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Alliance Resource Partners, L.P. (ARLP)

Q1 2010 Earnings Call Transcript

April 26, 2010 10:00 am ET

Executives

Brian Cantrell – SVP and CFO

Joe Craft – President and CEO

Analysts

Jim Rollyson – Raymond James

Mark Reichman – Madison Williams

Joel Havard – Hilliard Lyons

Ronald Londe – Wells Fargo Securities

David Martin – Deutsche Bank

Paul Forward – Stifel Nicolaus

Noah Lerner – Hartz Capital

Norman Kramer – Kramer Investments

Operator

Good day, ladies and gentlemen, and welcome to the first quarter 2010 earnings for Alliance Resource Partners, L.P. and Alliance Holdings GP. My name is Jasmine, and I’ll be your operator for today. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator instructions) I would now like to turn the call over to your host for today, Mr. Brian Cantrell, Senior Vice President and Chief Financial Officer. You may proceed, sir.

Brian Cantrell

Thank you, Jasmine and welcome everyone. We appreciate your interest in Alliance Resource Partners, which we refer to as ARLP and Alliance Holdings GP, which we refer to as AHGP. We released our 2010 first quarter earnings earlier this morning and will now discuss these results as well as our outlook for 2010. Following our prepared remarks, we will open the call to your questions.

Before we begin, let me start with a few reminders. First since AHGP’s only assets are its ownership interest in ARLP, our comments today will be directed to ARLP’s results and outlook, unless otherwise noted. In addition please be aware that some of our remarks may include statements, which are not historical in nature and may concern future expectations, plans and objectives of the Partnerships regarding their future operations. Such comments constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, and are based on the beliefs of the Partnerships and those of their respective general partners and management, as well as assumptions made by and information currently available to them.

Although the Alliance Partnerships, their general partners and management, believe these forward-looking statements to be reasonable at the time made, no assurances can be given that such statements will prove to be correct. Forward-looking statements 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. If one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results for the partnerships may vary materially from those we anticipated, estimated, projected or expected. In providing these remarks, neither ARLP nor AHGP has any obligations 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 reconciliation’s 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 has been posted on ARLP’S website and furnished to the SEC on Form 8-K.

Now that we’re through with the required preliminaries, I’ll turn the call over to Joe Craft, our President and Chief Executive Officer. Joe?

Joe Craft

Thank you, Brian. Good morning everyone, and thank you for joining us today. Before we began, I don’t know how many of you on the phone got to see the memorial service yesterday, but all of us here at Alliance wish to express our heartfelt condolences to the families and friends, co-workers including Don [ph] and his management team affected by the recent tragedy in West Virginia, and we also appreciate that President Obama, acknowledged at yesterday’s memorial service the important contribution that coalminers make to America.

We consider all coalminers to be heroes, men and women working tirelessly to provide the energy needed to fuel the economy of this great country, and it was refreshing to hear our leaders acknowledge their contribution yesterday.

So turning now to this morning's earnings release. For the first quarter 2010 we are pleased to begin our discussion with another strong performance in both ARLP and AHGP. We again posted record quarterly operating and financial reserves. These results were driven by solid performance across all operations, including significant benefits realized during the quarter from our new River View mine, and the strength of ARLP’s long-term coal supply contracts.

Looking ahead to the rest of 2010, we expect these benefits will continue to positively impact ARLP’s results. Coal revenues for the remainder of 2010 should further benefit from ARLP’s recent commitments to deliver 1 million tons of metallurgical coal and to the export markets during the fiscal year, beginning April 2010.

In addition, development production has begun at Tunnel Ridge, and production at River View, which has exceeded expectations so far this year, should continue to increase as we bring the six continuous mining units into production at this operation next month. These opportunities combined with our first quarter performance, give me confidence that ARLP will deliver its 10th consecutive year of record performance in 2010.

With more than 97% of our expected 2010 production sold, we are increasing our guidance for this year. ARLP is now expecting 2010 coal production in a range of 29.9 million tons to 30.6 million tons, and coal sales volumes of approximately 30.8 million tons to 31.5 million tons. The increased sales volumes and improved coal sales prices are now expected to increase ARLP’s 2010 revenues to approximately $1.5 billion to $1.6 billion.

We also currently expect 2010 EBITDA will increase to a range of $440 million to $480 million with net income increasing to a range of $270 million to $300 million. With the strong opening quarter and continued expectations for a record year in 2010, delivering substantial year-over-year growth in earnings and cash flows, we were able also to increase our quarterly cash distributions to ARLP unit holders to $0.79 per unit, an increase of 8.2% over the distribution for the first quarter of 2009.

AHGP unit holders will receive a quarterly increase to $0.465 per unit, which represents an increase of 12% over the distribution for the first quarter of 2009.

At this time, I'm going to turn the call back to Brian for a more detailed look at our financial results, after which we will be happy to address any questions that you may have. Brian.

Brian Cantrell

Thanks Joe. As reflected in our release earlier this morning, ARLP reported the strongest quarterly financial and operating performance in the history of our partnership, posting record results across the board for coal production and sales volumes, which were up 9.8% and 14.8% respectively, revenues up 15.6%, EBITDA up 10.4%, and net income up 3.4%, all as compared to the 2009 quarter.

Several factors played a significant role in achieving these results, increased coal production and sales volumes led by the performance of ARLP’s Illinois Basin Operations, and particularly reflecting the impact of our new River View mine. ARLP also continued to benefit from its strong contractual position, particularly in the Illinois Basin and northern Appalachian regions, both of which delivered increased coal price realizations quarter-over-quarter and sequentially, and also helped push ARLP’s average coal sales price up by $0.75 to a record $49.34 per ton sold.

These higher prices combined with the previously mentioned increased sales volumes drove ARLP’s record revenue in the 2010 quarter. As anticipated, operating expenses in the 2010 quarter increased over 2009 expenses within our previously stated range of 3% to 5%. Increased coal production contributed to higher labor related expenses and materials and supplies expenses, while record coal sales pushed sales related expenses up in the 2010 quarter.

Higher costs associated with our beginning coal inventories also impacted operating expenses in the 2010 quarter. In addition, we did experience some transportation disruptions during the quarter which led to increased coal inventories. We do expect to reduce our inventory during the remainder of 2010, however, and currently anticipate coal inventories will return to near normal levels by year-end.

ARLP is closely monitoring coal market conditions, managing production expansion and capital expenditures accordingly. We continue to anticipate 2010 total capital expenditures in the range of $275 million to $315 million. In addition to necessary expenditures for maintenance, our capital will primarily be directed to continued expansion of the new River View mine and development of the Tunnel Ridge mine.

As we had previously indicated, these estimates reflect our currently anticipated schedules, and actual capital expenditures may vary due to construction accelerations or delays. ARLP strong performance and ongoing efforts to manage cost and expenses have kept our balance sheet strong. This strength along with liquidity of approximately $130 million at the end of the 2010 quarter and ready access to the capital markets leave ARLP well-positioned to execute our current plans, and to take advantage of additional opportunities that may arise.

This concludes our prepared comments. Again thanks to all for joining us today to learn about our record quarter and what should prove to be the best year in our partnership's history. We appreciate your continued support and interest in the ARLP and AHGP, and now with Jasmine's assistance we will open the call to your questions.

Question-and-Answer Session

Operator

(Operator instructions) Your first question comes from the line of Jim Rollyson with Raymond James. You may proceed.

Jim Rollyson – Raymond James

Good morning everyone. Sorry about such sloppy results this quarter, actually just kidding, fantastic job. Joe, last week Peabody spent some time in their call talking about kind of the challenges going on with regard to central App, and obviously that is not going to get any easier after what happened a couple of weeks back. Kind of curious you know they mentioned the outcome of that being the benefit of PRB in Illinois Basin, kind of curious if you guys are having any pickup in discussions with customers in light of what has been going on, and probably what is going to be going on, and may be how that filters into your development of Gibson South [ph]?

Joe Craft

There hasn't been, you know, since the incident there hasn't been really a pickup with Central App customers for Illinois Basin production. I mean there has been over the past year, continued interest relative to those utilities that have added scrubbers, but there hasn't been anything specific to the accident of April 5. I think that relative to opportunities for Gibson South, we did have conversations ongoing towards the end of ’08 and beginning of ’09, and those did subside with the recession.

There has been some interest that has been shown recently, but nothing specific where to give you an indication that there is any imminent start-up of the operation.

Jim Rollyson – Raymond James

So, that is still ways off, and on Tunnel Ridge, which you are kind of working up, can you remind us where you stand on kind of contract commitments there?

Joe Craft

We have about 60% of that production under contract with some of that having optionality at Illinois Basin. So as we look to ramp up our production, we have started production and will have about 250,000 tons to sell in 2010, which we plan to place as test orders, and at the moment we are sold out in 2011 with again 40% to be sold in 2012.

Jim Rollyson – Raymond James

Got you, and then lastly from me, maybe given the kind of thoughts – your commentary on the thermal markets right now, kind of wondering what your contracting strategy is for your own committed steam coal kind of going forward, are you kind of patiently waiting for the market to start developing into a little tighter market, a little better pricing opportunities, are you just kind of taking on commitments here and there or what do you thinking?

Joe Craft

Well, we are essentially sold out for this year. So as we look to 2011, basically if you exclude the seventh and eight unit at River View, which we got sort of in limbo, and are waiting for the markets to respond. We got about 90% of our production sold in 2011, so what we are doing is we are responding to solicitation, but we are responding at prices that we think are reasonable over a 2 to 3-year time period with the hope and expectation that the market will respond to those positively. So we are responding again with the effort to have longer-term solicitations with the ability to bring up some production. We have one unit at Excel, where we suspended operations a year ago. So we got excess capacity there, as well as we got the excess capacity with the units, and some additional contracts that open in Illinois Basin. So we would definitely be responsive what we are seeing in the marketplace. We are seeing some solicitations coming out for 2 to 3-year time horizon. So we're just responding to those as they come to the market.

Jim Rollyson – Raymond James

Okay, great. Thanks again. Good quarter.

Joe Craft

Thanks Jim.

Brian Cantrell

Thank you.

Operator

Your next question comes from the line of Mark Reichman with Madison Williams. You may proceed.

Mark Reichman – Madison Williams

Hello, good morning. Are you able to provide an update on secured sales commitments for 2011, 2012, and 2013? I think you gave some guidance earlier in the year?

Brian Cantrell

We did and those have not moved materially from our earlier guidance.

Mark Reichman – Madison Williams

Okay, and then last week the management of Peabody opined that coal inventory levels were higher at utilities that sourced their supplies from Central Appalachia, and then from the PRB, and I was wondering if you could provide some color on coal inventories as some of the utilities source their supplies from the Illinois Basin Operations and Northern Appalachia?

Joe Craft

I think they are a little higher than normal, but they are not excessive. And if you look at Illinois Basin, their stockpile typically is less than 30 days and it is running slightly, a bit more than 30 days. So I don't really think the stockpile issue is a significant issue for us only. I think we are closer to balance, even though there is probably some stockpile that gives us slightly greater than normal. So, it is the same amount as it was a year ago.

Mark Reichman – Madison Williams

Okay. And then it is just kind of from 50,000 feet level kind of question, but there was an article in the Wall Street Journal last Friday, I think it was addressing utilities decisions to switch to gas versus coal and looking at plants that – coal-fired plants that don't justify the expense of the emissions reduction equipment. And I was just wondering how do you see the development of coal-fired generation advancing, and kind of what that means for industry growth?

Brian Cantrell

Now, there are – and I can't give you the exact number, but there are several plants are in final phase of construction. There are still some that are being constructed, for example, Duke Energy in particular and AP [ph] I believe has a plant that is under construction. So there are some new plants under construction. We are seeing some of the very old plants in the coal side, that are going off line, and you are reading some about that. But when you really look at how much coal burn those plants actually account for, it is really not that significant.

I think on the coal to gas switching, if gas stays at the 450 or lower level, then we're going to have some of that. We don't anticipate the switching to be as much this year as it was last year. And I think longer term; nobody really believes that you are going to see 450 gas. I mean I was actually encourage to see Chesapeake talk, and they had a conference last week where they are even talking $6 to $6.50 gas. It is the first time I have ever heard them come up with that expectation, which is a level that I believe is realistic. In other words, for the shale plays to have economic terms they got to have $6 to $6.50 gas and it is nice to hear Chesapeake confirm that as well.

So longer-term I really don't anticipate coal to gas being a significant deterrent to coal burn, and whether utilities will step up and build new coal fired power plants that are yet to be seen.

Mark Reichman – Madison Williams

Okay, great. Thank you. That is very helpful.

Joe Craft

Thanks Mark.

Operator

Your next question comes from the line of Joel Havard with Hilliard Lyons. You may proceed.

Joel Havard – Hilliard Lyons

Thank you. Good morning everybody.

Joe Craft

Hi Joel.

Joel Havard – Hilliard Lyons

Joe, can you elaborate please on your comments about the met opportunity?

Joe Craft

Essentially we have our operation at Mountain View, and we have the ability, obviously (inaudible) for a reason. So, it does produce some metallurgical products. So effectively we sold out our unsold position at their Mountain View operation. In the export market, it will go to several customers around the globe, and it basically started April 1, and it will continue almost on a ratable basis through the first quarter of 2011.

We do expect that the metallurgical markets will continue to have some strength for at least another year of two. So we're hopeful that we could continue selling coal into that market for the next fiscal year as well, even though we have no contractual obligation to do so.

Joel Havard – Hilliard Lyons

So, this is a like a – I guess, like a brokered contract, there are forming it out internationally. It is about a million tons through the next 12 months, and is pricing index kind of fixed now?

Joe Craft

It is a fixed price for the year.

Joel Havard – Hilliard Lyons

I don't suppose you want to share that?

Joe Craft

It is similar to what you are reading in the press. For us, it nets back to the mine in the $100 range per ton.

Joel Havard – Hilliard Lyons

Okay, perfect. All right. And then Brain, I think I am off here on my scheduling, is Tunnel Ridge, let me ask the question more directly, what is the timeline between now and say into or through 2011 with Tunnel Ridge? I've got it pushed back too far I believe?

Brian Cantrell

Well, the production that Joe referred to that is occurring now, it is development production as we set up the longwall. The longwall is still scheduled to begin operation late in 2011, probably in the November timeframe.

Joel Havard – Hilliard Lyons

Okay, and as River View kind of wraps up, and you shift into Tunnel Ridge for next year, where is the inflection in CapEx, will we start to ramp back up or in fact does it kind of go sideways now at this bigger development behind you?

Brian Cantrell

I don’t know that you will necessarily see an inflection point. Obviously there is a significant amount that has already occurred at Tunnel Ridge, and we will complete that build out as we previously discussed. At River View, you know the capital that is really remaining is when we bring the seventh and eighth, the significant capital that is remaining is when we bring the seventh and eighth units into production. And as we talked about previously, those are on hold as we continue to evaluate supply and demand in the market.

Joel Havard – Hilliard Lyons

Okay, and lastly on River View, I think originally it was anticipated that the sixth unit would be up in June, is that already up?

Joe Craft

It is scheduled to come up any time now.

Joel Havard – Hilliard Lyons

Okay, all right. Guys that is great. Thank you very much. Good luck.

Joe Craft

Thank you.

Brian Cantrell

Thank you.

Operator

Your next question comes from the line of Ronald Londe with Wells Fargo Securities. You may proceed.

Ronald Londe – Wells Fargo Securities

Thanks. My question is around the met coal situation and were answered, but I have one question surrounding that. From the standpoint of that million tons, do you expect any variation in the next four quarters or you know from a modeling standpoint should we use 250,000 tons a quarter or how should we look at that?

Brian Cantrell

Yeah, I mean it is ratable over the 12-month beginning in April.

Joe Craft

Yes, we have – that is assuming railroads perform, the vessels show up. But yes, and that is the expectation for both us and the customer.

Ronald Londe – Wells Fargo Securities

In general, also what is your outlook for expenses going forward, you know, for the quarter there were up about 7% versus last year and 9% sequentially, especially in the Illinois Basin, do you see anything unusual in the future from an expense standpoint to which you are referring?

Joe Craft

Well, on a consolidated basis they were up 4.6% compared to 2009 quarter, and 3.7% sequentially, which I think our range, when we discussed expectations on costs that the fourth quarter 2009 conference call, we said 3% to 5%. So, it is staying within our anticipated range on a consolidated basis and I think looking forward, that range will still hold for a year.

Joe Craft

And one of the things, you know there is some ramp up at River View, and there is some cost there that hopefully once that number will stabilize, we will get more than what we saw in the first quarter, but we still add some inventory – our inventory position in River View is such that, a lot of our costs that are flowing through in the first quarter were really part of our ramp up in the third quarter of 2009.

So, now as that inventory starts rolling forward, we should see a little bit lower cost at River View. The other thing that has impacted us, we have had some lower yields at a couple of our operations, and one of those in particular, we believe we have gotten through that geology. So we're hoping to see a little better production.

Now with the incident that just occurred, the step up in MSHA regulation, we may give some of that back, but we believe we have taken into consideration all factors with the exception of the April 5 incident, and what the regulators are going to do and our estimate. And I think relative to that, it still would be within the range. We don't expect there will be significant impact this year, which you just never know with the way the regulators may react to that incident or any laws that might change.

Brian Cantrell

And adding on to that, we are continuing to assess any potential impact of the healthcare legislations, in particular around the Black Lung [ph] provisions. Our actuaries are in the middle of that study as we speak, but to Joe’s point, taking all of those things into consideration, I still believe the 3% to 5% increase on a consolidated basis over last year will hopefully still hold.

Ronald Londe – Wells Fargo Securities

Thank you.

Operator

Your next question comes from the line of David Martin with Deutsche Bank. You may proceed.

David Martin – Deutsche Bank

Good morning, thanks.

Joe Craft

Hi David.

Brian Cantrell

Good morning.

David Martin – Deutsche Bank

I wanted to start with just a couple of additional questions on the met coal business. What were the met coal sales in the first quarter? And how would they compare to the fourth quarter?

Joe Craft

The fourth quarter of ‘10 or the fourth quarter ’09?

David Martin – Deutsche Bank

Of ’09, sorry.

Brian Cantrell

I think a lot of last year, last year around 250,000 tons I believe for the year. So that is 75,000 – 60,000 to 75,000 per quarter which run into the first quarter of 2010.

David Martin – Deutsche Bank

So the first quarter volumes would have been pretty consistent with the fourth quarter of last year?

Joe Craft

Yes.

David Martin – Deutsche Bank

Yes, okay. And then on the –

Joe Craft

That's going to step up now with this increased commitment we just made.

Brian Cantrell

So about 250,000 tons a quarter.

David Martin – Deutsche Bank

Yes, okay. And then on the million tons in the forward fiscal year, I know you mentioned they're all export sales to various regional markets. But could you give us maybe a bit more color on where the concentration of these customers may be? How much is NAFTA, LATAM versus Europe and Asia??

Joe Craft

I think maybe about a third South America and two thirds Asia.

David Martin – Deutsche Bank

Okay.

Joe Craft

And you are correct, the met tons at first quarter were right at 170,000 tons.

David Martin – Deutsche Bank

170,000 tons in the first quarter?

Joe Craft

So that would – yes.

David Martin – Deutsche Bank

Okay. And then on the capital budget, could you just give us an update on the total budget for both River View and Tunnel Ridge and the amount that has been spent?

Joe Craft

River View approved levels right at $270 million, and we paid $209 million through this first quarter, and Tunnel Ridge we are right at $300 million and we have expended $120 million through the first quarter.

David Martin – Deutsche Bank

Okay, thank you very much. Good luck.

Joe Craft

Thank you.

Operator

Your next question comes from the line of Paul Forward with Stifel Nicolaus. You may proceed.

Paul Forward – Stifel Nicolaus

Good morning.

Joe Craft

Good morning.

Paul Forward – Stifel Nicolaus

On the net tons, about a million tons a year, can you talk about – is there any domestic appetite for that coal at all as a met coal or does it really exclusively need to go the export market?

Joe Craft

We have talked to people on the domestic front, and when I say domestic some of that may include Canada, we know it's not domestic, but trying to move in this part of the world versus say North America versus Asia and South America, however, the offer that could benefit or the opportunity that came to us sooner was in fact the export market. So it could move into North America, however, we do have, we just had the opportunity. So, we went ahead and took advantage of it.

Paul Forward – Stifel Nicolaus

And can you talk a little bit about the just the logistics of how you're moving that coal out and what your options are available to you on the transportation side for Mountain View?

Joe Craft

We got a direct train load out there in Maryland. It goes straight to the port in Baltimore.

Paul Forward – Stifel Nicolaus

Okay.

Joe Craft

On the vessel.

Paul Forward – Stifel Nicolaus

And then maybe also if you look at the quarter, out of northern App you actually had costs go down sequentially, and that sounded like even, it went down sequentially even though you had a little bit more met coal moving out the quarter and also overall volumes were down. Can we expect that cost per ton out of Northern App to kind of hold at that level like you did in the first quarter, is that going to go up as you do more, a greater share of your output goes to the met market?

Joe Craft

I would say it’ll go up as we do a greater share, both for quality reasons as well as sales related expenses.

Brian Cantrell

And fourth-quarter calls also, we had longwall moves in the fourth quarter that impacted cost as well. So those will occur periodically and you may see impact from that period to period.

Paul Forward – Stifel Nicolaus

Well, now on the sales related expenses side, can you give us a rough number as like, you know, revenues go up a dollar per ton because you're moving it to the met markets, then is there a number that we should think about in terms of the, you know, number of cents?

Brian Cantrell

10% in West Virginia.

Paul Forward – Stifel Nicolaus

Okay.

Brian Cantrell

Roughly, variable back to severance taxes and royalties.

Paul Forward – Stifel Nicolaus

All right. Appreciate it. Thanks.

Brian Cantrell

Thanks Paul.

Operator

Your next question comes from the line of Noah Lerner with Hartz Capital. You may proceed.

Noah Lerner – Hartz Capital

Thank you. First off, I just want to say wow, great quarter. Just real quick question, in prior quarters and mostly last year you were talking about deferred volumes from 2009 into 2010. And I'm just curious if that has all corrected itself yet, and how much of that is the increase in volume that we did see in the first quarter or is that still an issue that has to work its way through during the year?

Joe Craft

Most of that has resolved itself. We did have some transportation delays in the first quarter. So as good as the first quarter was, it could have been better. So there still is some volume we believe that we worked that out to where that volume will be made up in 2010, but it will basically take the rest of the year to work out that and that's probably in the 250,000 ton range, something like that. It is plus or minus a little bit.

Noah Lerner – Hartz Capital

Yes, good. And second question I had is, and you just alluded to it that there had been some transportation issues. When you mentioned transportation issues, is that logistics or just that the purchasers are saying hold off for a while?

Joe Craft

It's more logistics.

Noah Lerner – Hartz Capital

Okay, can you give any further description of what those problems are because there is not enough coal cars in the trains – that's okay.

Joe Craft

Yes.

Noah Lerner – Hartz Capital

Great, thanks.

Brian Cantrell

There was also weather issues in the first quarter that impacted Central App, but it really, it comes down to logistics in the place in the train sets.

Noah Lerner – Hartz Capital

Okay, great. Thanks a lot.

Joe Craft

Thanks Paul.

Operator

(Operator instructions) Your next question comes from the line of Norman Kramer with Kramer Investments. You may proceed.

Norman Kramer – Kramer Investments

Good morning, Joe. I had a couple of more questions on met coal also. Could you expand a little on this, and I'm wondering if your reserves at Mountain View have sufficient tonnage of the right type of coal. That if the pricing were good that this might continue on into the future years. And the second question is whether you think that any of your other properties might have potential for met coal?

Joe Craft

Our volume at Mountain View is restricted more by our contractual position with Dominion versus the quality coal that the mine itself can produce. That contract goes through 2012 into ’13. So there is a commitment there that does I guess cap our volume as to what our volume expectations can be, and relative to our other operations, we have shipped some coal out of east Kentucky and to the PCI [ph] market, and we will continue to look at opportunities in that market, and compare those against sales either into the industrial market or into the steam market. The price differential is not as great in the PCI market as it has been directly into the met market relative to the steam market. But we’ll look at opportunities there as well, but as far as pure met coal, Mountain View is our only operation, which can produce met coal and/or met coal blend that we have.

Norman Kramer – Kramer Investments

Okay. Thank you for that. It was helpful.

Operator

At this time there are no further questions. I will turn the call back to Brian Cantrell for closing remarks.

Brian Cantrell

Thanks everyone again for joining us today. We appreciate your continued support and interest in both ARLP and AHGP, and we look forward to visiting again soon. Thank you.

Operator

Ladies and gentlemen that concludes today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.

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