Alliance Resource Partners (ARLP) 8-K Alliance CEO to Present at Master Limited Partnership Investor Conference

MLP Investor Conference

March 9, 2006

Exhibit 99.2

Statements

in

this

presentation

which

are

not

statements

of

historical

fact

are

forward-

looking

statements

within

the

meaning

of

the

safe

harbor

provisions

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

These

forward-looking

statements

are

based

on

current

factual

information

and

certain

assumptions

which

management

believes

to

be

reasonable

at

this

time.

The

Partnership’s

actual

current

and

future

results,

however,

are

dependent

upon

numerous

factors

outside

the

control

of

the

Partnership.

These

factors,

and

other

applicable

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

projected

results,

are

described

more

fully

in

the

Partnership’s

public

periodic

and

other

reports

filed

with

the

Securities

and

Exchange

Commission. 

Except

as

required

by

applicable

securities

laws,

the

Partnership

undertakes

no

obligation

to

update

any

forward-looking

statements

at

any

time

in

the

future.

FORWARD-LOOKING STATEMENTS

3

2006 MLP Investor Conference

Alliance Resource Partners Overview

ARLP Trading Information

ARLP General Information

ARLP

is

the

nation’s

only

publicly

traded

master

limited

partnership

involved

in

the

production

and

marketing

of

coal

ARLP

produces

a

wide

variety

of

steam

coals

from

eight

mining

complexes

located

throughout

the

major

eastern

U.S.

coal

fields

Visit

us

at

www.arlp.com

for

more

information

($ in million, except per share data)

Ticker:

ARLP

Exchange:

NASDAQ

Total L.P. Units Outstanding (mm)

36.3

Management % of L.P. Units Owned

42.7%

Unit Price at 3/1/2006

37.02

$        

Market Capitalization

1,413.8

$     

Net Debt Outstanding

124.8

$        

Enterprise Value

1,538.6

$     

2005 Annual Distribution / L.P. Unit

1.58

$          

2005 Distributable Cash Flow / L.P. Unit

4.16

$          

2005 Distribution Coverage Ratio

(a)

2.64

x

Current Annual Distribution

1.84

$          

Distribution Yield

4.97%

(a)  Coverage calculated as total cash available for distribution divided by current annualized cash distributions

4

2006 MLP Investor Conference

Alliance Resource Partners, L.P.

Focused on Primary Business Objective –

Create sustainable, capital efficient growth in

distributable cash flow to maximize growth in

distributions to ARLP unitholders

5

2006 MLP Investor Conference

Diversified producer and marketer of coal to major U.S. utilities and industrial users

2005

production

of

22.3

million

tons

ranked

ARLP

as

the

fifth

(a)

largest

eastern

coal

producer

and

eleventh

(b)

in

the

U.S.

Currently

controls

approximately

549.0

million

tons

of

proven

and

probable

coal

reserves in the Illinois Basin, Central Appalachia and Northern Appalachia regions

Diversified Operations

(a)  Source: Platts Coaldat as of 9/30/05.    (b) Source: National Mining Association, Mine Safety and Health Administration, company data, and Lehman Brothers estimates.

6

2006 MLP Investor Conference

Efficient Operations

Source: Citigroup

EBITDA margin represents  EBITDA / Total Revenues.  EBITDA is a non-GAAP measure.  See Slide 25 for a reconciliation of  EBITDA to Net Income.

By maximizing existing assets ARLP has consistently delivered sector leading

EBITDA margins

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Alliance

Foundation

Consol

Peabody

Massey

Arch

Alpha

2003

2004

2005

7

2006 MLP Investor Conference

Consistent Cash Flows

ARLP’s product and geographic diversity provides strong and stable cash flow

$70.5

$101.3

$110.3

$145.1

$193.6

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

$200.0

2001

2002

2003

2004

2005

8

2006 MLP Investor Conference

Exceptional Long-Term Performance

Production

Revenues

EBITDA

Net Income

Five Consecutive Years of Record Results -

9

2006 MLP Investor Conference

Solid Production Growth

18.0

19.2

20.4

22.3

24.5

0.0

5.0

10.0

15.0

20.0

25.0

2002

2003

2004

2005

2006E

Production increased more than 9% in 2005 and is expected to grow more

than 9% in 2006

With identified growth projects, ARLP is targeting annual production of up

to 38 million tons by 2010

10

2006 MLP Investor Conference

Strong Revenue Growth

$499.9

$523.2

$623.5

$799.6

$910.0 -

$930.0

$400

$500

$600

$700

$800

$900

$1,000

2002

2003

2004

2005

2006E

Revenues

have

grown

at

a

17%

CAGR

since

2002

Future

revenue

growth

potential

enhanced

by

meaningful

exposure

to

market

pricing

Tons of Coal

Year

(MM)

2006

1.65

2007

10.34

2008

16.62

Coal Sales Volumes Open to Market Pricing

As of March 1, 2006

11

2006 MLP Investor Conference

Strong EBITDA Growth

EBITDA

is

a

non-GAAP

measure

defined

as

income

before

net

interest

expense,

income

taxes

and

depreciation,

depletion

and

amortization.

See

Slide

25

for

a

reconciliation

of

EBITDA

to

Net

Income.

EBITDA has grown at a 31% CAGR since 2002 and is expected to increase 

by up to 15% in 2006

$102.5

$119.0

$147.9

$230.1

  $245.0 -

$265.0

$50

$100

$150

$200

$250

$300

2002

2003

2004

2005

2006E

12

2006 MLP Investor Conference

Consistent Net Income Growth

Net Income has grown at a 76% CAGR since 2002 and is expected to

increase by up to 13% in 2006

$34.8

$47.9

$76.6

$160.0

    $160.0 -

$180.0

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2002

2003

2004

2005

2006E

13

2006 MLP Investor Conference

Solid Financial Position

Significant financial capacity available for growth 

EBITDA

is

a

non-GAAP

measure

defined

as

income

before

net

interest

expense,

income

taxes

and

depreciation,

depletion

and

amortization.

See

Slide

25

for

a

reconciliation

of

EBITDA

to

Net

Income.

($ in thousands)

2004YE

2005YE

Cash and Securities

80,574

$      

81,296

$      

EBITDA

147,889

$    

230,145

$    

Interest Expense

14,963

$      

11,816

$      

Senior Notes

180,000

$    

162,000

$    

$85MM Credit Facilitiy

-

-

   Total Debt

180,000

$    

162,000

$    

Total Capital

235,187

$    

317,777

$    

Debt to Capital

76.53%

50.98%

Market Capitalization

1,341,653

$ 

1,355,059

$ 

Debt to Market Capitalization

13.42%

11.96%

EBITDA / Interest Expense

9.88 x

19.48 x

Total Debt / EBITDA

1.22 x

.70 x

14

2006 MLP Investor Conference

With Strong Distribution Growth…

2002

2003

2004

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

2005

Distributions

to

unitholders

increased

24%

in

2005

and

84%

since

the

beginning

of

2002

Compared

to

MLP

Composite

average

annual

distribution

growth

rate

of

6%

(a)

(a) Source:  Citigroup Investment Research

15

2006 MLP Investor Conference

... And Industry-Leading Distribution Coverage

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

Alliance

Pipeline

Composite

Propane

Composite

Others

2003

2004

2005(e)

Source:

Citigroup

(9/21/05).

Coverage

calculated

as

total

cash

available

for

distribution

divided

by

current

annualized

cash

distributions.

Note:

Pipeline

composite

includes

Buckeye,

Enbridge,

Energy

Transfer,

Kinder

Morgan,

Magellan,

Northern

Border,

Pacific

Energy,

Plains

All

American,

Sunoco

Logistics,

TC

Pipelines,

TEPP

CO

and

Transmontaigne.

Propane

composite

includes

Amerigas,

Ferrellgas,

Inergy

and

Suburban.

Others

include

Natural

Resource

Partners,

Teekay

LNG

and

US

Shipping.

1.83

2.74

2.16

1.15

1.06

0.94

1.13

1.23

1.19

1.07

1.18

1.14

ARLP’s distribution coverage ratio of greater than 2.0x is the highest in the

MLP universe

16

2006 MLP Investor Conference

-50

0

50

100

150

200

250

300

350

400

1/1/2003

6/15/2003

11/27/2003

5/10/2004

10/22/2004

4/5/2005

9/17/2005

3/1/2006

Indexed Total

Return (%)   

ARLP

Coal MLP Index

Pipeline MLP Comps

S&P 500

+271.6%

+223.2%

+78.2%

Total Returns Since 1/1/2003

+46.6%

ARLP has Delivered Superior Total Returns

(a)

Coal MLP Index includes NRP and PVR.

(b)

Pipeline MLP Index includes APL, BPL, BWP, DPM, XTEX, EEP, EPD, ETP, HLND, HEP, KMP, MMP, MWE, MMLP, NBP, PPX, PAA, SXL, TCLP, TLP, TPP, WPZ and VLI.

__________________ 

(a)

(b)

Source:  Lehman Brothers

17

2006 MLP Investor Conference

…and Remains Attractively Valued

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Peabody

Arch

Consol

Massey

Alliance

Foundation

Alpha

EV/2006E EBITDA

(1)

Peabody

Arch

Consol

Massey

Alliance

Foundation

Alpha

Source:  ARLP

(1)

EV

represents

Enterprise

Value

which

reflects

Market

Capitalization

plus

Debt.

Average

EBITDA

estimates

from

Thompson

One

Analysis

for

all

companies,

ARLP

EBITDA

adjusted

for

General

Partner

interests.

EBITDA

is

a

non-GAAP

measure.

See

Slide

25

for

a

reconciliation

of

EBITDA

to

Net

Income.

18

2006 MLP Investor Conference

130

127

118

126

112

113

112

123

106

90.0

100.0

110.0

120.0

130.0

140.0

3Q

2003

4Q

2003

1Q

2004

2Q

2004

3Q

2004

4Q

2004

1Q

2005

2Q

2005

3Q

2005

U.S. Coal Inventories

(a)

0.0

15.0

30.0

45.0

60.0

1980

1990

2000

2010

2020

2030

Historical and Projected Energy Consumption by Source

(a)

Petroleum

Coal

Gas

Nuclear

Renewable

Hydropower

__________________ 

(a)

Source:

Energy

Information

Administration.

Favorable Coal Fundamentals

Growing Domestic Demand for Coal

Continued U. S. economic strength

Electric power demand near all-time high and

expected to grow ~ 2% annually through 2030

(a)

Energy Policy Act of 2005 favors coal as fuel

of the future

New coal-fired power plants total ~ 174 GW

by 2030

(a)

Domestic Coal Supply Constraints

Significant barriers to entry (permitting,

regulatory compliance, etc.)

Higher capital costs and extended mining

equipment backlog

Skilled labor shortages

Ongoing transportation infrastructure issues

Low Coal Stockpiles

Inventory levels at 3Q’05 8% below prior year

and 20% below five-year average

(a)

Favorable Export Dynamics

Continued global expansion (China, India,

U.S.)

Lagging global supply response

Challenges for Competing Fuels

Nuclear utilization at full capacity

Non-competitive oil and natural gas prices

Continued challenges for LNG

19

2006 MLP Investor Conference

Significant High-Sulfur Market Dynamics

Current and pending

legislation has caused utilities

to announce or plan to add

scrubbers which should lead

to additional market

opportunities for the Illinois

Basin and Northern

Appalachian regions

As utilities execute their

environmental compliance

initiatives, a significant

amount coal demand

historically supplied from the

Central Appalachian region

should switch to higher sulfur

Illinois Basin and Northern

Appalachian coal

Scrubber Additions -

Announced

Planned

20

2006 MLP Investor Conference

Impact of Scrubber Installations

Emphasis on sulfur content will diminish and coal

purchasing decisions will be based on lowest delivered cost

per MMBtu

Transportation costs will play major role in determining

ultimate amount of coal switching in the future

As scrubber installations are completed –

Illinois Basin & Northern Appalachia High-Sulfur Coals

Will Benefit From These Changing Market Dynamics

21

2006 MLP Investor Conference

Recent

coal

sales

agreement

have

solidified

ARLP’s

presence

in

the

scrubber markets

Allegheny Coal Sales Agreement

•

New 10 year, 20 million ton coal supply agreement commencing with initial

production

from

Penn

Ridge

mine

currently

estimated

in

2009

-

2010

•

Penn

Ridge

to

supply

annually

2

million

tons

of

scrubber

quality

high-

sulfur

coal for use in Allegheny’s power plants

LG&E Coal Sales Agreement

•

New 6 year, 23.5 million ton coal supply agreement commencing January 1,

2007 with option to extend beyond primary term for additional 4 years and

16 million incremental tons

•

Alliance will ship annually up to 4 million tons of high-sulfur coal to LG&E

VEPCO Coal Sales Agreement

•

New 7 year, 15.8 million ton coal supply agreement commencing January 1,

2007

•

Alliance will ship annually ~2.25 million tons of medium-sulfur coal to

VEPCO’s Mt. Storm Station

ARLP Recent Positioning in Scrubber Markets

22

2006 MLP Investor Conference

ARLP has a number of significant, near-term development opportunities which

could be financed with internally generated cash flow

Tunnel

Penn

Gibson

Elk

Development Project:

Ridge

Ridge

South

Creek

Status:

Permitting in

progress

Inititating permitting

process

Permitting in

progress

Completing

development

Expected Development

Capital:

$200 million

$165 million

$83 million

$68.8 million

Anticipated Initial

Production:

2009 - 2010

2009 - 2010

2008 - 2009

2006

Estimate Reserves

(million tons):

70

55

83

33

Coal Quality:

High Sulfur

High Sulfur

Medium Sulfur

High Sulfur

Estimated Annual

Production Capacity

(million tons):

6.0

5.0

3.1

2.0 in 2006 ramping

to 3.8 in 2007

ARLP Future Positioning in Scrubber Markets

23

2006 MLP Investor Conference

ARLP Investment Highlights

Diversified asset base with operations in all major

eastern U. S. coal fields producing a wide variety of

steam coals

Proven track record of financial and operating

performance and growth

Demonstrated market performance

Highest distribution coverage ratio in the MLP sector

Stable coal industry fundamentals and robust growth

dynamics for high-sulfur coal

Visible inventory of growth prospects looking forward

Questions and Answers

*

*

*

*

* * *

25

2006 MLP Investor Conference

EBITDA Reconciliation

EBITDA

is

defined

as

income

before

net

interest

expense,

income

taxes

and

depreciation,

depletion

and

amortization.

Management

believes

EBITDA

is

a

useful

indicator

of

its

ability

to

meet

debt

service

and

capital

expenditure

requirements

and

uses

EBITDA

as

a

measure

of

operating

performance.

EBITDA

should

not

be

considered

as

an

alternative

to

net

income,

income

from

operations,

cash

flows

from

operating

activities

or

any

other

measure

of

financial

performance

presented

in

accordance

with

generally

accepted

accounting

principles. 

EBITDA

is

not

intended

to

represent

cash

flow

and

does

not

represent

the

measure

of

cash

available

for

distribution.

The

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

reporting

versus

computation

under

financing

agreements).

($ in thousands)

Year Ended December 31,

2006E

2002

2003

2004

2005

Midpoint

Cash flows provided by operating activities

101,306

$ 

110,312

$ 

145,055

$ 

193,618

$ 

250,000

$ 

Reclamation and mine closing

(1,365)

(1,341)

(1,622)

(1,918)

(1,800)

Coal inventory adjustment to market                                

(48)

(687)

(488)

(573)

-

Other

1,014

353

(255)

(2,057)

(1,000)

Net effect of changes in operating assets and liabilities

(13,714)

(8,240)

(12,405)

26,577

(5,700)

Interest expense

16,360

15,981

14,963

11,816

10,700

Income taxes

(1,094)

2,577

2,641

2,682

2,800

EBITDA

102,459

$ 

118,955

$ 

147,889

$ 

230,145

$ 

255,000

$ 

Depreciation, depletion and amortization

(52,408)

(52,495)

(53,664)

(55,637)

(71,500)

Interest expense

(16,360)

(15,981)

(14,963)

(11,816)

(10,700)

Income taxes

1,094

(2,577)

(2,641)

(2,682)

(2,800)

Net income

34,785

$    

47,902

$    

76,621

$    

160,010

$ 

170,000

$ 

MLP Investor Conference

March 9, 2006

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