Good day ladies and gentlemen, and welcome to the Q1 2014 Alliance Resource Partners L.P. and Alliance Holdings GP, L.P. Earnings Conference Call. My name is Kim, and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct the question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Brian Cantrell, Senior Vice President and Chief Financial Officer. Please proceed.

Thank you, Kim, and welcome, everyone. Earlier this morning, we released 2014 first quarter earnings for both, Alliance Resource Partners, or ARLP, and Alliance Holdings GP, or AHGP, and we will now discuss those results as well as our outlook for 2014. Following our prepared remarks, we'll open the call to your questions. Before beginning, we remind you that some of our remarks may include forward-looking statements that are subject to a variety of risks, uncertainties and assumptions, which are contained in our filings from time-to-time with the Securities and Exchange Commission, and are also reflected in today's press releases from the partnerships. While these forward-looking statements are based on information currently available to the partnerships and those of the general partners and management, if one or more of these risks or uncertainties materialize or if our underlying assumptions prove incorrect, actual results of the partnerships may vary materially from those we projected or expected. In providing these remarks, neither ARLP nor AHGP has any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Finally, we will also be discussing certain non-GAAP financial measures. Definitions and reconciliations of the differences between these non-GAAP measures and the most directly comparable GAAP financial measures are contained at the end of the ARLP press release, which had been posted on ARLP’s Web site and furnished to the SEC on Form 8-K. Now that we're through the required preliminaries, I'll turn the call over to Joe Craft, our President and Chief Executive Officer. Joe?

Thank you, Brian and good morning everyone. I am pleased to report another strong showing for our partnerships as ARLP and AHGP again posted record results for the first quarter of 2014. Performance at Tunnel Ridge exceeded our expectations and contributed to record coal production at ARLP in the 2014 quarter. Continued focus by all of our mines to operate efficiently and controlled cost helped to drive total operating expenses and segment adjusted EBITDA expense per tonne lower as well. These efforts led to record net income and EBITDA at ARLP and record net income at AHGP. Operationally, we’re encouraged by what we are seeing on the development sections for the next couple of panels at Tunnel Ridge and currently anticipate this mine will continue to deliver strong results going forward. As a result, we have raised our annual production goal for Tunnel Ridge and now expect it to produce approximately 6 million tonnes in 2014. We recently started production at the new Gibson South mine ahead of schedule and increased its targets as well now expecting this mine to produce approximately 700,000 tonnes this year. Our marketing team continued to strengthen ARLP’s coal sales position during the 2014 quarter securing new sales commitments for the delivery of approximately 7.8 million tonnes through 2016. Several coal markets in the U.S. have improved this year, as extreme winter weather and higher natural gas prices significantly impacted utility stock piles in coal fired power generation. We believe that market dynamics point to the potential for increased coal pricing in the second half of 2014 and are optimistic that ARLP’s remaining open coal sales position will be contracted in an improved market environment. With strong performance to start the year, improved market fundamentals for coal and greater than anticipated production growth in 2014 our partnerships are well positioned to deliver a 14th consecutive year of record results. Encouraged by this positive outlook the Alliance Board announced today a two-for-one unit split for ARLP unitholders. The Alliance Board also approved increased unitholder distributions for the 24th consecutive quarter, bringing our year-over-year distribution growth to 8.2% at ARLP and 11.1% at AHGP. At this time I’ll turn the call back to Brian for a more detailed look at our financial results and guidance, after which we will open the call to your questions. Brian?

Thank you, Joe. AHGP and ARLP both started the year with another corporate record financial and operating results. AHGP’s net income rose by 12.4% to a record 67.4 million. The net income per basic and diluted limited partner interest increased 13% to $1.13 per unit, both as compared to the 2013 quarter. At ARLP increased production from the Tunnel Ridge longwall as well as strong performance from Dotiki and MC Mining drove coal production to a record 10.3 million tonnes during the 2014 quarter, an increase of 11.9% and 4.4% compared to the sequential and 2013 quarters respectively. Although production increased total operating cost were held in check during the 2014 quarter, declining 26.3 million compared to the 2013 quarter and by 34.5 million sequentially. Per tonne cost also improved during the 2014 quarter, total segment adjusted EBITDA expense of $33.91 per tonne was lower than expected declining 5.8% compared to the 2013 quarter and 6.5% sequentially. Looking at the top-line, coal sales volumes were affected by transportation disruptions caused by severe winter weather during the 2014 quarter, the resulting delays in coal shipments along with the impact of closing the Pontiki mine late last year, pushed coal sales volumes and revenue slightly lower during the 2014 quarter. As expected on a per tonne basis, total average coal sales prices were comparable to the prior periods. The strong production and cost performance I mentioned earlier more than offset lower revenues however, leading ARLP to post records during the 2014 quarter for EBITDA and net income. EBITDA increased 10% over the 2013 quarter to 190.4 million. Our net income climbed 12.6% to 115.9 million. Before turning to our guidance for the remainder of 2014, I do want to take a moment to discuss our recent change to ARLP’s and AHGP’s segment…

and:

(Operator Instructions) Your first question comes from the line of Jim Rollyson from Raymond James. Please proceed.

Good morning guys. Raymond James: Good morning guys.

Good morning, Jim. How are you?

Great. Sorry you had such a terrible quarter. Congrats on a record quarter, actually. Joe, may be you could spend a minute talking about the kind of environment you’re in right now, when you talk to customers given that we had a nice cold weather and depleted inventory levels of both coal and natural gas? And, just kind of curious what those conversations are like if you’re starting to see a pickup in interest for coal as you head out into the out-years and maybe a little bit of discussion about pricing and just kind of how you see that shaping up? Raymond James: Great. Sorry you had such a terrible quarter. Congrats on a record quarter, actually. Joe, may be you could spend a minute talking about the kind of environment you’re in right now, when you talk to customers given that we had a nice cold weather and depleted inventory levels of both coal and natural gas? And, just kind of curious what those conversations are like if you’re starting to see a pickup in interest for coal as you head out into the out-years and maybe a little bit of discussion about pricing and just kind of how you see that shaping up?

Thank you, Jim. I think the activity in the first quarter was quite significant. And as we indicated by the amount of tonnes we booked that 7.8 it did most of it was in ’14, but we did have a couple of million tonnes in each of ’15 and ’16. And so I think it’s because of the weather and the interruptions in transportation and which it mostly affected PRB, we did see increased demand and we continue to see the evaluation of opportunities in the second half of the year which will roll into ’15 and ’16. Everybody is watching the natural gas curve and which continues to influence some utilities’ willingness to commit because utilities did in fact enter the year a little bit shorter than normal based on a desire to be able to be nimble if you will and depending on where natural gas prices are. But as we look at the gas storage business we look at current demand, gas supply. We think that the markets are pretty much in balance for where we’re positioned and I think that because of where natural gas prices will be over the next couple of years we’re well positioned to compete with our low cost production out of our Northern Appalachia coal mines as well as our Illinois Basin coal mines.

Well certainly the great job will even some coal open for the optionality of that for this year, so a good job there. On Gibson South came up a little bit early I think you guys were expecting 700,000 tonnes this year maybe just remind us when that will get up to normal full run rates and normalize the cost back down and maybe how that -- will that influence your cost overall in the Illinois Basin positively, negatively or above status quo? Raymond James: Well certainly the great job will even some coal open for the optionality of that for this year, so a good job there. On Gibson South came up a little bit early I think you guys were expecting 700,000 tonnes this year maybe just remind us when that will get up to normal full run rates and normalize the cost back down and maybe how that -- will that influence your cost overall in the Illinois Basin positively, negatively or above status quo?

I think the run rate will have to be bringing these units on sequentially, so it would be about second quarter of 2015 before we would be pretty much at full capacity and that’s assuming we go with five units which we designed the mine to do. Whether we go four units, five units we will be dependent on the market but we will see a ramp-up to the middle of next year basically to get an annual run rate of 5.5 million [indiscernible].

Okay. Raymond James: Okay.

On the cost as a result of the start a little earlier it will actually probably increase our cost a little bit in 2014 as we ramp-up and hire more people to bring on those tonnes and by not having the full tonnage allotment our cost would be a little higher in the earlier part of the ramp-up. But then ’15 the cost we will get to full capacity sooner it should have a more balanced benefit to our cost. I think we have mentioned in the past that we think Gibson South’s cost would be comparable to our other Illinois Basin operations on an average basis. I think we’re very encouraged by the coal scene and we’re -- we feel like the opportunities at Gibson South may provide opportunities for lower cost and we anticipated when we made the investment if the conditions can hold to what we’re seeing today, we expect Gibson South to be a very positive contributor to our Company with the life of its coal mine.

And Jim as we look at the remainder of this year because of the dynamics Joe was just outlining in the Illinois Basin we’re currently expecting our segment adjusted EBITDA expense per tonne to be call it 3% to 5% higher than what we experienced last year.

Yes. Okay, that makes sense and then normalized back down next year. Raymond James: Yes. Okay, that makes sense and then normalized back down next year.

Right.

And then last question from me just maybe a status update on White Oak when does that ramp-up when do you actually think you will go from bleeding cash flow there to starting to generate some cash when you get into them paying you back first upfront? Raymond James: And then last question from me just maybe a status update on White Oak when does that ramp-up when do you actually think you will go from bleeding cash flow there to starting to generate some cash when you get into them paying you back first upfront?

And we’re looking at, they are producing development sections today as we speak and I think the anticipation for the longwall start is we would say probably October plus or minus a month is the way its trending currently. And so we will start seeing some cash flow -- we’re seeing some today but we will have our contribution completed by first or second quarter of next year. And therefore we can start seeing the cash flow coming back to us but it won’t become a material amount until the 2016 time period.

And just as a minder the revenue streams that we’re currently receiving are reflected in our other revenue line item so just the a bit of an uptick there this quarter and that’s one of the drivers.

Makes sense, thanks guys. Raymond James: Makes sense, thanks guys.

Thanks Jim.

Your next question comes from the line of Mark Levin from BB&T Capital Markets. Please proceed.

Hey guys, first question has to do with the disk or the relative evaluation of Alliance Resource Partners and GP. If you look at the yields there almost on top of one another and given how much faster I guess or much more leverage AHGP has. I am just curios I guess you guys referenced it the last call, but what’s you’re thinking about that and maybe what are some of the steps you could do to make that equity trade a little bit more rationally? BB&T Capital Markets: Hey guys, first question has to do with the disk or the relative evaluation of Alliance Resource Partners and GP. If you look at the yields there almost on top of one another and given how much faster I guess or much more leverage AHGP has. I am just curios I guess you guys referenced it the last call, but what’s you’re thinking about that and maybe what are some of the steps you could do to make that equity trade a little bit more rationally?

Well I think what we’ve seen most recently is a differential of maybe 50 basis points where historically it’s been closer to 100, maybe 90 to 100. As we’ve looked at our different alternatives, we continue to believe we’re going to have to do a better job of communicating our story because you understand that leverage is based on the way you ask the question, but maybe we’ve got to do a better job of communicating to all investors the math behind the growth between ARLP and AHGP. So as we look at our presentations on a going forward basis, we’re going to try to make sure people understand that value proposition at AHGP as we continue to have these record results at ARLP and that growth as will flow through on to the benefit of AHGP. So communication and better explaining with more emphasis on AHGP’s results is one thing that we’re committed to do. Secondly I think one question we keep looking at is just liquidity and so we’re trying to think of ways so we could improve that liquidity, but that’s a challenge in itself. So right now our focus is trying to get our story pretty much focused on how the ARLP growth translates into the leverage and the growth at AHGP, because it is a faster growing performance because of the way the 90 hours are structured.

Got it, got it got it. And then the second question on pricing obviously you guys put a lot of tonnes to bed and specifically in ’14 this year a little bit in ’15. I realize you guys don’t give realized pricing but are we looking at an Illinois Basin market today Joe that is up versus where it was three months ago, flat with where it was three months ago -- I mean how do you sort of characterize the pricing trends in the Basin these days? BB&T Capital Markets: Got it, got it got it. And then the second question on pricing obviously you guys put a lot of tonnes to bed and specifically in ’14 this year a little bit in ’15. I realize you guys don’t give realized pricing but are we looking at an Illinois Basin market today Joe that is up versus where it was three months ago, flat with where it was three months ago -- I mean how do you sort of characterize the pricing trends in the Basin these days?

Well it depends on really the size of the orders you’re talking about, but I would say based on what we just contracted they were slightly ahead of say 2013 pricing but not significantly. So if we look at year-over-year if you look at our Illinois Basin price, average price positions that we put to bed were somewhere between 10%-15% below that. But when you factor in renegotiations of some below market contracts that allows us to keep our average sales price pretty much consistent year-to-year.

Got it. And is your expectation Joe if the summer kind of, I mean obviously inventories have been drawn down probably a little bit more in the PRB in that but if we have a normal summer, I mean are we at a point now where we can start seeing prices move or converse because the export market is so weak and I guess you have got White Oak ramping and Foresight ramping. I mean are those constraining factors, how do you kind of look at pricing in a normal summer scenario given some of the incremental tonnes that are coming on line? BB&T Capital Markets: Got it. And is your expectation Joe if the summer kind of, I mean obviously inventories have been drawn down probably a little bit more in the PRB in that but if we have a normal summer, I mean are we at a point now where we can start seeing prices move or converse because the export market is so weak and I guess you have got White Oak ramping and Foresight ramping. I mean are those constraining factors, how do you kind of look at pricing in a normal summer scenario given some of the incremental tonnes that are coming on line?

I think as we look at the normal summer I mean as we factor in the balance of the year, and factoring in a normal summer we think that Illinois Basin demand increased about 9.5 million tonnes in 2014 as a result of the winter weather we had and the drawdown of inventories. We think Northern App increased another 3.5 million. We believe that if you look at production through the first quarter it’s still behind what 2013 was. So we believe that currently production is falling short of demand. Now with the adds at White Oak and Foresight as well as our own Gibson South, we think it’s still within balance, so we don’t see an oversupply based off of current investments that are out there, don’t know that there is room for much more investment. But I think that we would expect prices to be higher in the back half of the year than the first half of the year due to the supply demand balance, because you still have some Central App switching going on as well as even some Southern App switching going on, so we believe the demand picture for Illinois Basin and Northern App will require the investments that are being made or have been made in the Illinois Basin and what we see in Northern App so the caveats are weather and the export market we’re not projecting a bullish export market but there are some export tonnes in that forecast. So, I would say the one thing that could disrupt that view is that the market and the weather is normal, if you will, and then the other could be gas prices but I think that’s a low risk given where gas prices are today and given this low level of inventory and gas storage, so.

No, all that makes sense one last question guys more of an accounting question or a guidance question, I think Brian you guys have been guiding to down 9% to 10% in cost for Northern App now you’ve combined the operations. How should we think about just cost per tonne guidance now that you have sort of blended the operations for ’14 and then ’15 would you kind of go back to sort of an inflationary growth type number or think about it otherwise? BB&T Capital Markets: No, all that makes sense one last question guys more of an accounting question or a guidance question, I think Brian you guys have been guiding to down 9% to 10% in cost for Northern App now you’ve combined the operations. How should we think about just cost per tonne guidance now that you have sort of blended the operations for ’14 and then ’15 would you kind of go back to sort of an inflationary growth type number or think about it otherwise?

Good question. And by combining all of our Eastern operations into a single segment, performance at Tunnel Ridge is better than we expected coming into the year and obviously we have also with the closure of Pontiki which was a higher cost operation combining those two we’re currently looking at cost being call it 10% to 15% lower this year than they were last year so hopefully that’s also Mark.

No it’s perfect, I appreciate. Thank you, guys. BB&T Capital Markets: No it’s perfect, I appreciate. Thank you, guys.

Hold on.

And I think next year you would love the inflationary as it gets based.

Okay, great. Thanks very much. BB&T Capital Markets: Okay, great. Thanks very much.

Thanks Mark.

(Operator Instructions) Your next question comes from the line of Paul Forward from Stifel. Please proceed.

Thanks. Good morning. Stifel, Nicolaus & Company: Thanks. Good morning.

Good morning Paul.

Brian I wanted to ask you about I think you’d mentioned in your prepared remarks some anticipation that these rail congestion issues potentially would continue, there would be an impact as the year goes along. So just wondering if I could ask you to -- could you quantify is there a potentially a number that if you add it up the whole year or is that going to be 0.5 million, a 1 million loss tonnes or something in that ballpark? And then maybe secondarily, can you give a little sense of just provide some color on what kind of issues you’re seeing right now and has it improved at all over the past month or two? Stifel, Nicolaus & Company: Brian I wanted to ask you about I think you’d mentioned in your prepared remarks some anticipation that these rail congestion issues potentially would continue, there would be an impact as the year goes along. So just wondering if I could ask you to -- could you quantify is there a potentially a number that if you add it up the whole year or is that going to be 0.5 million, a 1 million loss tonnes or something in that ballpark? And then maybe secondarily, can you give a little sense of just provide some color on what kind of issues you’re seeing right now and has it improved at all over the past month or two?

Sure, I’ll try to take those on as you asked obviously you saw our inventory build this year, or this quarter. We ended the year with inventories down in the 340 million or 340,000 tonne range and we ended this quarter at a little over 1.1 million tonnes. We expect by year-end that we will get back to our more historical levels that are in the 400,000 to 500,000 tonne range. So, again the issue that we have is we have the fall this quarter but we do expect those to be made up over the balance of the year the precise timing as to when that will occur is basically not particularly clear at the moment. I think much of the issue that we have on the rail side with bottlenecks in Chicago those are beginning to work themselves out. And I believe the rails are making significant efforts to try to clear up those bottlenecks but it’s just going to take some time to work its way through the system.

And as far as amount I think based on what our expectations were, we’re about 500,000 tonnes that were impacted in the first quarter of that 750,000 tonnes they will be anticipated in some of that build.

Right.

But, about 0.5 million tonnes are related to transportation interruptions.

Right and so then as we work our way through the year those 0.5 million tonnes that are currently delayed will get pushed through the system and would bring our inventories back down to more historic levels.

Great, and just related to that we’ve definitely heard some stories about some PRBs and power plants operating at very low inventories any kind of anecdotal information you could provide on the Illinois Basin, are there any plans among your customer base that are feeling the squeeze of these rail issues and that’s showing up in the inventories? Stifel, Nicolaus & Company: Great, and just related to that we’ve definitely heard some stories about some PRBs and power plants operating at very low inventories any kind of anecdotal information you could provide on the Illinois Basin, are there any plans among your customer base that are feeling the squeeze of these rail issues and that’s showing up in the inventories?

No, we don’t really see that in the Illinois Basin I think the inventories in the Illinois Basin are close to normal so they’re not at the low-end of the say the five year average. But Northern App we think is lower than what the average has been. A couple of customers need tonnes in the first quarter. But I think the issue that’s gotten a lot of dialogue has been more of a PRB issue than it’s been in a Illinois Basin or Central App, Northern App issue.

Okay. Thanks. And you’ve got well congratulations on the Gibson South, kind of early ramp-up there. Looking out, say looking at a year from now, you’ll have your major projects mostly done. I was just curious, if you could talk about following the completion of Gibson South and White Oak, what do you see as your most attractive growth projects internally and could you talk a little bit about, as you think about growing beyond 2015, your inclination to grow internally or to look for acquisitions for future growth? Stifel, Nicolaus & Company: Okay. Thanks. And you’ve got well congratulations on the Gibson South, kind of early ramp-up there. Looking out, say looking at a year from now, you’ll have your major projects mostly done. I was just curious, if you could talk about following the completion of Gibson South and White Oak, what do you see as your most attractive growth projects internally and could you talk a little bit about, as you think about growing beyond 2015, your inclination to grow internally or to look for acquisitions for future growth?

I think we do have some opportunities. We’re trying to evaluate the benefits of Penn Ridge, what the Northern App markets would be. We’re going to have to continue to just evaluate that to see what supply demand logistics look for Northern App. In Illinois Basin, we’ve got a couple of projects that we’re evaluating I think most of those who are really going to have to be dependent on the export market and/or what our competitors do with relative to -- now, whether they continue to stay in the market or whether they decide to close shop. Because with the power plants being closed because of the Mercury Rule we anticipate the demand is going to be relatively flat, over that time period. So we will have growth through ’16. And so the real focus point is ’17, because of the benefits at White Oak starting to provide growth through ’16. So I think we’ve gotten visibility through ’16. But in ’17 we are evaluating what our next move is to continue our record production growth. With winter and there’s a lot of discussion now because some of the plants that are being scheduled to be closed are being utilized or were being utilized in the first quarter. There has been a lot more conversation in Washington DC. About whether or not, we’re going to have the reliability that this country demands for power. Second piece of the puzzle is, even if those utilities do shut those plants down there is an expectation that the plants that remain, will have higher utilization. And when we have looked at our supply demand forecast, we have not factored that increased utilization in our supply demand, so when I give you my -- the way you’ve -- where the markets are supply and demand driven, they pretty much anticipate utilization of existing plants at historical levels and normal weather. The other piece to the puzzle is it gives the export market, we know there are a lot of coal plants being built in the world and anticipation for another 700 million tonnes of demand in the world economy. Now what happens in Europe? What happens in Ukraine? What happens in China? All that will have to be evaluated to determine where growth opportunities -- where we want to put some capital for future growth opportunities. But we’re continued to be focused on delivering production growth which has been delivered our ability to grow our cash flows and grow our distributions. But that’s what we are focused on at the moment to try to respond to your question.

Great. Thanks. I appreciate it. Stifel, Nicolaus & Company: Great. Thanks. I appreciate it.

Your next question comes from the line of Sam Dubinsky from Wells Fargo. Please proceed.

Hey, guys. Thanks for taking my question and congrats on a good quarter. It seems like there is light here in the tunnel after a few challenging years for coal, at what point do you think it makes sense to increase the rate of your distribution at ARLP? Wells Fargo Securities: Hey, guys. Thanks for taking my question and congrats on a good quarter. It seems like there is light here in the tunnel after a few challenging years for coal, at what point do you think it makes sense to increase the rate of your distribution at ARLP?

I didn’t understand the first part of your question?

It seems like things are getting incrementally better for you, at what point do you think it makes sense to increase the rate of distribution? Wells Fargo Securities: It seems like things are getting incrementally better for you, at what point do you think it makes sense to increase the rate of distribution?

We don’t -- I don’t anticipate we do that obviously that’s a Board decision, but as we’ve talked about our rate of growth, we’re comfortable with the rate of growth that we’ve experienced in the last 24 quarters. And I think it will be more or less in there. I am expecting it will maintain at that rate and for the foreseeable future. Once we get better clarity on whether utilities will continue to go short or go long, that could help us revisit that question, but in the current environment the utilities are going to stay short, and there’s not more commitment to our tonnes I don’t anticipate that we’ll see that change.

Okay. And then your Appalachia pricing I believe was up about 4% quarter-over-quarter I think driven by higher contract pricing in Mettiki was that just a function of that being a low price contract? Wells Fargo Securities: Okay. And then your Appalachia pricing I believe was up about 4% quarter-over-quarter I think driven by higher contract pricing in Mettiki was that just a function of that being a low price contract?

Yes.

Okay. And what percentage of your contracts are below where you’re pricing today and what percent are above if you can give some color on that? Wells Fargo Securities: Okay. And what percentage of your contracts are below where you’re pricing today and what percent are above if you can give some color on that?

I don’t know I don’t have that handy, I am sorry.

Okay. Maybe we’ll chat off line. Thank you very much, and congrats again there. Wells Fargo Securities: Okay. Maybe we’ll chat off line. Thank you very much, and congrats again there.

Thanks Sam.

And this concludes our question-and-answer session. I will now turn the call back to Mr. Brian Cantrell.

Thanks Kim. Good question and dialog this morning, and we appreciate everybody’s time as well as your continued support and interest in both ARLP and AHGP. Our next call is currently scheduled for late July and we look forward to discussing our mid-year results with you at that time. Thanks very much.