Master Limited Partnership Association Investor Conference June 2, 2016 Brian L. Cantrell Chief Financial Officer
Well Positioned Operations in Strategic Coal Basins Business overview Coal operations First and largest publicly traded Pennsylvania master limited partnership involved in production and Illinois Indiana Ohio 9 marketing of coal…
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…
2015 In Review and 2016 Outlook 2016E mm 2015A (Midpoint) Tons Sold 40,247 36,350 Coal Sales Revenue 2,158 1,885 Adjusted EBITDA 747 580 Interest Expense (Gross) 30 34 Net Income 306 266 Maintenance Capex1 204 165 Growth…
Conservative Balance Sheet and Robust Liquidity Low Leverage 1Q2016 Capital Structure 24.0x x TTM Adj 5.9x mm Maturity mm EBITDA 5.6x 700mm revolving credit facility May 2017 450 0.7x Term loan A May 2017 200 0.3x 2.5x 6.72%…
The Alliance Strategy for Success Create Sustainable Growth in Cash Flow and Deliver Consistent Growth in Distributions to ARLP and AHGP Unitholders Focus on Low-cost operations High return organic development projects Disciplined…
Coal Industry Update
Industry Commentary Coal is Here to Stay Near-Term Outlook Stabilizing in Alliances Key Markets Improving Long-Term Fundamentals Current issues Regulatory Impact on Coal Demand Natural Gas Competition 10
Stabilizing Near-Term Markets Source: EIA 2016 Annual Energy Outlook, May 17, 2016 (Reference Case) 11 11
Alliance Markets Remain Resilient Long-Term Source: EIA 2016 Annual Energy Outlook, May 17, 2016 12 12
Coal Market Fundamentals Are Poised to Improve ILB Cost w/Capital - FOB Mine 50.00 Supply Rationalization Will Continue 45.00 Cost structure of higher cost mines is 40.00 unsustainable 35.00 Higher Natural Gas Prices Will Drive…
Coal Dispatch Impacted by Natural Gas Competition Henry Hub Natural Gas Prices 8.00 7.00 6.00 per MMBtu 5.00 4.00 Coal dispatch set to improve in 2017 3.00 2.00 1.00 Current (05/27/16): 2.17 0.00 Jan-11…
Alliance Positioning
ARLP has Proactively Responded to Current Market Conditions. Optimized Operations Adjusted production in response to market conditions Shifting production to lowest cost mines Idled Gibson North and Onton. Elk Creek depleted 1Q2016…
ARLP has Proactively Responded to Current Market Conditions Adjusted unitholder distributions to annualized 1.75 Preserves approximately 140 million of annual cash flow Used to pay down debt in 2016 Positions distribution for future…
Alliance Is The Coal Industry Leader Delivered Best-in-Sector performance throughout the downturn in the coal industry Profitable Solid cash flows Strong balance sheet Responding to challenging markets Production, operating…
Solid Sales Contract Portfolio Alliance Contracted position as of 1Q2016 2016 Sales Tons Guidance: Committed and priced tons % of 2016E Midpoint tons sold 34.6 38.1 50 95% 100% 40 75% 59% 30 50% 40% 20 35 20% 25% 10…
ILB Excess Capacity Available ARLP can respond rapidly to improved market conditions 45.0 40.0 35.0 ILB Production Tons 30.0 (Millions) 25.0 20.0 15.0 10.0 5.0 0.0 2014 2015 2016 (e) Actual / Projected Incl White…
Alliance Investment Thesis
Why Alliance The MLP Coal Investment leveraging. Clear strategy and focus Sustainable competitive advantages Strategically located operations Low cost producer Profitable with solid cash flows Strong customer relationships Solid…
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