Alliance Resource Partners, L.p. · NASDAQ:ARLP
Alliance Resource Partners, L.p — Wachovia Capital Markets Pipeline & MLP Symposium 2008
17 slides from Alliance Resource Partners, L.p's conference presentation, Dec 9, 2008
Slide 1: Alliance Resource Partners / Alliance Holdings GP – Wachovia Pipeline & MLP Symposium
Alliance Resource Partners, L.P. Alliance Holdings GP, L.P. Wachovia Capital Markets Pipeline & MLP Symposium December 9, 2008 Exhibit 99.2
Slide 2: Forward-Looking Statements
2 This presentation contains forward-looking statements and information that are based on the beliefs of Alliance Resource Partners, L.P. and Alliance Holdings GP, L.P. (the “Partnerships”) and those of their respective general partners (the “General Partners”), as well as assumptions made by and in
Slide 3: Outlook for coal
Outlook for coal
Slide 4: Macro Coal Dynamics
Liquidity Crunch Hedge fund deleveraging Financial coal traders exiting the market Reduced capital availability Instinct to preserve capital countered by…. Anticipated 2009-2010 cash flow surge Alternative energy investments Demand Destruction China, India and global economic slowdown Domestic energ
Slide 5: Macro Coal Dynamics: Obama and a Democratic Congress
Obama and a Democratic Congress Positives Acknowledged importance of Coal Generates ~50% of U.S. electricity 1 Employees hundreds of thousand of Americans Provides millions in tax revenues to coal states America’s most abundant low-cost fuel source Economic stimulus & commitment to U.S. jobs Infrast
Slide 6: Domestic Coal Supply Outlook
Short Term Supply – Will Be Lower Reduced investment capital & credit capacity Lack of equipment availability MSHA – productivity declines Permitting delays and litigation Labor shortages are still a factor High cost operations at risk International production constraints continue 6 Long Term Supply
Slide 7: Domestic Coal Demand Outlook: Short Term
Short Term Demand – Lower Due to Worldwide Economic Downturn Met market Steel production cuts Coal prices – U.S. vs. Australian production U.S. currency value PCI market Steam coal Natural gas competition Stockpiles are normal? 7 Domestic Coal Demand Outlook Domestic Coal Demand Outlook
Slide 8: Domestic Coal Demand Outlook: Long Term
8 Long Term Demand Positives 29 new U.S. coal-fired power plants (16.5GW) under construction Plug-in Hybrids Economic stimulus programs – U.S. $700B / China $300B Met market will return U.S. currency will reverse BTU conversion – coal to gas / liquids Clean coal technology Negatives Climate change R
Slide 9: Summary – Domestic Coal Outlook
9 Summary – Summary – Domestic Coal Outlook Domestic Coal Outlook Despite challenges…. Coal has been and is best positioned to remain the Cornerstone of America’s Electric Energy Future
Slide 10: Outlook for Alliance
Outlook for Alliance
Slide 11: Alliance Snapshot
Fifth largest coal producer in the eastern United States Eight underground mining complexes in all major eastern coal producing regions Four significant organic development projects in the growing Illinois Basin and Northern Appalachia coal markets Marketable coal reserves of ~ 713 million tons at 1
Slide 12: Consistent Track Record of Distribution Growth
ARLP has increased distributions 40% since June 2006 AHGP has increased distributions 81% since June 2006 Source: Public filings 12 $2.24 $2.34 $2.34 $2.64 $2.80 $2.00 $2.16 $2.16 $2.24 $1.25 $1.50 $1.75 $2.00 $2.25 $2.50 $2.75 $3.00 $1.06 $1.15 $1.15 $1.41 $1.56 $0.86 $1.00 $1.00 $1.06 $0.25 $0.50
Slide 13: Strong Realized Coal Price Growth
$20.00 $30.00 $40.00 $50.00 $60.00 2008(e) 2009(e) 2010(e) ` $59.72 $55.74 $53.74 $49.76 $39.81 Committed and priced coal sales 2009 ~ 90% 2010 ~ 80% Executed agreements during 2008Q3 for 22.9 million tons Terms up to 10 years Prices 65% above historical levels 13 Strong Realized Coal Price Growth S
Slide 14: Alliance's Long Term Growth Strategy
Capitalize on the expected strong demand growth in scrubber quality coal Continue to be a disciplined producer - project developments tied to sales commitments Continuous focus on safety and operational optimization Pursue opportunistic acquisitions 14 Alliance’s Long Term Growth Strategy Alliance’s
Slide 15: Organic Growth Projects
Permitting in progress Estimated capital cost ~ $265 – $285 million Estimated reserves ~ 70 million tons high sulfur coal Production capacity ~ 6 million tons/year Initial production in 2010Q4 Initiating permitting process Estimated capital cost ~ $165 – $175 million Estimated reserves ~ 57 million
Slide 16: Strong Balance Sheet
16 2003YE 2004YE 2005YE 2006YE 2007YE 92.1% 64.3% 34.1% 30.1% 32.5% Source: Public filings 24.1% 2008Q3 $350 million private placement of Senior Notes completed 06/26/08 $205 million at 6.28% due 2015 $145 million at 6.72% due 2018 Existing $150 million revolving credit facility expires in 2012 Liqu
Slide 17: Alliance Resource Partners / Alliance Holdings GP
Alliance Resource Partners, L.P. Alliance Holdings GP, L.P. Wachovia Capital Markets Pipeline & MLP Symposium December 9, 2008
Alliance Resource Partners — Wachovia Capital Markets Pipeline & MLP Symposium 2008 on 6ix