1. ALLIANCE RESOURCE PARTNERS, L.P. Ticker: ARLP Last Price: Fair Value: $50.30 Market Cap: 1.60 B Yield: 7.3% Recommendation: BUY

2. Investment Theme Industry – Coal Production Coal - main fuel source for electricity generation Stable commodity price – 2009 coal price fluctuation +/- 10% Utility companies – Energy coal generation infrastructure mainly established in U.S.

3. Why Alliance Resource? Long-term sales contracts High return – 7.3% yield Consistent distribution growth Strong balance sheet and liquidity Exceptional management performance Well geographically positioned within the U.S.

4. Overview Oklahoma based company founded in 1971. Engage in marketing and production of coal. The company has grown through acquisitions and internal development Fifth largest coal producer in the eastern part of the United States.

5. Revenue Total Revenue for 2009 was $1.23 billion. Company Revenue from Locations: Illinois: 69%, C. Appalachia: 19%, N. Appalachia: 12% Company Revenue distribution Revenue comes principally from sales of low and high sulfur coal, second income comes from transportation from mining complex to the delivery point and finally 2% comes from machinery rentals or services to third parties.

6. Competitive Advantages Long-term contracts The company secures about 90 to 95% of its revenues through long-term contracts Production management The company created a division called “Department Calendar”. This department focus on tracking important bid renewal dates. High yield Alliance Resources paid dividends the highest dividends in the industry, 7.3% yield.

7. Risk With the current economic uncertainty some of ARLP’s costs could outweigh its short-term benefits Dollar valuation could affect negatively coal prices, so ARLP’s revenue could decrease. Long-term contracts could mean a prolonged price suppression, which could lead to losses if operations costs increase unexpectedly.

8. Key Competitors ALLIANCE RESOURCE PARTNERS, L.P. VS.

9. Financial Analysis Growth ARLP revenue growth on 2009 was 6.44%. The growth was result of increase in operating income and decrease of operating expenses. Profitability ARLP’ ROE of 60% is the highest in the industry. Healthy Free Cash flow subsidize acquisitions and new investments. Financial Health Quick ratio of 1.43 shows a liquid company that is able to pay its obligations and finance their investments.

10. Valuation Discount Cash flow model Assumptions for Alliance Resource Partner Current Stock Price$41.81 Shares Outstanding (mil)36,717 Next year’s free cash flow (mil) = $151,601 Perpetuity growth rate (g) = 3.5% Discount rate (R) = 9% FCF growth rate = 7% first year, 3.95% next years Per share value = $50.30

11. Technical Analysis Up Trend Channel Support on channel Bouncing on 2 nd SD Momentum crossing 0 Stochastic approaching oversold area On chart Bollinger bands are showing an entry point on bouncing the 2 nd standard deviation which also follows an uptrend channel. Volume in getting up after a smooth decline. Momentum entry point starts after momentum line crosses 0. Stochastic is at 45% and it is approaching oversold area at 25%.

12. Recommendation Buy 200 Shares of ARLP at any price below 43.74 which is 15% below the stock fair value of $50.30. Sell -2 ARLP 100 SEP 45 CALL as hedge strategy Exit points: Stop: $38.63 Before SEP 10, 2010 Target: $50.30 On Sep 10, 2010 Target: Any price above $45.02

13. Trade Simulation

14. Thank You Any Questions…?