Wells Fargo Securities

MLP & Pipeline Symposium

December 8, 2009

Brian L. Cantrell
Chief Financial Officer
Forward-Looking Statements

This presentation contains forward-

forward-looking statements and information that are based on
the beliefs of Alliance Resource Partners, L.P. and Alliance Holdings
Holdings GP, L.P. (the
“Partnerships”
Partnerships”) and those of their respective general partners (the “General Partners”
Partners”), as
well as assumptions made by and information currently available to them. When used in
this presentation, words such as “anticipate,”
anticipate,” “project,”
project,” “expect,”
expect,” “plan,”
plan,” “goal,”
goal,” “forecast,”
forecast,”
“intend,”
intend,” “could,”
could,” “believe,”
believe,” “may,”
may,” and similar expressions and statements regarding the
plans and objectives of the Partnerships for future operations, are intended to identify
forward-
forward-looking statements.
Although the Partnerships and their General Partners believe that
that such expectations
reflected in such forward-
forward-looking statements are reasonable at the time such statements are
are
made, neither the Partnerships nor the General Partners can give
give assurances that such
expectations will prove to be correct. Such statements are subject
subject to a variety of risks,
uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or
if underlying assumptions prove incorrect, actual results may vary
vary materially from those the
Partnerships anticipated, estimated, projected or expected.

The Partnerships have no obligation to publicly update or revise any forward-

forward-looking
statement, whether as a result of new information, future events or otherwise.

2
Why Coal?

„ Drives Economic Growth

„ Abundant

„ Reliable

„ Affordable

„ Domestic

3
 Coal Consumption Grows with GDP

Coal Consumption GDP

12000
Annual Coal Consumption (Million Short Tons)

1000
10000

800
8000

Billions of Dollars
600
6000

400 4000

200 2000

0 0
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004

1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
Source: EIA, Bureau of Economic Analysis (BEA)

4
Coal Creates High-Paying Jobs

How Many People are

directly employed in the coal
industry?
„ ~ 134,000

What is the average annual

wage in the coal industry?
„ Over $72,000

Source: National Mining Association

5
 Coal Serves as the Cornerstone for
America’s Electricity Generation

U.S. Total Electricity Generation by Fuel

Coal is the backbone of
2% electricity generation in the
1% United States & the reasons are
6% simple ~ Coal is by far the most
Coal abundant and least expensive
Hydro fossil fuel in the country
20% Wind
49% Other
Nuclear Cost in $ per mmbtu
Oil Fuel Type 1993 1998 2003 2008
21% Natural Gas
Coal $1.39 $1.25 $1.28 $2.07
1% Natural
Gas $2.56 $2.38 $5.39 $9.11
Oil $2.43 $2.14 $4.94 $15.50

Sources: EIA 2008 Annual Energy Review; Barclays Capital Markets Research

6
 Coal is Abundant

Western Bit Powder River Northern

Basin (PRB) Lignite Illinois Basin
Region (ILB)

Coal is the
foundation of Northern
America’s Appalachia
Region
energy (NAPP)
security ~
accounting for
93% of fossil
fuel reserves in Central
the U.S. & 27% Appalachia
Region (CAPP)
of worldwide
coal reserves
Southern
Appalachia
Region (SAPP)
Four Corners
Anthracite
Bituminous Coal Gulf Lignite

Subbituminous Coal
Lignite

Source: Energy Information Agency; BP Statistical Study 2009

7
 Coal is Reliable

$ per mmBtu

$20

$16
The delivered
cost of coal is
$12 consistently less
than that of other
fossil fuels
$8

$4

$0
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009YTD

Coal Oil Natural Gas

Sources: Energy Information Agency; Barclays Capital Markets Research

Research

8
 Coal is Affordable and Results in Lower
Electricity Costs to Consumers

6.7¢
8% 7.4¢
6.6¢
62%
91%
7.3¢ 7.8¢ 16.7¢
5.7¢ 60% 9.0¢
7% 7.1¢ 14%
1% 66% 9.2¢
52%
5.7¢ 61% 9.4¢
94% 7.0¢ 53%
6.5¢ 8.4¢
77%
9.9¢ 66% 9.2¢ 7.1¢ 85%
5.6¢
22% 6.5¢ 48% 95%
98% 8.1¢
82% 8.6¢ 7.6¢ 6.9¢ 44%
13.0¢
65% 73% 81% 6.3¢ 94%
1% 8.1¢
61%
8.0¢ 63%
8.0¢ 7.9¢ MA 16.2¢ 25%
9.1¢ 7.8¢
8.3¢ 48% 41% CT 17.0¢ 15%
37% 47%
¢ = average retail price 74% 8.6¢ 9.0¢ NH 14.6¢ 15%
8.9¢
per kilowatt hour 51% 63%
35% RI 16.1¢ 0%
for CY 2008 10.9¢ 9.4¢ NJ 14.9¢ 15%
37% 26% VT 12.3¢ 0%
% = percent of total 10.8¢
14.5¢ 30% MD 13.0¢ 58%
generation from coal
10% DE 12.3¢ 70%
for CY 2008
29.2¢ < 9.5¢
15%
> 9.5¢
Hydro

9
 Coal Drives Economic Growth
¾ November 3, 2009: Warren Buffett
announced Berkshire Hathaway, Inc.’s
Purchase of Burlington Northern Santa Fe
Corp. for $44 Billion

¾ Coal accounted for almost half the

tonnage moved by BNSF in the first nine
months of 2009

“It’s an all-in wager on the economic

future of the United States.”
- Warren Buffett, Berkshire Hathaway, Inc.

Source: Reuters
10
 Coal is the World’s Fastest Growing Fuel

Five-year change in global energy consumption (2003 – 2008)

Nuclear 4% CAGR
Coal demand expected to
0.7%
exceed growth in natural
gas, nuclear, hydro, wind,
Oil 7%
and solar combined
1.3%
through 2025(1)

Natural Gas 16%

3.1%

Hy dro 20%
3.8%

Coal 27 % 4.9%

0 5 10 15 20 25 30

Source: BP Statistical Review of World Energy, June 2009.

Figures represent change from 2003 to 2008.
(1) International Energy Agency, World Energy Outlook 2008. 11
 Coal Provides Developing Nations A Path To
Prosperity

Electricity Usage Per Capita Passenger Vehicles / 1,000 People

15,000 800
U.S.
U.S.

12,000 Australia Australia

Kilowatt-Hours Per Capita

600

Cars per 1,000 People

Italy

9,000
U.K.
S. Korea
Saudi Arabia 400
U.K. Saudi Arabia
6,000 Russia Italy
S. Korea
200
3,000 Russia
Brazil
Mexico Brazil Mexico
China
India India China
0 0
$0 $10,00 $20,00 $30,00 $40,00 $50,00 $0 $10,000 $20,000 $30,000 $40,000 $50,000
0 0 0 0 0

GDP Per Capita (in $U.S.) GDP Per Capita (in $U.S.)

Sources: World Bank (2208); United Nations Human Development

Report 2007/2008; and United Nations World Statistic Pocketbook
and Statistical Yearbook
12
 Outlook for Coal

„ Main fuel source for electricity generation

„ Global demand outpaces other energy sources

„ U.S. demand slowed due to downturn,

growth expected to rebound with recovery

„ Illinois Basin and Powder River Basin will

gain market share, Northern Appalachia will hold
steady, Central Appalachia will retreat

13
Investing in Alliance
 Why Alliance?

Standard & Poors recently ranked ARLP….

¾ 39th out of 10,000 companies for total return to

shareholders over the last 10 years

¾ Delivered 29.0% compounded annual return to

ARLP unitholders over that period

Source: S&P, November 2009

15
 Why Alliance?

The MLP Coal Investment leveraging….

„ Positive long-term coal fundamentals

„ Growing scrubber markets

„ Strong balance sheet and liquidity

„ Aligned interests of management and unitholders

„ Consistent track record of cash flow and distribution

growth

16
Alliance Snapshot
Corporate Headquarters – Tulsa, Oklahoma

„ Nine underground mining

complexes
Pennsylvania
11 „ Three development projects
Indiana Ohio
in the growing ILB and NAPP
10
Illinois Maryland
West
12
markets
Virginia
„ Currently over 3,000
7
1 8
4
Kentucky Virginia
2
3 5 6
9 employees growing to more
than 3,700 by 2011
Current Mining Operation Future Growth Project Transfer Terminal

1 Pattiki Complex 5 Warrior Complex 9 MC Mining Complex

2 River View Complex 6 Hopkins Complex 10 Tunnel Ridge Complex

3 Dotiki Complex 7 Gibson Complex 11 Penn Ridge Complex

4 Mount Vernon 8 Pontiki Complex 12 Mettiki Complex

Transfer Terminal

17
 Alliance Operations Summary

2008 Production Reserves - 2008

26.4 Million Tons 686 Million Tons

Northern
Appalachia
11%

Illinois Basin Illinois Basin Northern

77% 74% Appalachia
22%

Central
Appalachia
12% Central
Appalachia
4%

18
 Well Positioned in Scrubber Markets

„ Future growth potential for scrubber market bodes well for Alliance’s high
sulfur operations
Current and Projected Eastern U.S. Installed Scrubber Capacity
12,500 Btu Equivalent
Million Tons(1)

180 190 190

160 170 170 170 170
110 130
60

220 220 220 220 220 220 220 220 220 220 220 220
0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Installed Scrubber Capacity Incremental Scrubber Capacity
Source: Ventyx Net Winter Capacity as of September 2009

(1) Assumption used to convert gigawatts of capacity to million tons of coal:

9,600 Btu/Kwhr
Btu/Kwhr plant heat rate, 75% plant capacity factor, 12,500 Btu coal.

19
Large Inventory of Organic Growth
Projects
River View
„ Currently operating three production units
„ Scheduled to reach full production capacity of 6.4
million tons/year by mid 2010
„ Estimated reserves ~ 105 million tons high sulfur coal
„ Estimated capital expenditures of $250-
$250-$275 million
Tunnel Ridge
„ Under construction
„ Estimated reserves ~ 70 million tons high sulfur coal
„ Production capacity ~ 6 million tons/year
„ Initial longwall production in late 2011
„ Capital estimated to be $265-
$265-$285 million excluding
capitalized development and interest costs

Pennsylvania

Indiana Ohio
Illinois Maryland
West
Virginia
Virginia
Kentucky

Gibson South Penn Ridge

„ Permitting in progress
„ Initiating permitting process
„ Estimated reserves ~ 83 million tons medium sulfur
„ Estimated reserves ~ 57 million tons high sulfur coal
coal
„ Production capacity ~ 5 million tons/year
„ Production capacity ~ 2.7 – 3.1 million tons/year

20
 Strong Balance Sheet

Conservative Leverage Ample Liquidity

4.5x 4.5x „ $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
3.1x

„ Existing $150 million revolving

2.2x credit facility expires in 2012

„ Liquidity of ~ $228 million

1.1x
available at September 2009

„ Current debt amortization of $18

million annually
ARLP Oil & Gas Propane Pipeline & All Energy
MLPs MLPs Processing MLPs
„ Visible cash flow growth
Debt / LTM EBITDA(1)
(1) Source: SMH Capital, Inc. as of October 29, 2009.

21
Alliance Partnership Profiles

NASDAQ Symbol: ARLP AHGP

Unit Price: $39.04 $24.61

Annualized Distribution: $3.04 $1.76

Distribution Yield: 7.8% 7.2%

Equity Market Cap: $1,424 mm $1,455 mm

Enterprise Value: $1,772 mm $1,455 mm

Asset Profile: „ 5th largest eastern coal producer „ Ownership Interests in Alliance Resource
operating 9 underground mining
complexes ⎯ 1.98% G.P. Interest

„ 686 million tons of reserves at ⎯ 100% of Incentive Distribution Rights

December 31, 2008
⎯ 15.5 mm Alliance Resource common
units representing approximately
42.5% of the ARLP units outstanding
Source: Market data as of December 2, 2009.

22
Consistent Track Record of Growth

Production Revenue (1)

% $1,243.8
% : 14. 8
CAGR: 5.0 26.0 CAGR $1,111.8
26.4
23.7 24.3 $995.6

$ in millions
22.3 $920.0
Millions of Tons

20.4 $799.6
$623.5

2004 2005 2006 2007 2008 2009LTM 2004 2005 2006 2007 2008 2009LTM

EBITDA(2) ARLP Distribution Per Unit

16.7% 4%
CAGR: : 18. $2.89
$320.0 CAGR
$2.53
$250.9 $267.0 $257.8 $2.20
$230.1 $1.92
$ in Millions

$1.58
$147.9 $1.24

2004 2005 2006 2007 2008 2009LTM 2004 2005 2006 2007 2008 2009LTM

(1) Excludes transportation revenues

(2) non-GAAP measure defined as income before net interest expense, income
EBITDA is a non- income taxes and depreciation, depletion and amortization
(3) LTM as of September 30, 2009

Source: Company filings

23
 Consistent Track Record of Distribution
Growth
Over the last three years –
„ ARLP has increased distributions 52%
„ AHGP has increased distributions 105%
ARLP AHGP
Annualized Quarterly Distribution

Annualized Quarterly Distribution

$1.7 6
$3.25
GR $1.80 R
CA
$3.04
C AG
$3.00 0% $1.60 0% $1.56
15. 27.
$2.7 5 $2.64 $1.40
$2.50 $1.20
$2.24 $1.06
$2.25 $1.00 $0.86
$2.00
$2.00 $0.80
$1.7 5
$0.60
$1.50
$0.40
$1.25
$0.20
Sep-06
Dec-06
Mar-07
J un -07
Sep-07
Dec-07
Mar-08
J un -08
Sep-08
Dec-08
Mar-09
J un -09
Sep-09

Sep-0 6
D ec-0 6
M a r -0 7
J un -0 7
Sep-0 7
D ec-0 7
M a r -0 8
J un -0 8
Sep-0 8
D ec-0 8
M a r -0 9
J un -0 9
Sep-0 9
Source: Company filings

24
 Strong Distribution Growth

LTM Distribution Growth %

12.8%

8.6%
7.1%

2.4%
1.4%
0.7%

ARLP AHGP Oil & Gas Propane Pipe line & All Ene rgy All GPs
MLPs MLPs Proce ssing MLPs

Source: SMH Capital, Inc. as of October 29, 2009

(16.7% )
25
 Alliance Investment Take Aways

Alliance Resource Partners, L.P.

„ Performance
9 Proven track record of superior operating and financial results
9 Clear strategy and visible inventory of growth prospects
„ Results (a)
9 ARLP has delivered a 603% total return to unitholders since its IPO
Alliance Holding GP, L.P.
„ Opportunity
9 IDRs provide leverage to distribution growth potential of ARLP
9 Management Investors own 79.4% of all outstanding units
„ Results (a)
9 AHGP has increased distributions 105% since its IPO

(a) As of November 2, 2009 (assuming reinvestment of distributions)

distributions)

26
Alliance EBITDA Reconciliation

2005 2006 2007 2008

Cash Flow Provided by Operating Activities $193,618 $250,923 $244,012 $261,041

Non-cash compensation expense (8,193) (4,112) (3,925) (3,931)

Asset retirement obligations (1,918) (2,101) (2, 419) (2,827)

Coal Inventory Adjustment to Market (573) (319) (21) (452)

Net Gain (Loss) on Sale/Retirement of PP&E (1,477) 1,188 3,189 6,070

Gain from insurance recoveries/settlements – – 7,445 –

Net gain from foreign currency transactions – – – –

Other (580) (1,119) (811) (366)

Net Effect of Working Capital Changes 34,770 (5,317) 7,898 (19,661)

Interest Expense, Net 11,816 9,175 9,952 18,418

Income Tax Expense (Benefit) 2,682 2,443 1,669 (480)

EBITDA $230,145 $250,761 $266,989 $257,812

Depreciation, Depletion and Amortization (55,637) (66,489) (85,310) (105,278)

Interest Expense, Net (11,816) (9,175) (9, 952) (18,418)

Income Tax Expense (Benefit) (2,682) (2,443) (1,669) 480

Cumulative Effect of Accounting Change – 112 – -

Minority Interest Income (Expense) – 161 332 (420)

Net Income $160,010 $172,927 $170,390 $134,176

Note: EBITDA is defined as income before net interest expense, income
income taxes and depreciation, depletion and amortization. Management
Management believes EBITDA is
a useful indicator of its ability to meet debt service and capital
capital expenditure requirements and uses EBITDA as a measure of operating
operating performance. EBITDA
should not be considered as an alternative to net income, income from operations, cash flows from operating activities or any other other measure of financial
performance presented in accordance with generally accepted accounting
accounting principles. EBITDA is not intended to represent cash flow
flow and does not represent
the measure of cash available for distribution. The Partnership's
Partnership's method of computing EBITDA may not be the same method used to compute similar
measures reported by other companies, or EBITDA may be computed differently by the Partnership in different contexts (i.e. public public reporting versus
computation under financing agreements). Estimate midpoint reflectsreflects the Partnership’
Partnership’s most recent guidance

27
 Wells Fargo Securities
MLP & Pipeline Symposium

December 8, 2009

Brian L. Cantrell
Chief Financial Officer