NAPTP Investor Conference May 22, 2015 Joseph W. Craft III Chief Executive Officer
Two Ways to Invest in Alliance 70.8% 29.2% L.P. Alliance Holdings L.P. Management / Interest GP , L.P. Interest Public Others (a) (NASDAQ: AHGP) Unitholders 59.9 million units outstanding 1.98% General IDRs 41.9% L.P. Partner…
Alliance Partnership Profiles NASDAQ Symbol: ARLP AHGP Unit Price: 31.97 49.27 LTM/YTD Unit Price Change: (31.4)%/(25.7)% (22.9)%/(19.1)% Annualized Distribution: 2.65 3.75 Distribution Yield: 8.3% 7.6% Coverage Ratio: 1.6x 1.0x…
The Alliance Strategy for Success 14 Consecutive Years of Record Performance Create Sustainable Growth in Cash Flow and Deliver Consistent Growth in Distributions to ARLP and AHGP Unitholders Focus on Low-cost operations High return…
Alliance Assets Diversified producer and marketer of coal to 1. Pattiki Complex major U.S. utilities and industrial users 2. River View Complex 3. Dotiki Complex 4. Warrior Complex 5. Hopkins Complex Pennsylvania 6. Gibson Complex…
Alliance Has Consistently Delivered ARLP Coal Tons Produced ARLP Coal Tons Sold Million Tons Million Tons ARLP Revenues ARLP EBITDA Dollars in Billions Dollars in Millions 7 7
Cash Flow Growth Drives Performance 28 Consecutive Quarters of Increased Distributions ARLP Distribution Per Unit 2.75 CAGR 10.6% 2.50 2.25 2.00 1.75 1.50 2010 2011 2012 2013 2014 2015Q1 Coverage ratio 1.9x…
IDRs Enhance Growth at AHGP AHGP Distribution Per Unit 4.00 CAGR 14.6% 3.50 3.00 2.50 2.00 1.50 2010 2011 2012 2013 2014 2015Q1 Source: Company filings Company filings - 2010 through 2014 distributions paid per…
Coal Industry Update
Industry Headline Issues Coal sector performance Regulatory impact Natural gas competition 11
Coal Sector Performance Metallurgical coal producers levered up in 2011, adding 10B of incremental debt just as met coal prices peaked Metallurgical coal prices have fallen by nearly half, leaving significant amounts of production…
Coal Sector Performance Coal markets have weakened for thermal producers and equity performance has come under recent pressure, but thermal producers have fared better than metallurgical-heavy peers Debt/EBITDA 14.0 12.0 10.0…
Impact of Regulations on Future Coal Demand Regulations (predominantly MATS) will lead to 57GW of eastern U.S. coal capacity being retired by 2020 Excess capacity of remaining 181GW of eastern U.S. coal plants can more than offset…
Future U.S. Coal Demand Expected to be Relatively Stable 1,200 1,000 800 Million Tons 600 400 200 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Utilities Exports Other Source: EIA 2015 Annual…
Coal & Natural Gas Will Continue to Dominate U.S. Power Generation and Compete for Market Share Electric Generation Coal vs Gas Market Share 80% 1,200 70% 1,000 Utility Coal Consumption Electricity Generation 60%…
Cost Competitiveness of Eastern Basins ILB and NAPP production costs have consistently been near or below 1.50/mmBTU ILB production costs were 1.36/mmBTU in 4Q 2014 Substantial amount of ARLP production is at the low end of ILB and…
Henry Hub Price per MMBtu 0.00 1.00 2.00 3.00 4.00 5.00 6.00 NYMEX Natural Gas May 19, 2015 Jan2011 Mar2011 May2011 Jul2011 Sep2011 Nov2011 Jan2012 Mar2012 May2012 Jul2012 Sep2012 Nov2012 Jan2013 Mar2013…
ILB and NAPP Capturing Market Share from CAPP Current low gas prices and tepid power demand environment Eastern utility consumption expected to stabilize at 250M tons ILB and NAPP expected to maintain the market share captured from…
Natural Gas Prices to Rise in Short Term Average gas price of 2.86/mmBTU in 2015 expected to increase to 3.38/mmBTU in 2016; 4.26/mmBTU in 2017 Anticipated gas price increase driven by decline in E&P capital budgets Reduced well…
Alliance is Well Positioned for the Future
ARLP is a Preferred Supplier Reliable performance history Strong balance sheet Multiple transportation options Direct rail CSX and NS Direct barge Ohio and Green Rivers Truck and Mt. Vernon transloading facility Wide range of…
Reserve Decisions on the Horizon Pittsburgh 8 producers 20 million tons of current capacity will either deplete or require recapitalization by 2020 Substantial portion of those tons serve river markets Tunnel Ridge is well…
Recent Coal Reserve Acquisitions Added 660 million tons to Illinois Basin platform Enhanced reserve platform provides opportunities to - Optimize existing Illinois Basin operations Develop future organic growth projects in…
Excess Capacity Available ARLP can respond rapidly to improved market conditions 55.0 50.0 45.0 Production Tons (Millions) 40.0 35.0 30.0 25.0 20.0 2011 2012 2013 2014 2015 (e) Actual / Projected White Oak Excess…
Alliance Investment Thesis
Why Alliance The MLP Coal Investment leveraging. Clear strategy and focus Sustainable competitive advantages Strategically located operations Low cost producer Strong customer relationships Solid balance sheet Exceptional track…
Loading...
