 604,998
36,613,458 units outstanding, respectively
General Partners' deficit (294,604 ) (295,834 )
Accumulated other comprehensive income (loss) (19,544 ) (19,899 )
Total ARLP Partners' Capital 322,092 289,265
Noncontrolling interest 1,056 927
Total Partners' Capital 323,148 290,192
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 1,095,060 $ 1,030,640
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2009 2008
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 75,278 $ 66,426
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures (85,597 ) (34,049 )
Changes in accounts payable and accrued liabilities 17,784 3,467
Proceeds from sale of property, plant and equipment - 7
Payment for acquisition of coal reserves and other - (13,300 )
assets
Receipts of prior advances on Gibson rail project 535 738
Net cash used in investing activities (67,278 ) (43,137 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities - 76,100
Payments under revolving credit facilities - (54,100 )
Payments on capital lease obligation (86 ) (92 )
Net settlement of employee withholding taxes on vesting (791 ) -
of Long-Term Incentive Plan
Cash contributions by General Partners 31 50
Distributions paid to Partners (40,121 ) (30,469 )
Net cash used in financing activities (40,967 ) (8,511 )
EFFECT OF CURRENCY TRANSLATION ON CASH 60 -
NET CHANGE IN CASH AND CASH EQUIVALENTS (32,907 ) 14,778
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 244,875 1,118
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 211,968 $ 15,896
Presentation of Net Income
Effective January 1, 2009 we adopted the provisions of statement of
financial accounting standards ("SFAS") No. 160, Noncontrolling
Interests in Consolidated Financial Statements, which establishes
accounting and reporting standards for noncontrolling ownership interest
in subsidiaries. Prior to adoption of SFAS No. 160, consolidated net
income included earnings attributable to ARLP but excluded earnings
attributable to noncontrolling interests. Consolidated net income now
includes earnings attributable to both ARLP and noncontrolling
interests. Unless otherwise noted, any reference above to net income in
this release represents net income attributable to ARLP.
Reconciliation of GAAP "Cash Flows
Provided by Operating Activities" to non-GAAP "EBITDA", Reconciliation
of non-GAAP "EBITDA" to GAAP "Net Income" and "Net Income Attributable
to ARLP" (in thousands).
EBITDA is defined as net income before net interest expense, income
taxes, depreciation, depletion and amortization and net income
attributable to noncontrolling interest. EBITDA is used as a
supplemental financial measure by our management and by external users
of our financial statements such as investors, commercial banks,
research analysts and others, to assess:
-- the financial performance of our assets without regard to financing
methods, capital structure or historical cost basis;
-- the ability of our assets to generate cash sufficient to pay interest
costs and support our indebtedness;
-- our operating performance and return on investment as compared to those
of other companies in the coal energy sector, without regard to
financing or capital structures; and
-- the viability of acquisitions and capital expenditure projects and the
overall rates of return on alternative investment opportunities.
EBITDA should not be considered as an alternative to net income, income
from operations, cash flows from operating activities or any other
measure of financial performance presented in accordance with generally
accepted accounting principles. EBITDA is not intended to represent cash
flow and does not represent the measure of cash available for
distribution. Our method of computing EBITDA may not be the same method
used to compute similar measures reported by other companies, or EBITDA
may be computed differently by us in different contexts (i.e. public
reporting versus computation under financing agreements).
Three Months Ended
Year Ended December 31,
March 31,
2009E
2009 2008
Midpoint
Cash flows provided by $ 75,278 $ 66,426 $ 436,700
operating activities
Non-cash compensation expense (842 ) (657 ) (3,400 )
Asset retirement obligations (675 ) (707 ) (2,800 )
Coal inventory adjustment to (9 ) (53 ) -
market
Net gain on foreign currency 60 - -
exchange
Net gain (loss) on sale of 1 (12 ) -
property, plant and equipment
Other (143 ) 238 -
Net effect of working capital 26,320 1,363 (41,000 )
changes
Interest expense, net 7,350 2,890 29,500
Income tax expense (benefit) 426 (655 ) 1,000
EBITDA 107,766 68,833 420,000
Depreciation, depletion and (27,350 ) (23,294 ) (129,000 )
amortization
Interest expense, net (7,350 ) (2,890 ) (29,500 )
Income tax (expense) benefit (426 ) 655 (1,000 )
Net income 72,640 43,304 260,500
Net income attributable to (129 ) (141 ) (500 )
noncontrolling interest
Net income attributable to $ 72,511 $ 43,163 $ 260,000
ARLP
Reconciliation of GAAP "Operating
Expenses" to non-GAAP "Segment Adjusted EBITDA Expense per ton" and
Reconciliation of non-GAAP "EBITDA" to "Segment Adjusted EBITDA" (in
thousand, except per ton data).
Segment Adjusted EBITDA Expense per ton represents the sum of operating
expenses, outside coal purchases and other income divided by tons sold.
Transportation expenses are excluded as these expenses are passed
through to our customers, consequently we do not realize any margin on
transportation revenues. Segment Adjusted EBITDA Expense is used as a
supplemental financial measure by our management to assess the operating
performance of our segments. Segment Adjusted EBITDA Expense is a key
component of EBITDA in addition to coal sales and other sales and
operating revenues. The exclusion of corporate general and
administrative expenses from Segment Adjusted EBITDA Expense allows
management to focus solely on the evaluation of segment operating
performance as it primarily relates to our operating expenses. Outside
coal purchases are included in Segment Adjusted EBITDA Expense because
tons sold and coal sales include sales from outside coal purchases.
Three Months Ended
March 31,
2009 2008
Operating expense $ 196,376 $ 192,618
Outside coal purchases 4,760 2,903
Other income (226 ) (217 )
Segment Adjusted EBITDA Expense $ 200,910 $ 195,304
Divided by tons sold 6,427 6,994
Segment Adjusted EBITDA Expense per ton $ 31.26 $ 27.92
Segment Adjusted EBITDA is defined as income before net interest
expense, income taxes, depreciation, depletion and amortization, general
and administrative expenses and income attributable to noncontrolling
interest.
Three Months Ended
March 31,
2009 2008
EBITDA (See reconciliation to GAAP above) $ 107,766 $ 68,833
General and administrative 9,734 8,831
Segment Adjusted EBITDA $ 117,500 $ 77,664
Source: Alliance Resource Partners, L.P.
Contact: Alliance Resource Partners, L.P.
Brian L. Cantrell,918-295-7673