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Alliance Holdings GP L.P.$28.37($.03)(.11%)

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 Alliance Holdings GP, L.P. Reports Quarterly and Full Year Financial Results; Maintains Quarterly Distribution of $0.55 Per Unit
   Monday, January 30, 2017 7:00:00 AM ET

Alliance Holdings GP, L.P. (AHGP ) today reported financial results for the quarter and year ended December 31, 2016 (the "2016 Quarter" and the "2016 Year", respectively) and, as previously announced, the Board of Directors of its general partner (the "Board") approved a distribution to unitholders of $0.55 per unit (an annualized rate of $2.20 per unit) for the 2016 Quarter, payable on February 17, 2017 to AHGP’s unitholders of record as of the close of trading on February 10, 2017. The announced distribution is equal to that declared for the quarter ended September 30, 2016 (the "Sequential Quarter") and compares to the unitholder distribution of $0.96 per unit for the quarter ended December 31, 2015 (the "2015 Quarter").

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. (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 2016 Quarter of $0.4375 per unit, or $1.75 per unit on an annualized basis, payable on February 14, 2017 to all unitholders of record as of the close of trading on February 7, 2017. (See ARLP Press Release dated January 27, 2017.)

AHGP also reported net income for the 2016 Quarter of $61.2 million, or net income per basic and diluted limited partner interest of $1.02 per unit, an increase of 113.0% compared to net income for the 2015 Quarter of $28.7 million, or $0.48 per basic and diluted limited partner unit. AHGP’s net income for the 2016 Quarter increased approximately 26.2% compared to net income for the Sequential Quarter of $48.5 million, or net income per basic and diluted limited partner interest of $0.81 per unit. For the year ended December 31, 2016, AHGP reported net income of $185.9 million, or $3.11 per basic and diluted limited partner unit, a decrease of 12.0% compared to $211.3 million, or $3.53 per basic and diluted limited partner unit, earned in the year ended December 31, 2015.

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. Consolidated net income includes earnings and losses attributable to both AHGP and non-controlling interests. Unless otherwise noted, any reference to net income in this release represents Net Income Attributable to AHGP.

Based on ARLP’s current declared distribution, AHGP expects to receive quarterly cash distributions from ARLP of $33.4 million, or $133.6 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 $1.6 million in general and administrative expenses.

A joint conference call regarding AHGP and ARLP’s 2016 Quarter and Year financial results and 2017 outlook is scheduled for today at 10:00 a.m. Eastern. To participate in the conference call, dial (855) 793-3259 and provide conference number 48863667. International callers should dial (631) 485-4928 and provide the same conference number. 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 (855) 859-2056 and provide conference number 48863667. International callers should dial (404) 537-3406 and provide the same conference number.

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 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 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 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, 2015, filed on February 26, 2016 and AHGP’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016, filed on May 10, 2016, August 5, 2016 and November 8, 2016, respectively, 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                                                                                                                                          Year Ended
                                                                                                                                                              December 31,                                                                                                                                            December 31,
                                                                                                   -----------------------------------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                          2016                                  2015                                  2016                                  2015     
                                                                                                   -------------------- -------------- --------------------                      -------------------- ---------- --------------------                      -------------------- -------------- --------------------                      -------------------- ---------- --------------------
SALES AND OPERATING REVENUES:
   Coal sales                                                                                                         $        504,210                                                              $    525,513                                                              $      1,861,788                                                              $  2,158,006
   Transportation revenues                                                                                                      10,379                                                                     9,274                                                                        30,111                                                                    33,597
   Other sales and operating revenues                                                                        12,702                               7,263                                  39,124                              81,708  
                                                                                                   -------------------- -------------- --------------------                      -------------------- ---------- --------------------                      -------------------- -------------- --------------------                      -------------------- ---------- --------------------
    Total revenues                                                                                          527,291                             542,050                               1,931,023                           2,273,311  
                                                                                                   -------------------- -------------- --------------------                      -------------------- ---------- --------------------                      -------------------- -------------- --------------------                      -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                          
EXPENSES:
   Operating expenses (excluding depreciation, depletion and                                                                   291,335                                                                   331,099                                                                     1,138,848                                                                 1,377,053
   amortization)
   Transportation expenses                                                                                                      10,379                                                                     9,274                                                                        30,111                                                                    33,597
   Outside coal purchases                                                                                               --                                                                         1                                                                         1,514                                                                       327
   General and administrative                                                                                                   19,912                                                                    15,417                                                                        75,087                                                                    69,076
   Depreciation, depletion and amortization                                                                                     81,869                                                                    90,983                                                                       322,509                                                                   333,713
   Asset impairment                                                                                  --                              89,435                          --                             100,130  
                                                                                                   -------------------- -------------- --------------------                      -------------------- ---------- --------------------                      -------------------- -------------- --------------------                      -------------------- ---------- --------------------
    Total operating expenses                                                                                                   403,495                                                                   536,209                                                                     1,568,069                                                                 1,913,896
                                                                                                                                                                                                                                                                                                                                          
INCOME FROM OPERATIONS                                                                                                         123,796                                                                     5,841                                                                       362,954                                                                   359,415
   Interest expense, net                                                                                                        (7,283 )                                                                  (7,527 )                                                                     (30,669 )                                                                 (31,153 )
   Interest income                                                                                                                   3                                                                        38                                                                            14                                                                     1,460
   Equity in income (loss) of affiliates, net                                                                                    2,502                                                                         3                                                                         3,543                                                                   (49,046 )
   Acquisition gain, net                                                                                                --                                                                    22,548                                                                --                                                                    22,548
   Other income                                                                                                 180                                 205                                     725                                 955  
                                                                                                   -------------------- -------------- --------------------                      -------------------- ---------- --------------------                      -------------------- -------------- --------------------                      -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                          
INCOME BEFORE INCOME TAXES                                                                                                     119,198                                                                    21,108                                                                       336,567                                                                   304,179
                                                                                                                                                                                                                                                                                                                                          
INCOME TAX EXPENSE                                                                                               10                                   3                                      14                                  21  
                                                                                                   -------------------- -------------- --------------------                      -------------------- ---------- --------------------                      -------------------- -------------- --------------------                      -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                          
NET INCOME                                                                                                                     119,188                                                                    21,105                                                                       336,553                                                                   304,158
  LESS: NET (INCOME)/LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS                                          (57,976 )                                                7,630                                (150,619 )                                              (92,846 )
                                                                                                   -------------------- -------------- --------------------                      -------------------- ---------- --------------------                      -------------------- -------------- --------------------                      -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                          
NET INCOME ATTRIBUTABLE TO ALLIANCE HOLDINGS GP, L.P. ("NET                                                           $         61,212                                           $     28,735                                           $        185,934                                           $    211,312  
INCOME OF AHGP")
                                                                                                   ==================== ============== ====================                      ==================== ========== ====================                      ==================== ============== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                          
BASIC AND DILUTED NET INCOME OF AHGP PER LIMITED PARTNER UNIT                                                         $           1.02                                           $       0.48                                           $           3.11                                           $       3.53  
                                                                                                   ==================== ============== ====================                      ==================== ========== ====================                      ==================== ============== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                          
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT                                                                           $           0.55                                           $       0.96                                           $           2.61                                           $     3.7725  
                                                                                                   ==================== ============== ====================                      ==================== ========== ====================                      ==================== ============== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                          
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)
                                                                                                                                                                                     
                                                                                                                                                                                     
                                                                                                                                                                   December 31,
                                                                                                          -------------------------------------------------------------------------------------------------------------------------------
                                                                                                               2016                                2015     
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
ASSETS
 CURRENT ASSETS:
    Cash and cash equivalents                                                                                                $     44,525                                                              $     38,678
    Trade receivables                                                                                                             152,032                                                                   122,875
    Other receivables                                                                                                                 279                                                                       696
    Due from affiliates                                                                                                                37                                                                        38
    Inventories, net                                                                                                               61,051                                                                   121,081
    Advance royalties, net                                                                                                          1,207                                                                     6,820
    Prepaid expenses and other assets                                                                           22,128                              29,890  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total current assets                                                                                                       281,259                                                                   320,078
 PROPERTY, PLANT AND EQUIPMENT:
    Property, plant and equipment, at cost                                                                                      2,920,988                                                                 3,044,260
    Less accumulated depreciation, depletion and amortization                                               (1,335,145 )                                           (1,243,985 )
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total property, plant and equipment, net                                                                                 1,585,843                                                                 1,800,275
 OTHER ASSETS:
    Advance royalties, net                                                                                                         29,372                                                                    21,295
    Equity investments in affiliates                                                                                              138,817                                                                    64,509
    Goodwill                                                                                                                      136,399                                                                   136,399
    Other long-term assets                                                                                      25,997                              23,960  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total other assets                                                                                      330,585                             246,163  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
TOTAL ASSETS                                                                                                                 $  2,197,687                                           $  2,366,516  
                                                                                                          ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                     
LIABILITIES AND PARTNERS’ CAPITAL
 CURRENT LIABILITIES:
    Accounts payable                                                                                                         $     64,460                                                              $     84,058
    Due to affiliates                                                                                                                 906                                                                       129
    Accrued taxes other than income taxes                                                                                          18,288                                                                    15,621
    Accrued payroll and related expenses                                                                                           41,576                                                                    37,031
    Accrued interest                                                                                                                  316                                                                       306
    Workers’ compensation and pneumoconiosis benefits                                                    9,897                                                                     8,688
    Current capital lease obligations                                                                                              27,196                                                                    19,764
    Other current liabilities                                                                                                      14,778                                                                    18,929
    Current maturities, long-term debt, net                                                                    149,874                             239,016  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total current liabilities                                                                                                  327,291                                                                   423,542
 LONG-TERM LIABILITIES:
    Long-term debt, excluding current maturities, net                                                                             399,446                                                                   578,490
    Pneumoconiosis benefits                                                                                                        62,822                                                                    60,077
    Accrued pension benefit                                                                                                        42,070                                                                    39,031
    Workers’ compensation                                                                               40,400                                                                    47,486
    Asset retirement obligations                                                                                                  125,266                                                                   122,434
    Long-term capital lease obligations                                                                                            85,540                                                                    80,150
    Other liabilities                                                                                           17,203                              21,174  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total long-term liabilities                                                                             772,747                             948,842  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total liabilities                                                                                     1,100,038                           1,372,384  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
                                                                                                                                                                                     
PARTNERS’ CAPITAL:
   Alliance Holdings GP, L.P. ("AHGP") Partners’ Capital:
   Limited Partners - Common Unitholders 59,863,000 units outstanding                                                598,077                                                                   567,259
   Accumulated other comprehensive loss                                                                        (16,550 )                                              (14,875 )
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total AHGP Partners’ Capital                                                                    581,527                                                                   552,384
   Noncontrolling interests                                                                                    516,122                             441,748  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
       Total Partners’ Capital                                                    1,097,649                             994,132  
                                                                                                          -------------------- ---------- --------------------                      -------------------- ---------- --------------------
TOTAL LIABILITIES AND PARTNERS’ CAPITAL                                                           $  2,197,687                                           $  2,366,516  
                                                                                                          ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                   
                                                                                            ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES
                                                                                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                          (In thousands)
                                                                                                            (Unaudited)
                                                                                                                                                                           
                                                                                                                                                                           
                                                                                                                                                          Year Ended
                                                                                                                                                         December 31,
                                                                                            ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   2016                                    2015       
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                          $        700,725                                                              $        714,408
                                                                                                                                                                           
CASH FLOWS FROM INVESTING ACTIVITIES:
   Property, plant and equipment:
       Capital expenditures                                                                                             (91,056 )                                                                    (212,797 )
       Decrease in accounts payable and accrued liabilities                                                              (4,402 )                                                                      (3,021 )
       Proceeds from sale of property, plant and equipment                                                                1,165                                                                         2,062
   Purchases of equity investments in affiliates                                                                        (76,797 )                                                                     (64,540 )
   Payments for acquisitions of businesses, net of cash acquired                                                         (1,011 )                                                                     (74,953 )
   Payment for acquisition of customer contracts                                                                        (23,000 )                                                              --
   Advances/loans to affiliate                                                                                   --                                                                        (7,300 )
   Other                                                                                               3,313                                   4,634  
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
       Net cash used in investing activities                                                        (191,788 )                                                 (355,915 )
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                           
CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings under securitization facility                                                                              44,600                                                                         6,500
   Payments under securitization facility                                                                               (27,700 )                                                                     (23,400 )
   Payments on term loan                                                                                               (156,250 )                                                                    (108,502 )
   Borrowings under revolving credit facilities                                                                         140,000                                                                       543,000
   Payments under revolving credit facilities                                                                          (270,000 )                                                                    (308,000 )
   Payment on long-term debt                                                                                     --                                                                      (205,000 )
   Proceeds on capital lease transactions                                                                                33,881                                                                       100,000
   Payments on capital lease obligations                                                                                (24,456 )                                                                      (4,312 )
   Payment of debt issuance costs                                                                                          (101 )                                                              --
   Contributions to consolidated company from affiliate noncontrolling                                                    3,014                                                                         2,147
   interest
   Contribution by limited partner - affiliate                                                                            1,000                                                                         1,500
   Net settlement of employee withholding taxes on vesting of ARLP                                                       (1,336 )                                                                      (2,719 )
   Long-Term Incentive Plan
   Distributions paid by consolidated partnership to noncontrolling                                                     (89,311 )                                                                    (117,362 )
   interests
   Distributions paid to Partners                                                                                      (156,242 )                                                                    (225,833 )
   Other                                                                                                (189 )                                                   (6,108 )
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
       Net cash used in financing activities                                                        (503,090 )                                                 (348,089 )
                                                                                            -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                           
NET CHANGE IN CASH AND CASH EQUIVALENTS                                                                                   5,847                                                                        10,404
                                                                                                                                                                           
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                                         38,678                                                                        28,274
                                                                                                                                                        
                                                                                            ---------------------------------------------------------                     ---------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                                     $         44,525                                           $         38,678  
                                                                                            ==================== ============== ====================                      ==================== ============== ====================

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170130005083r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170130005083/en/

SOURCE: Alliance Holdings GP, L.P.

Alliance Holdings GP, L.P. 
Brian L. Cantrell, 918-295-7673


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