Alliance Holdings GP, L.P. (NASDAQ: AHGP) today announced that the Board of Directors of its general partner declared a quarterly cash distribution for the quarter ended September 30, 2012 (the "2012 Quarter") of $0.72 per unit, or an annualized rate of $2.88 per unit. The declared distribution will be paid on November 19, 2012 to AHGP’s unitholders of record as of the close of trading on November 12, 2012.
The announced quarterly cash distribution represents an 18.0% increase over the $0.61 per unit distribution (an annualized rate of $2.44 per unit) for the quarter ended September 30, 2011 (the "2011 Quarter") and an increase of 3.2% over the second quarter 2012 distribution of $0.6975 per unit (an annualized rate of $2.79 per unit).
The declared distribution is based on the distribution AHGP will receive from its ownership interests in Alliance Resource Partners, L.P. (NASDAQ: ARLP). ARLP today announced a quarterly distribution for the 2012 Quarter of $1.085 per unit, or $4.34 per unit on an annualized basis, payable on November 14, 2012 to all unitholders of record as of the close of trading on November 7, 2012. (See ARLP Press Release dated October 26, 2012.)
AHGP reported net income for the 2012 Quarter of $39.5 million, or $0.66 per basic and diluted limited partner unit, compared to $57.1 million, or $0.95 per basic and diluted limited partner unit, in the 2011 Quarter. The decrease in net income during the 2012 Quarter primarily reflects approximately $24.1 million of losses and charges related to ARLP's idling of the Pontiki mine, including a non-cash asset impairment of $19.0 million, and reduced coal shipments into the metallurgical export markets. (For a discussion of net income presentation, please see the end of this release.)
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 $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 general and administrative expenses, including for 2012 an estimated $4.5 million to $4.75 million in general and administrative expenses.