Alliance Holdings GP (AHGP) 8-K Reports Strong Fourth Quarter 2006 Financial Results; and Increases Distribution 16.3% to $0.25 Per Unit

Exhibit 99.1

PRESS RELEASE
		CONTACT: Brian L. Cantrell Alliance Holdings GP, L.P. 1717 South Boulder Avenue, Suite 400 Tulsa, Oklahoma 74119 (918) 295-7673

FOR IMMEDIATE RELEASE

ALLIANCE HOLDINGS GP, L.P.

Reports Strong Fourth Quarter 2006 Financial Results; and Increases Distribution 16.3% to $0.25 Per Unit

TULSA, Oklahoma, January 29, 2007 – Alliance Holdings GP, L.P. (NASDAQ: AHGP) today reported net income for the quarter ended December 31, 2006 (the “2006 Quarter”) of $23.1 million, an increase of 3.7% over net income of $22.3 million for the quarter ended December 31, 2005 (the “2005 Quarter”). Basic and diluted net income per limited partner unit for the 2006 Quarter decreased to $0.39 per unit, compared to $0.47 per limited partner unit for the 2005 Quarter. This decrease in basic and diluted net income per limited partner unit is the result of an increase in the number of common units outstanding due to the issuance of 12,500,000 common units on May 9, 2006 in conjunction with AHGP’s initial public offering.

AHGP reported net income of $85.7 million, or $1.55 per limited partner unit, for the twelve months ended December 31, 2006, as compared to $75.6 million, or $1.60 of basic and diluted net income per limited partner unit, for the twelve months ended December 31, 2005.

The Board of Directors of AHGP’s general partner (the “Board”) also declared a quarterly cash distribution for the 2006 Quarter of $0.25 per unit (an annualized rate of $1.00 per unit), payable on February 16, 2007, to AHGP’s unitholders of record as of the close of trading on February 9, 2007. This distribution represents an increase of 16.3% over the cash distribution of $0.215 per unit (an annualized rate of $0.86 per unit) paid for the third quarter of 2006. Increases to AHGP’s quarterly cash distribution to unitholders are generally considered by the Board at its January and July meetings.

The declared distribution is based on the distributions AHGP will receive from its ownership interests in Alliance Resource Partners, L.P. (NASDAQ: ARLP). On January 29, 2007, ARLP announced a quarterly cash distribution for the 2006 Quarter of $0.54 per unit, or $2.16 per unit on an annualized basis, which distribution will be paid on February 14, 2007 to all ARLP unitholders of record as of the close of trading on February 7, 2007. (See ARLP Press Release dated January 29, 2007.)

“On the strength of its sixth consecutive year of record financial and operating results, ARLP again provided its unitholders with attractive increases in quarterly distributions during 2006,” said Joseph W. Craft, III, President and Chief Executive Officer. “The resulting increase in cash flow from our ownership interests in ARLP has allowed AHGP to increase quarterly distributions to our unitholders by 35.1% over the initial quarterly cash distribution reflected in our Prospectus.”

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AHGP reports its financial results on a consolidated basis with the financial results of ARLP. The difference in AHGP’s consolidated net income and that of ARLP is primarily attributable to non-controlling interest in consolidated ARLP net income resulting from the allocation of a significant portion of AHGP’s consolidated earnings to the limited partners of ARLP.

AHGP currently has no other operating activities apart from those conducted by the operating subsidiaries of ARLP, and AHGP’s principal sources of cash flow are its ownership of general partner interests, limited partner interests and incentive distribution rights in ARLP. Based on ARLP’s current declared distribution, AHGP expects to receive quarterly cash distributions from ARLP of $15.6 million, or $62.5 million on an annualized basis. AHGP’s primary cash requirements are for general and administrative expenses, including for 2007 an estimated $2.1 million in incremental general and administrative expenses associated with being a publicly traded limited partnership, working capital requirements, and distributions to its unitholders. At December 31, 2006, AHGP had no borrowings outstanding under its revolving credit facility.

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 projections 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.

AHGP is a limited partnership formed to own and control Alliance Resource Management GP, LLC, the managing general partner of ARLP, through which it holds a 1.98% general partner interest and the incentive distribution rights in ARLP. In addition, AHGP owns 15,544,169 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 atinvestorrelations@ahgp.com.

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: initially, our operating cash flow will be derived exclusively from cash distributions from ARLP; the risks to the business of ARLP include: fluctuation in coal prices, which could adversely affect ARLP’s operating results and cash flows; if the direct or indirect benefit to ARLP from certain state and federal tax credits, including non-conventional source fuel tax credits is materially reduced, it could negatively impact ARLP’s results of operations and reduce ARLP’s cash available for distribution; from time to time, conditions in the coal industry may make it difficult for ARLP to extend existing or enter into new long-term contracts, which could materially adversely affect the stability and profitability of ARLP’s operations.

Additional information concerning these and other factors can be found in AHGP’s public periodic filings with the Securities and Exchange Commission. Except as required by applicable securities laws, AHGP does not intend to update its forward-looking statements.

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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 December 31,						Twelve Months Ended December 31,
	2006			2005			2006			2005
Tons sold		6,515			5,872			24,351			22,849
Tons produced		5,574			5,568			23,738			22,290
SALES AND OPERATING REVENUES:
Coal sales	$	243,296		$	208,346		$	895,823		$	768,958
Transportation revenues		9,923			11,962			39,879			39,069
Other sales and operating revenues		9,849			7,024			31,540			30,691
Total revenues		263,068			227,332			967,242			838,718
EXPENSES:
Operating expenses		172,660			144,058			627,756			521,488
Transportation expenses		9,923			11,962			39,879			39,069
Outside purchases		4,962			4,132			19,213			15,113
General and administrative		9,802			4,417			32,152			33,484
Depreciation, depletion and amortization		18,206			14,817			66,497			55,647
Total operating expenses		215,553			179,386			785,497			664,801
INCOME FROM OPERATIONS:		47,515			47,946			181,745			173,917
Interest expense		(2,729	)		(3,008	)		(12,204	)		(14,617	)
Interest income		487			879			3,019			2,806
Other income		252			267			930			581
INCOME BEFORE INCOME TAXES, CUMULATIVE EFFECT OF ACCOUNTING CHANGE, MINORITY INTEREST AND NON-CONTROLLING INTEREST		45,525			46,084			173,490			162,687
INCOME TAX EXPENSE		785			426			3,013			2,682
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE, MINORITY INTEREST AND NON-CONTROLLING INTEREST		44,740			45,658			170,477			160,005
CUMULATIVE EFFECT OF ACCOUNTING CHANGE		—			—			112			—
MINORITY INTEREST		65			—			161			—
INCOME BEFORE NON-CONTROLLING INTEREST	$	44,805		$	45,658		$	170,750		$	160,005
AFFILIATE NON-CONTROLLING INTEREST IN CONSOLIDATED PARTNERSHIP’S NET INCOME		(7	)		(9	)		(30	)		(30	)
NON-AFFILIATE NON-CONTROLLING INTEREST IN CONSOLIDATED PARTNERSHIP’S NET INCOME		(21,711	)		(23,388	)		(85,011	)		(84,348	)
NET INCOME	$	23,087		$	22,261		$	85,709		$	75,627
BASIC AND DILUTED NET INCOME PER LIMITED PARTNER UNIT	$	0.39		$	0.47		$	1.55		$	1.60
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING-BASIC AND DILUTED		59,863,000			47,363,000			55,445,192			47,363,000

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ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)

ASSETS	December 31, 2006			December 31, 2005
CURRENT ASSETS:
Cash and cash equivalents	$	37,069		$	32,072
Trade receivables, net		96,558			94,495
Other receivables		3,378			2,330
Due from affiliates		25			—
Marketable securities		260			49,242
Inventories		20,224			17,270
Advance royalties		4,629			2,952
Prepaid expenses and other assets		8,419			8,934
Total current assets		170,562			207,295
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment at cost		819,991			635,086
Less accumulated depreciation, depletion and amortization		(383,284	)		(330,672	)
Total property, plant and equipment		436,707			304,414
OTHER ASSETS:
Advance royalties		22,135			16,328
Other long-term assets		6,091			4,733
Total other assets		28,226			21,061
TOTAL ASSETS	$	635,495		$	532,770
LIABILITIES AND PARTNERS’ CAPITAL
CURRENT LIABILITIES:
Accounts payable	$	58,513		$	53,597
Due to affiliates		1,289			1,539
Accrued taxes other than income taxes		14,618			13,177
Accrued payroll and related expenses		14,698			14,517
Accrued pension benefit		—			7,588
Accrued interest		4,264			4,855
Workers’ compensation and pneumoconiosis benefits		7,704			7,740
Current portion, accrued long-term incentive plan		—			5,088
Current capital lease obligation		339			—
Other current liabilities		13,964			5,120
Current maturities, long-term debt		18,000			18,000
Total current liabilities		133,389			131,221
LONG-TERM LIABILITIES:
Long-term debt, excluding current maturities		126,000			144,000
Pneumoconiosis benefits		26,315			23,293
Accrued pension benefit		6,191			—
Workers’ compensation		38,488			30,050
Reclamation and mine closing		47,825			38,716
Long-term capital lease obligation		1,512			—
Minority interest		839			—
Other liabilities		6,610			9,636
Total long-term liabilities		253,780			245,695
Total liabilities		387,169			376,916
NON-CONTROLLING INTEREST IN CONSOLIDATED PARTNERSHIP:
Affiliate		(303,823	)		(303,837	)
Non-Affiliates		324,784			270,090
Total non-controlling interest		20,961			(33,747	)
COMMITMENTS AND CONTINGENCIES
PARTNERS’ CAPITAL:
Limited Partners – Common Unitholders 59,863,000 units outstanding		234,321			196,622
Unrealized loss on marketable securities		—			(68	)
Minimum pension liability		(6,956	)		(6,953	)
Total Partners’ Capital		227,365			189,601
TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$	635,495		$	532,770

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ALLIANCE HOLDINGS GP, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Year Ended December 31,
	2006			2005
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	249,239		$	193,626
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures		(188,630	)		(116,094	)
Changes in accounts payable and accrued liabilities		2,776			5,577
Proceeds from sale of property, plant and equipment		1,401			198
Purchase of marketable securities		(19,447	)		(63,448	)
Proceeds from marketable securities		68,497			63,589
Payments for acquisition of business		(2,289	)		—
Net cash used in investing activities		(137,692	)		(110,178	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on long-term debt		(18,000	)		(18,000	)
Borrowings under debt agreements		500			—
Payments under debt agreements		(500	)		—
Payment of debt issuance cost		(690	)		—
Equity contribution received by Mid-America Carbonates, LLC		1,000			—
Contributions to consolidated partnership from affiliate non-controlling interest		2			1
Distributions paid by consolidated partnership to affiliate non-controlling interest		(18	)		(13	)
Distributions paid by consolidated partnership to non-affiliate non-controlling interest		(40,834	)		(32,687	)
Distributions paid to Partners		(339,310	)		(31,861	)
Net proceeds from issuance of common units in initial public offering		291,300			—
Net cash used in financing activities		(106,550	)		(82,560	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		4,997			888
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		32,072			31,184
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	37,069		$	32,072
CASH PAID FOR:
Interest	$	13,786		$	15,160
Income taxes to taxing authorities	$	3,045		$	3,025
NON-CASH INVESTING ACTIVITY
Purchase of property, plant and equipment	$	12,139		$	9,364
Asset acquired by capital lease	$	1,862		$	—
Market value of common units issued to long-term incentive plan participants upon vesting	$	—		$	6,988

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