Alliance Resource Partners, L.P. Reports Record Quarterly Financial and Operating Results; Declares Quarterly Cash Distribution of $0.46 Per Unit; and Confirms Guidance

Alliance Resource Partners, L.P. (Nasdaq:ARLP) (the"Partnership") today reported record financial and operating resultsfor the quarter ended March 31, 2006 (the "2006 Quarter"). Net incomefor the 2006 Quarter increased approximately 23% to a record $48.2million, or $1.18 of adjusted net income per diluted limited partnerunit, as compared to $39.1 million of net income, or $1.01 of adjustednet income per diluted limited partner unit, for the first quarter of2005 (the "2005 Quarter"). The Partnership's use of adjusted netincome per diluted limited partner unit is consistent with themethodology used by securities analysts and compares favorably to the2006 Quarter consensus estimate for earnings per diluted limitedpartnership unit of $0.97. The Partnership also reported record EBITDAof $65.9 million in the 2006 Quarter which reflects a 16% increaseover the 2005 Quarter EBITDA of $56.9 million. (For definitions ofadjusted net income per limited partner unit and EBITDA andreconciliations to GAAP, please see the end of this release.)

The Partnership also announced that the Board of Directors of itsmanaging general partner (the "Board") had declared a quarterly cashdistribution of $0.46 per unit for the first quarter ended March 31,2006 (an annualized rate of $1.84 per unit), payable on May 15, 2006,to all unitholders of record as of May 8, 2006. Increases to thePartnership's quarterly cash distribution to unitholders are generallyconsidered by the Board at its January and July meetings.

"Alliance again delivered strong operating performance during thequarter, setting operating and shipping records for tons produced andsold," said Joseph W. Craft III, President and Chief ExecutiveOfficer. "As a result of this exceptional performance and higher coalprices, we posted new financial results records for revenues, EBITDAand net income during the quarter."

Consolidated Financial Results

Driven by record coal sales volumes, revenues for the 2006 Quarterincreased 22% to a record $238.3 million, compared to revenues of$195.6 million for the same period last year. Reflecting continuedstrength in the coal markets, revenues also benefited from higheraverage coal sales prices realized during the 2006 Quarter. Coalproduction for the 2006 Quarter increased 9% to a record 6.2 milliontons, as compared to 5.7 million tons for the 2005 Quarter.

Primarily as a result of higher costs resulting from increasedproduction, as well as higher coal sales volumes and sales relatedexpenses, operating expenses for the 2006 Quarter rose to $152.0million compared to $119.4 million for the 2005 Quarter. Operatingexpenses for the 2006 Quarter were also impacted by continuing upwardpressures on labor related costs, insurance expense, maintenanceexpense, and materials and supply costs (particularly steel, power andfuel).

General and administrative expenses increased in the 2006 Quarterto $7.2 million as compared to $5.7 million during the 2005 Quarter,which increase was primarily attributable to higher unit-basedincentive compensation expense. The Partnership also recorded apositive cumulative effect of accounting change in the 2006 Quarter of$0.1 million as a result of its adoption of Statement of FinancialAccounting Standard No. 123R, Share-Based Payment.
Regional Results and Analysis

Northern
Illinois Basin Appalachia
------------------- ------------------
2006 Qtr 2005 Qtr 2006 Qtr 2005 Qtr
--------- --------- --------- --------

Tons sold (millions) 4.3 4.2 0.8 0.9
Coal sales price per ton (1) $32.80 $29.73 $30.22 $34.18
Adjusted EBITDA expense per
ton (2) $22.80 $20.07 $21.23 $20.85
Adjusted EBITDA (millions) (3) $51.3 $46.0 $7.9 $12.4


Central Appalachia Total (4)
------------------- -----------------
2006 Qtr 2005 Qtr 2006 Qtr 2005 Qtr
--------- --------- -------- --------

Tons sold (millions) 1.0 0.5 6.1 5.6
Coal sales price per ton (1) $48.41 $43.52 $35.76 $31.76
Adjusted EBITDA expense per
ton (2) $36.44 $36.92 $25.44 $21.92
Adjusted EBITDA (millions) (3) $11.9 $3.8 $73.0 $62.6

(1) Sales price per ton is defined as total coal sales dividend by
total tons sold.

(2) Adjusted EBITDA expense per ton represents the sum of operating
expenses, outside purchases and other income divided by total tons
sold.

(3) For a definition of Adjusted EBITDA and reconciliation to GAAP,
please see the end of this release.

(4) Total includes other and corporate.

The Partnership's coal sales volumes for the 2006 Quarter totaleda record 6.1 million tons, an increase of more than 8% over the 5.6million tons of coal sold in the 2005 Quarter. Higher coal salesvolumes during the 2006 Quarter were primarily attributable toincreased sales from the Excel No. 3 mine, which returned toproduction, following the MC Mining Fire Incident, on February 21,2005. (See ARLP Press Releases dated December 27, 2004, January 7,January 14, February 21 and March 3, 2005.)

Total average coal sales prices for the 2006 Quarter increasedapproximately 13% over the 2005 Quarter to a record $35.76 per tonsold. As a result of new coal sales agreements and the re-pricing ofseveral long-term coal sales contracts at higher prices, average coalsales prices in the Illinois Basin and Central Appalachian regionsincreased approximately 10% and 11%, respectively. Average salesprices realized in the Northern Appalachian region decreasedapproximately 12% primarily due to fewer tons sold into the higherpriced export market during the 2006 Quarter.

Total adjusted EBITDA expense increased $3.52 per ton during the2006 Quarter to $25.44 per ton. In addition to the increasing costpressures described above in each of the Partnership's operatingregions, expenses also moved upward as a result of lower productivityat the Pattiki and Gibson County mines, primarily due to changingmining conditions experienced during the 2006 Quarter as compared tothe same period last year. Expenses during the 2006 Quarter were alsoimpacted by increased general and administrative expenses and othercosts.

Outlook

Reflecting strong coal market fundamentals, total U.S. coalshipments during the 2006 Quarter increased 2%, or nearly 6 milliontons, despite the dampening effects of a mild winter. Longer term, theexpansion of coal-fired power generation and development of coalconversion technologies are expected to result in significant growthin future coal demand.

Coal stockpiles remain well below historical averages and ongoingdifficulties associated with equipment backlogs, skilled laborshortages and transportation infrastructure continue to constrain coalsupply. Competing fuels face significant challenges, particularly withcontinued high natural gas prices and oil prices at or near recordlevels.

"In response to continued strength in the coal markets, werecently announced the acquisition of approximately 99 million tons ofIllinois Basin coal reserves and our intent to develop the River Viewmine in western Kentucky," said Mr. Craft. "The River View project isthe latest in Alliance's ongoing efforts to aggressively pursuesignificant growth opportunities. Over the past year we completed thetransition of operations at our Pontiki mine into the Van Lear seamand started the development of the Elk Creek mine in the IllinoisBasin and the Mountain View mine in Northern Appalachia. In additionto River View, we have also proposed three other new mines - GibsonSouth in the Illinois Basin and Tunnel Ridge and Penn Ridge inNorthern Appalachia. Assuming these opportunities are developed asexpected, we believe these growth projects offer potentially superiorreturns on investment and strengthen Alliance's position in thesegrowing coal markets."

Capital expenditures in the 2006 Quarter totaled $44.7 million.The Partnership currently expects total 2006 capital expenditures inthe range of approximately $160 to $175 million, including maintenancecapital of approximately $59 million. Major 2006 capital projectsinclude the completion of development of the Elk Creek and MountainView mining complexes, permitting and other development costs for theGibson South, River View, Tunnel Ridge and Penn Ridge projects,construction of the Gibson County rail loadout facility andimplementation of new safety initiatives at the Partnership'soperations.

The Partnership continues to contract sales tons at market priceshigher than the average sales prices per ton realized last year.During the 2006 Quarter, the Partnership reached agreement for 1.2million tons to be delivered in 2006 at prices higher than previouslyprojected. As a result of these higher prices, the Partnership isconfirming its previous guidance for 2006 revenues, excludingtransportation revenues, in a range of $910.0 to $930.0 million,despite the potential loss of certain synfuel-related benefitsdescribed below. For 2006, approximately 1.4 million tons of coalsales volume remains open to market pricing. Currently, coal salesvolume open to market pricing in 2007 and 2008 includes approximately10.6 million tons and 16.7 million tons, respectively.

Reflecting the Partnership's strong performance in the 2006Quarter and based on current projections, the Partnership is alsoconfirming its previous 2006 guidance ranges for EBITDA, $245.0 to$265.0 million, and net income, $160.0 to $180.0 million. The guidanceranges for both EBITDA and net income exclude the impact of anyadditional insurance recoveries attributable to the MC Mining FireIncident. (For a reconciliation of estimated annual 2006 EBITDA toGAAP, please see the end of this release.)

These 2006 guidance ranges include the net income benefit realizedby the Partnership as of this date of approximately $10.2 millionassociated with its various coal synfuel-related agreements, as wellas approximately $4.3 million of future net income benefit currentlyanticipated to be realized over the remainder of this year. Theguidance ranges noted above exclude any future benefit attributable tothe coal synfuel production facility owned by Synfuel SolutionsOperating, LLC ("SSO"), in light of SSO's decision as a result of theincrease in the wellhead price of domestic crude oil, to suspendoperations at its facility located at the Partnership's Warrior miningcomplex. SSO has advised the Partnership that resumption of operationsof the synfuel facility is dependent on the price of crude oil in thefuture. The Partnership continues to receive benefits from the ongoingoperation of two other synfuel facilities, the first located at theGibson County mining complex and the second adjacent to the Mettikimining complex, although the operation of these facilities in thefuture cannot be assured. The Partnership's realization of futuresynfuel-related benefits would be reduced if non-conventional synfueltax credits become unavailable to the owners of coal synfuelfacilities due to a rise in the price of crude oil or otherwise. Thenon-conventional synfuel tax credit is scheduled to expire on December31, 2007.

The statements and projections used throughout this release arebased on current expectations. These statements and projections areforward-looking, and actual results may differ materially. Theseprojections do not include the potential impact of any mergers,acquisitions or other business combinations that may occur after thedate of this release. At the end of this release, we have includedmore information regarding business risks that could affect ourresults.

Alliance Resource Partners is the nation's only publicly tradedmaster limited partnership involved in the production and marketing ofcoal. Alliance Resource Partners currently operates eight miningcomplexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania andWest Virginia.

FORWARD-LOOKING STATEMENTS: With the exception of historicalmatters, any matters discussed in this press release areforward-looking statements that involve risks and uncertainties thatcould cause actual results to differ materially from projectedresults. These risks, uncertainties and contingencies include, but arenot limited to, the following: increased competition in coal marketsand our ability to respond to the competition; fluctuation in coalprices, which could adversely affect our operating results and cashflows; risks associated with the expansion of our operations andproperties; deregulation of the electric utility industry or theeffects of any adverse change in the domestic coal industry, electricutility industry, or general economic conditions; dependence onsignificant customer contracts, including renewing customer contractsupon expiration of existing contracts; customer bankruptcies and/orcancellations or breaches of existing contracts; customer delays ordefaults in making payments; fluctuations in coal demand, prices andavailability due to labor and transportation costs and disruptions,equipment availability, governmental regulations and other factors;our productivity levels and margins that we earn on our coal sales;greater than expected increases in raw material costs; greater thanexpected shortage of skilled labor; any unanticipated increases inlabor costs, adverse changes in work rules, or unexpected cashpayments associated with post-mine reclamation and workers'compensation claims; any unanticipated increases in transportationcosts and risk of transportation delays or interruptions; greater thanexpected environmental regulation, costs and liabilities; a variety ofoperational, geologic, permitting, labor and weather-related factors;risk associated with major mine-related accidents, such as mine firesor other interruptions; results of litigation; difficulty maintainingour surety bonds for mine reclamation as well as workers' compensationand black lung benefits; difficulty obtaining commercial propertyinsurance, and risks associated with our participation (excluding anyapplicable deductible) in the commercial insurance property program;and, a loss or reduction of the direct or indirect benefit fromcertain state and federal tax credits, including non-conventionalsource fuel tax credits.

Additional information concerning these and other factors can befound in the Partnership's public periodic filings with the Securitiesand Exchange Commission ("SEC"), including the Partnership's AnnualReport on Form 10-K for the year ended December 31, 2005, filed onMarch 16, 2006 with the SEC. Except as required by applicablesecurities laws, the Partnership does not intend to update itsforward-looking statements.
ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OPERATING DATA
(In thousands, except unit and per unit data)
(Unaudited)

Three Months Ended
March 31,
-----------------------
2006 2005
----------- -----------

Tons sold 6,102 5,631
Tons produced 6,248 5,729

SALES AND OPERATING REVENUES:
Coal sales $218,212 $178,846
Transportation revenues 10,034 9,623
Other sales and operating revenues 10,074 7,158
----------- -----------
Total revenues 238,320 195,627
----------- -----------

EXPENSES:
Operating expenses 152,010 119,393
Transportation expenses 10,034 9,623
Outside purchases 3,526 4,117
General and administrative 7,158 5,708
Depreciation, depletion and amortization 14,722 13,628
Interest expense 2,245 3,474
----------- -----------
Total operating expenses 189,695 155,943
----------- -----------

INCOME FROM OPERATIONS 48,625 39,684
OTHER INCOME 271 105
----------- -----------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 48,896 39,789
INCOME TAX EXPENSE 759 710
----------- -----------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING
CHANGE 48,137 39,079
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 112 -
----------- -----------
NET INCOME $48,249 $39,079
=========== ===========

GENERAL PARTNERS' INTEREST IN NET INCOME $4,844 $1,685
=========== ===========

LIMITED PARTNERS' INTEREST IN NET INCOME $43,405 $37,394
=========== ===========

BASIC NET INCOME PER LIMITED PARTNER UNIT $0.83 $0.71
=========== ===========

DILUTED NET INCOME PER LIMITED PARTNER UNIT $0.83 $0.70
=========== ===========

DISTRIBUTIONS PAID PER COMMON AND SUBORDINATED
UNIT $0.46 $0.375
=========== ===========

WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING-BASIC 36,426,306 36,260,880
=========== ===========

WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING-DILUTED 36,765,016 36,992,828
=========== ===========


ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)

March 31, December 31,
------------- -------------
ASSETS 2006 2005
------------- -------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $43,450 $32,054
Trade receivables, net 94,537 94,495
Other receivables 2,755 2,330
Marketable securities 39,397 49,242
Inventories 23,685 17,270
Advance royalties 2,952 2,952
Prepaid expenses and other assets 6,088 8,934
------------- -------------
Total current assets 212,864 207,277

PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost 679,228 635,086
Less accumulated depreciation, depletion
and amortization (344,819) (330,672)
------------- -------------
Total property, plant and equipment 334,409 304,414
OTHER ASSETS:
Advance royalties 18,362 16,328
Other long-term assets 4,521 4,668
------------- -------------
Total other assets 22,883 20,996
------------- -------------
TOTAL ASSETS $570,156 $532,687
============= =============

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
Accounts payable $60,738 $53,473
Due to affiliates 2,040 8,795
Accrued taxes other than income taxes 14,603 13,177
Accrued payroll and related expenses 14,550 12,466
Accrued pension benefit 8,519 7,588
Accrued interest 1,421 4,855
Workers' compensation and pneumoconiosis
benefits 7,813 7,740
Other current liabilities 4,952 5,120
Current maturities, long-term debt 18,000 18,000
------------- -------------
Total current liabilities 132,636 131,214

LONG-TERM LIABILITIES:
Long-term debt, excluding current
maturities 144,000 144,000
Pneumoconiosis benefits 24,002 23,293
Workers' compensation 31,754 30,050
Reclamation and mine closing 39,177 38,716
Due to affiliates 5,490 6,940
Other liabilities 2,835 2,697
------------- -------------
Total long-term liabilities 247,258 245,696
------------- -------------
Total liabilities 379,894 376,910
------------- -------------

COMMITMENTS AND CONTINGENCIES

PARTNERS' CAPITAL:
Limited Partners - Common Unitholders
36,426,306 units outstanding 494,994 461,068
General Partners' deficit (297,727) (298,270)
Unrealized loss on marketable securities (52) (68)
Minimum pension liability (6,953) (6,953)
------------- -------------
Total Partners' capital 190,262 155,777
------------- -------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $570,156 $532,687
============= =============


ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Three Months Ended
March 31,
-------------------
2006 2005
---------- --------

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $67,640 $28,504
---------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures (44,714) (16,914)
Changes in accounts payable and accrued
liabilities (567) -
Proceeds from sale of property, plant and
equipment 418 193
Purchase of marketable securities (4,735) (9,727)
Proceeds from marketable securities 14,596 9,721
---------- --------
Net cash used in investing activities (35,002) (16,727)
---------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to Partners (21,242) (14,797)
---------- --------
Net cash used in financing activities (21,242) (14,797)
---------- --------

NET CHANGE IN CASH AND CASH EQUIVALENTS 11,396 (3,020)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 32,054 31,177

---------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $43,450 $28,157
========== ========

SUPPLEMENTAL CASH FLOW INFORMATION:

CASH PAID FOR:
Interest $6,864 $7,546
========== ========
Income taxes to taxing authorities $1,025 $250
========== ========

NON-CASH ACTIVITY:
Purchase of property, plant and equipment $8,797 $-
========== ========


Reconciliation of GAAP "Cash Flows Provided by Operating
Activities" to non-GAAP "EBITDA" and Reconciliation of Non-GAAP
"EBITDA" to GAAP "Net Income" (in thousands).

Three Months Ended Year Ended
March 31, December 31,
-------------------- ------------
2006 2005 2006E
---------- --------- ------------

Cash flows provided by operating
activities $67,640 $28,504 $250,000
Reclamation and mine closing (501) (452) (2,000)
Coal inventory adjustment to market (1,136) (51) -
Other 276 (236) (1,000)
Net effect of working capital
changes (3,308) 24,942 (3,600)
Interest expense 2,245 3,474 10,700
Income taxes 759 710 900
Cumulative effect of accounting
change (112) - -
---------- --------- ------------
EBITDA 65,863 56,891 255,000
Depreciation, depletion and
amortization (14,722) (13,628) (73,400)
Interest expense (2,245) (3,474) (10,700)
Income taxes (759) (710) (900)
Cumulative effect of accounting
change 112 - -
---------- --------- ------------
Net income $48,249 $39,079 $170,000
========== ========= ============

EBITDA is defined as net income before net interest expense,income taxes and depreciation, depletion and amortization. EBITDA isused as a supplemental financial measure by our management and byexternal users of our financial statements such as investors,commercial banks, research analysts and others, to assess:

-- the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;

-- the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness;

-- our operating performance and return on investment as compared to those of other companies in the coal energy sector, without regard to financing or capital structures; and

-- the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities.

EBITDA should not be considered as an alternative to net income,income from operations, cash flows from operating activities or anyother measure of financial performance presented in accordance withgenerally accepted accounting principles. EBITDA is not intended torepresent cash flow and does not represent the measure of cashavailable for distribution. Our method of computing EBITDA may not bethe same method used to compute similar measures reported by othercompanies, or EBITDA may be computed differently by us in differentcontexts (i.e. public reporting versus computation under financingagreements).
Reconciliation of EBITDA to Adjusted EBITDA (in thousands):

Three Months Ended Year Ended
March 31, December 31,
------------------- --------------
2006 2005 2006E
---------- -------- --------------

EBITDA (1) $65,863 $56,891 $255,000
General and administrative 7,158 5,708 31,000
---------- -------- --------------
Adjusted EBITDA $73,021 $62,599 $286,000
========== ======== ==============

Segment Adjusted EBITDA is defined as net income before income taxexpense (benefit), net interest expense, depreciation, depletion andamortization, and general and administrative expenses.
Reconciliation of GAAP "Net Income per Limited Partner Unit"
reflecting the impact of EITF 03-6 to non-GAAP "Adjusted Net Income
per Limited Partner Unit"

Three Months Ended
March 31,
--------------------
2006 2005
---------- ---------

Net Income per Limited Partner Unit -
Basic 0.83 0.71
Diluted 0.83 0.70
Dilutive impact of theoretical distribution of
earnings pursuant to EITF 03-6 -
Basic 0.36 0.32
Diluted 0.35 0.31
Adjusted Net Income Per Limited Partner Unit -
Basic 1.19 1.03
Diluted 1.18 1.01

Net income per limited partner unit as dictated by EITF 03-6 istheoretical and pro forma in nature and does not reflect the economicprobabilities of whether earnings for an accounting period would orcould be distributed to unitholders. The Partnership Agreement doesnot provide for the distribution of net income, rather, it providesfor the distribution of available cash, which is a contractuallydefined term that generally means all cash on hand at the end of eachquarter after establishment of sufficient cash reserves required tooperate the Partnership in a prudent manner. Accordingly, thedistributions we have paid historically and will pay in future periodsare not impacted by net income per limited partner unit as dictated byEITF 03-6.

In addition to net income per limited partner unit as calculatedin accordance with EITF 03-6, we intend to continue to present"adjusted net income per limited partner unit," as reflected in thetable above, which is consistent with our presentation of net incomeper limited partner unit in prior periods. "Adjusted net income perlimited partner unit," as presented in the table above, is defined asnet income after deducting the amount allocated to the generalpartners' interests, including the managing general partner'sincentive distribution rights, divided by the weighted average numberof outstanding limited partner units during the period. As part ofthis calculation, in accordance with the cash distributionrequirements contained in the Partnership Agreement, Partnership netincome is first allocated to the managing general partner based on theamount of incentive distributions attributable to the period. Theremainder is then allocated between the limited partners and thegeneral partners based on their respective percentage ownership in thePartnership. Adjusted net income per limited partner unit is used as asupplemental financial measure by our management and by external usersof our financial statements such as investors, commercial banks,research analysts and others, to assess:

-- the actual operation of our Partnership Agreement with respect to the rights of the general and limited partners participation in distributions,

-- the financial performance of our assets without regard to financing methods or capital structure; and our operating performance and return on investment as compared to those of other companies in the coal energy sector, without regard to financing or capital structures.

Our method of computing adjusted net income per limited partnerunit may not be the same method used to compute similar measuresreported by other companies and may be computed differently by us indifferent contexts.