UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported): April 28, 2015

 

ALLIANCE HOLDINGS GP, L.P.

(Exact name of registrant as specified in its charter)

 

 

1717 South Boulder Avenue, Suite 400, Tulsa, Oklahoma 74119

(Address of principal executive offices and zip code)

 

(918) 295-1415

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

ITEM 2.02                                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

 

In accordance with General Instruction B.2 of Form 8-K, the following information, including the exhibit referenced therein, are being furnished pursuant to Item 2.02 of Form 8-K and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are not subject to the liabilities of that section and are not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

 

On April 28, 2015, Alliance Holdings GP, L.P. (the “Partnership”) announced via press release its quarterly earnings and operating results for the quarter ended March 31, 2015.  A copy of the Partnership’s press release is attached hereto as Exhibit 99.1.

 

ITEM 9.01                                  FINANCIAL STATEMENTS AND EXHIBITS.

 

(d)                                           Exhibits

 

99.1                        Alliance Holdings GP, L.P. press release dated as of April 28, 2015.

 

2

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

	Alliance Holdings GP, L.P.
By:	Alliance GP, LLC,
	its general partner
By:	/s/ Joseph W. Craft III
	Joseph W. Craft III
	President and Chief Executive Officer
Date: April 29, 2015

 

3

Exhibit 99.1

 

PRESS RELEASE
	CONTACT: Brian L. Cantrell Alliance Holdings GP, L.P. 1717 South Boulder Avenue, Suite 400 Tulsa, Oklahoma 74119 (918) 295-7673

 

FOR IMMEDIATE RELEASE

 

ALLIANCE HOLDINGS GP, L.P.

Reports Quarterly Financial Results and Increases Quarterly Distribution by 2.5% to $0.9375 Per Unit

 

TULSA, OKLAHOMA, April 28, 2015 — Alliance Holdings GP, L.P. (NASDAQ: AHGP) today announced that the Board of Directors of its general partner (the “Board”) increased the cash distribution to unitholders for the quarter ended March 31, 2015 (the “2015 Quarter “) to $0.9375 per unit, or an annualized rate of $3.75 per unit, payable on May 20, 2015 to AHGP’s unitholders of record as of the close of trading on May 13, 2015.  The declared quarterly cash distribution represents a 10.6% increase over the cash distribution of $0.8475 per unit for the quarter ended March 31, 2014 (the “2014 Quarter”) and an increase of 2.5% over the fourth quarter 2014 distribution of $0.915 per unit.

 

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 2015 Quarter of $0.6625 per unit, or $2.65 per unit on an annualized basis, payable on May 15, 2015 to all unitholders of record as of the close of trading on May 8, 2015.  (See ARLP Press Release dated April 28, 2015.)

 

AHGP also reported net income for the 2015 Quarter of $65.5 million, or net income per basic and diluted limited partner interest of $1.09 per unit, a decrease of 2.8% compared to net income for the 2014 Quarter of $67.4 million, or $1.13 per basic and diluted limited partner 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.  For a discussion of net income presentation, please see the end of this release.)

 

Based on ARLP’s current declared distribution, AHGP expects to receive quarterly cash distributions from ARLP of $57.0 million, or $228.0 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 2015 full year an estimated $3.6 million in general and administrative expenses.

 

AHGP and ARLP will discuss their 2015 Quarter financial results during a joint conference call scheduled for Wednesday, April 29, 2015 at 10:00 a.m. Eastern.  To participate in the conference call, dial (855) 793-3259 and provide conference number 19590246.  International callers should dial (631) 485-4928 and provide the same conference number.  Investors may also listen to the call

 

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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 19590246.  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 Alliance Resource Partners, L.P. (NASDAQ: 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 Alliance Holdings GP, L.P. at (918) 295-1415 or via e-mail at [email protected].

 

***

 

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: 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, 2014, filed on February 27, 2015 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 March 31,
		2015			2014
SALES AND OPERATING REVENUES:
Coal sales		$	517,739		$	525,545
Transportation revenues		7,148			6,005
Other sales and operating revenues		35,413			10,384
Total revenues		560,300			541,934
EXPENSES:
Operating expenses (excluding depreciation, depletion and amortization)		334,362			322,242
Transportation expenses		7,148			6,005
Outside coal purchases		322			2
General and administrative		17,263			17,899
Depreciation, depletion and amortization		78,268			66,841
Total operating expenses		437,363			412,989
INCOME FROM OPERATIONS		122,937			128,945
Interest expense, net		(7,968		)	(8,063		)
Interest income		531			389
Equity in loss of affiliates, net		(9,686		)	(6,241		)
Other income		118			306
INCOME BEFORE INCOME TAXES		105,932			115,336
INCOME TAX BENEFIT		(2		)	—
NET INCOME		105,934			115,336
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(40,404		)	(47,889		)
NET INCOME ATTRIBUTABLE TO ALLIANCE HOLDINGS GP, L.P. (“NET INCOME OF AHGP”)		$	65,530		$	67,447
BASIC AND DILUTED NET INCOME OF AHGP PER LIMITED PARTNER UNIT		$	1.09		$	1.13
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT		$	0.915		$	0.8275
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING - BASIC AND DILUTED		59,863,000			59,863,000

 

 

ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)

 

		March 31,			December 31,
		2015			2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	30,303		$	28,274
Trade receivables		178,477			184,187
Other receivables		485			1,025
Due from affiliates		7,443			7,107
Inventories		114,643			83,155
Advance royalties		9,440			9,416
Prepaid expenses and other assets		20,418			31,362
Total current assets		361,209			344,526
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost		2,889,878			2,815,620
Less accumulated depreciation, depletion and amortization		(1,219,592		)	(1,150,414		)
Total property, plant and equipment, net		1,670,286			1,665,206
OTHER ASSETS:
Advance royalties		28,257			15,895
Due from affiliate		11,020			11,047
Equity investments in affiliates		232,049			224,611
Other long-term assets		31,884			27,470
Total other assets		303,210			279,023
TOTAL ASSETS		$	2,334,705		$	2,288,755
LIABILITIES AND PARTNERS’ CAPITAL
CURRENT LIABILITIES:
Accounts payable		$	95,599		$	86,277
Due to affiliates		239			370
Accrued taxes other than income taxes		21,333			19,461
Accrued payroll and related expenses		38,758			57,656
Accrued interest		6,028			318
Workers’ compensation and pneumoconiosis benefits		8,868			8,868
Current capital lease obligations		1,299			1,305
Other current liabilities		13,153			17,109
Current maturities, long-term debt		230,000			230,000
Total current liabilities		415,277			421,364
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities		615,000			591,250
Pneumoconiosis benefits		56,304			55,278
Accrued pension benefit		39,772			40,105
Workers’ compensation		50,438			49,797
Asset retirement obligations		93,972			91,085
Long-term capital lease obligations		15,287			15,624
Other liabilities		6,852			5,978
Total long-term liabilities		877,625			849,117
Total liabilities		1,292,902			1,270,481
COMMITMENTS AND CONTINGENCIES
PARTNERS’ CAPITAL:
Alliance Holdings GP, L.P. (“AHGP”) Partners’ Capital:
Limited Partners — Common Unitholders 59,863,000 units outstanding		590,869			580,234
Accumulated other comprehensive loss		(15,142		)	(15,456		)
Total AHGP Partners’ Capital		575,727			564,778
Noncontrolling interests		466,076			453,496
Total Partners’ Capital		1,041,803			1,018,274
TOTAL LIABILITIES AND PARTNERS’ CAPITAL		$	2,334,705		$	2,288,755

 

 

ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

		Three Months Ended
		March 31,
		2015			2014
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES		$	161,059		$	139,530
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures		(50,330		)	(69,463		)
Changes in accounts payable and accrued liabilities		659			(3,745		)
Proceeds from sale of property, plant and equipment		299			—
Purchases of equity investments in affiliates		(18,804		)	(30,000		)
Payment for acquisition of businesses, net of cash acquired		(28,078		)	—
Payments to affiliate for acquisition and development of coal reserves		—			(1,401		)
Other		1,807			—
Net cash used in investing activities		(94,447		)	(104,609		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on term loan		(6,250		)	—
Borrowings under revolving credit facilities		95,000			82,800
Payments under revolving credit facilities		(65,000		)	(117,800		)
Payments on capital lease obligations		(343		)	(358		)
Contribution to consolidated company from affiliate noncontrolling interest		333			—
Net settlement of employee withholding taxes on vesting of ARLP Long-Term Incentive Plan		(2,719		)	(2,991		)
Distributions paid by consolidated partnership to noncontrolling interests		(28,688		)	(26,286		)
Distributions paid to Partners		(54,775		)	(49,537		)
Other		(2,141		)	—
Net cash used in financing activities		(64,583		)	(114,172		)
NET CHANGE IN CASH AND CASH EQUIVALENTS		2,029			(79,251		)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		28,274			98,375
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	30,303		$	19,124

 

Presentation of Net Income

 

Consolidated net income includes earnings attributable to both AHGP and noncontrolling interests.  Unless otherwise noted, any reference to net income in this release represents net income attributable to AHGP.

 

-END-