Alliance Holdings GP, L.P. Reports Quarterly Financial Results; Increases Quarterly Distribution by 1.0% to $0.7425 Per Unit; and Announces Intent to Simplify Structure

January 29, 2018

TULSA, Okla.–(BUSINESS WIRE)–Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported financial
results for the quarter and year ended December 31, 2017 (the "2017
Quarter" and the "2017 Year", respectively). As previously announced,
the Board of Directors of its general partner (the "Board") approved a
distribution to unitholders of $0.7425 per unit (an annualized rate of
$2.97 per unit) for the 2017 Quarter, payable on February 20, 2018 to
AHGP unitholders of record as of the close of trading on February 13,
2018. The announced distribution represents a 35.0% increase over the
cash distribution of $0.55 for the quarter ended December 31, 2016 and a
1.0% increase over the cash distribution of $0.735 for the quarter ended
September 30, 2017 (the “Sequential Quarter”).

AHGP's principal sources of cash flow are its ownership interests 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 previously announced a quarterly
distribution for the 2017 Quarter of $0.51 per unit, or $2.04 per unit
on an annualized basis, payable on February 14, 2018 to all unitholders
of record as of the close of trading on February 7, 2018. (See ARLP
Press Release dated January 26, 2018.)

AHGP also reported net income attributable to AHGP for the 2017 Quarter
of $49.3 million, or $0.82 per basic and diluted limited partner
interest, a decrease of 19.4% compared to net income attributable to
AHGP for the 2016 Quarter of $61.2 million, or $1.02 per basic and
diluted limited partner unit. Net income attributable to AHGP for the
2017 Quarter increased approximately 26.1% compared to net income
attributable to AHGP for the Sequential Quarter of $39.1 million, or
$0.65 per basic and diluted limited partner unit. For the year ended
December 31, 2017, AHGP reported net income of $186.0 million, or $3.11
per basic and diluted limited partner unit, which is consistent with the
year ended December 31, 2016.

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. The consolidated
net income of AHGP includes earnings and losses attributable to both
AHGP and noncontrolling interests.

AHGP also announced it intends to move forward with a structural
simplification of the Alliance Partnerships, as initially discussed last
July when AHGP exchanged its incentive distribution rights in ARLP for
common units in ARLP. (Please see Press Release dated July 28, 2017.) At
that time, we indicated further evaluation of our structural
alternatives and the potential outcome of tax reform proposals then
under consideration was appropriate before determining whether further
simplification of the Alliance Partnerships should proceed. Now that our
structural evaluations are complete and tax reform has been clarified,
management has recommended to the Board that further streamlining the
Alliance Partnerships’ structure into a single reporting and trading
entity should be pursued. We currently anticipate simplification would
be principally accomplished through a distribution of ARLP common units
held by AHGP to the AHGP unitholders. While the final form of this
simplification is being refined, AHGP expects to complete this process
in 2018 and will provide additional information once a final structure
is approved.

A joint conference call regarding AHGP and ARLP’s 2017 Quarter and 2017
Year financial results is scheduled for today at 10:00 a.m. Eastern. To
participate in the conference call, dial (877) 317-6016 and request to
be connected to the Alliance Resource Partners, L.P. and Alliance
Holdings GP, L.P. earnings conference call. Canadian callers should dial
(855) 669-9657 and all other International callers should dial (412)
317-6016 and request to be connected to the same call. 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 US Toll Free
(877) 344-7529; International Toll (412) 317-0088; Canada Toll Free
(855) 669-9658 and request to be connected to replay access code
10115818.

About Alliance Holdings GP, L.P.

AHGP is a limited partnership formed to own and control ARLP's general
partner through which it holds a non-economic general partner interest
in ARLP and an approximate one percent general partner interest in
ARLP's operating subsidiary, Alliance Resource Operating Partners, L.P.
In addition, AHGP owns 87,188,338 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 [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
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 ability of
ARLP and its consolidated subsidiaries (the "ARLP Partnership") 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 expansion of the ARLP Partnership's operations and properties;
legislation, regulations, and court decisions and interpretations
thereof, including those relating to the environment and the release of
greenhouse gases, 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 existing contracts upon expiration;
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; continuation or worsening of depressed
oil and gas prices adversely affecting the ARLP Partnership’s
investments in oil and gas mineral interests and midstream services; 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, including costs
of health insurance and taxes resulting from the Affordable Care Act,
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 post-mine reclamation as
well as 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 investments in companies the
ARLP Partnership does 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, 2016, filed on February 24, 2017 and AHGP's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017,
June 30, 2017, and September 30, 2017 filed on May 8, 2017, August 4,
2017, and November 6, 2017, 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,
2017	2016	2017	2016
SALES AND OPERATING REVENUES:
Coal sales	$	454,946	$	504,210	$	1,711,114	$	1,861,788
Transportation revenues	16,767	10,379	41,700	30,111
Other sales and operating revenues	11,417	12,702	43,027	39,124
Total revenues	483,130	527,291	1,795,841	1,931,023
EXPENSES:
Operating expenses (excluding depreciation, depletion and amortization)	298,322	282,431	1,095,167	1,124,848
Transportation expenses	16,767	10,379	41,700	30,111
Outside coal purchases	—	—	—	1,514
General and administrative	16,171	19,912	63,331	75,087
Depreciation, depletion and amortization	74,872	90,773	268,981	336,509
Total operating expenses	406,132	403,495	1,469,179	1,568,069
INCOME FROM OPERATIONS	76,998	123,796	326,662	362,954
Interest expense, net	(10,481	)	(7,283	)	(39,385	)	(30,669	)
Interest income	15	3	102	14
Equity investment income	3,446	2,502	13,860	3,543
Cost investment income	3,598	—	6,398	—
Debt extinguishment loss	—	—	(8,148	)	—
Other income	519	180	2,980	725
INCOME BEFORE INCOME TAXES	74,095	119,198	302,469	336,567
INCOME TAX EXPENSE	214	10	211	14
NET INCOME	73,881	119,188	302,258	336,553
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	(24,609	)	(57,976	)	(116,270	)	(150,619	)
NET INCOME ATTRIBUTABLE TO ALLIANCE HOLDINGS GP, L.P. ("NET INCOME OF AHGP")	$	49,272	$	61,212	$	185,988	$	185,934
BASIC AND DILUTED NET INCOME OF AHGP PER LIMITED PARTNER UNIT	$	0.82	$	1.02	$	3.11	$	3.11
DISTRIBUTIONS PAID PER LIMITED PARTNER UNIT	$	0.7350	$	0.5500	$	2.5650	$	2.6100
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,
2017	2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	8,643	$	44,525
Trade receivables	181,671	152,032
Other receivables	146	279
Due from affiliates	25	37
Inventories, net	60,275	61,051
Advance royalties, net	4,510	1,207
Prepaid expenses and other assets	28,192	22,128
Total current assets	283,462	281,259
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost	2,934,188	2,920,988
Less accumulated depreciation, depletion and amortization	(1,457,532	)	(1,335,145	)
Total property, plant and equipment, net	1,476,656	1,585,843
OTHER ASSETS:
Advance royalties, net	39,660	29,372
Equity investments	147,964	138,817
Cost investments	106,398	—
Goodwill	136,399	136,399
Other long-term assets	30,712	25,997
Total other assets	461,133	330,585
TOTAL ASSETS	$	2,221,251	$	2,197,687
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable	$	97,371	$	64,460
Due to affiliates	771	906
Accrued taxes other than income taxes	20,366	18,288
Accrued payroll and related expenses	35,801	41,576
Accrued interest	5,005	316
Workers' compensation and pneumoconiosis benefits	10,729	9,897
Current capital lease obligations	28,613	27,196
Other current liabilities	19,071	14,778
Current maturities, long-term debt, net	72,400	149,874
Total current liabilities	290,127	327,291
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities, net	415,937	399,446
Pneumoconiosis benefits	71,875	62,822
Accrued pension benefit	45,317	42,070
Workers' compensation	46,694	40,400
Asset retirement obligations	126,750	125,266
Long-term capital lease obligations	57,091	85,540
Other liabilities	14,587	17,203
Total long-term liabilities	778,251	772,747
Total liabilities	1,068,378	1,100,038
PARTNERS’ CAPITAL:
Alliance Holdings GP, L.P. ("AHGP") Partners' Capital:
Limited Partners – Common Unitholders 59,863,000 units outstanding	626,831	598,077
Accumulated other comprehensive loss	(34,820	)	(16,550	)
Total AHGP Partners' Capital	592,011	581,527
Noncontrolling interests	560,862	516,122
Total Partners’ Capital	1,152,873	1,097,649
TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$	2,221,251	$	2,197,687

ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended December 31,
2017	2016
CASH FLOWS FROM OPERATING ACTIVITIES:	$	554,082	$	700,725
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures	(145,088	)	(91,056	)
Increase (decrease) in accounts payable and accrued liabilities	7,404	(4,402	)
Proceeds from sale of property, plant and equipment	2,139	1,165
Contributions to equity investments	(20,688	)	(76,797	)
Purchase of cost investment	(100,000	)	—
Distributions received from investments in excess of cumulative earnings	11,462	3,313
Payment for acquisition of business	—	(1,011	)
Payment for acquisition of customer contracts	—	(23,000	)
Net cash used in investing activities	(244,771	)	(191,788	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under securitization facility	100,000	44,600
Payments under securitization facility	(127,600	)	(27,700	)
Payments on term loan	(50,000	)	(156,250	)
Borrowings under revolving credit facilities	215,486	140,000
Payments under revolving credit facilities	(440,486	)	(270,000	)
Borrowings under long-term debt	400,000	—
Payment on long-term debt	(145,000	)	—
Proceeds on capital lease transactions	—	33,881
Payments on capital lease obligations	(27,071	)	(24,456	)
Payment of debt issuance costs	(16,487	)	(101	)
Payment for debt extinguishment	(8,148	)	—
Contributions to consolidated company from affiliate noncontrolling interest	251	3,014
Net settlement of employee withholding taxes on vesting of ARLP Long-Term Incentive Plan	(2,988	)	(1,336	)
Contribution by limited partner – affiliate	1,000	1,000
Distributions paid by consolidated partnership to non-affiliate non-controlling interest and unissued LTIP participants	(84,973	)	(89,311	)
Distributions paid to Partners	(153,549	)	(156,242	)
Other	(5,628	)	(189	)
Net cash used in financing activities	(345,193	)	(503,090	)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(35,882	)	5,847
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	44,525	38,678
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	8,643	$	44,525