Alliance Resource Partners, L.P. (NASDAQ: ARLP) today reported financial results for the quarter ended September 30, 2012 (the "2012 Quarter"). Net income in the 2012 Quarter fell to $60.5 million, or $0.89 per basic and diluted limited partner unit, compared to $104.1 million, or $2.16 per basic and diluted limited partner unit, for the quarter ended September 30, 2011 (the "2011 Quarter"). The decrease in the 2012 Quarter primarily reflects approximately $24.1 million of losses and charges related to the previously announced idling of the Pontiki mine, including a $19.0 million non-cash asset impairment, and approximately $17.8 million due to reduced coal sales into the metallurgical export markets. Adjusted EBITDA, which excludes the non-cash impairment of the Pontiki mine, decreased 4.0% to $146.6 million compared to the 2011 Quarter. (For definitions of EBITDA and Adjusted EBITDA and related reconciliations to comparable GAAP financial measures, please see the end of this release).
ARLP also announced that the Board of Directors of its managing general partner increased the cash distribution to unitholders for the 2012 Quarter to $1.085 per unit (an annualized rate of $4.34 per unit), payable on November 14, 2012 to all unitholders of record as of the close of trading on November 7, 2012. The announced distribution represents a 13.6% increase over the cash distribution of $0.955 per unit for the 2011 Quarter and a 2.1% increase over the cash distribution of $1.0625 per unit for the second quarter of 2012 (the “Sequential Quarter”).
"ARLP posted record coal sales and production volumes for the 2012 Quarter, however EBITDA and net income were negatively impacted by the unplanned idling of our Pontiki mine and the previously anticipated lack of export sales due to weak demand in the global coal markets" said Joseph W. Craft III, President and Chief Executive Officer. "As we navigate through the current environment, we are steadily making progress in building for the future. During the 2012 Quarter, our development projects at Gibson South and White Oak continued to move forward in line with our expectations. Performance of our new Tunnel Ridge longwall continued to improve as its production in the 2012 Quarter reached 764,000 tons, which was nearly 500,000 tons better than the Sequential Quarter. We also continued to add to our sales book during the 2012 Quarter, securing new coal sales commitments for approximately 1.65 million tons to be delivered through 2014, bringing our total year-to-date new commitments to approximately 28.7 million tons for deliveries through 2018. Our visible production growth and strong contract portfolio give us confidence that ARLP is well positioned to manage through current market challenges - allowing us to provide our unitholders with an attractive distribution increase for the eighteenth consecutive quarter."