UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 10, 2004
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COMMISSION FILE NO.: 0-26823
ALLIANCE RESOURCE PARTNERS, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 73-1564280
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1717 SOUTH BOULDER AVENUE, SUITE 600, TULSA, OKLAHOMA 74119
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
(918) 295-7600
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
In accordance with General Instruction B.2. of Form 8-K, the following
information and the exhibits referenced therein is being furnished pursuant to
Item 2.02 of Form 8-K and is not deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, is not subject to the
liabilities of that section and is not deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended.
On February 11, 2004, Webster County Coal, LLC's ("Webster County
Coal") Dotiki mine was temporarily idled for a period of twenty-seven calendar
days following the occurrence of a mine fire that originated with a diesel
supply tractor (the "Dotiki Fire Incident"). As a result of the firefighting
efforts of the Mine Safety and Health Administration, the Kentucky Department of
Mines and Minerals, and Webster County Coal personnel, Dotiki successfully
extinguished the fire and totally isolated the affected area of the mine behind
permanent barriers. Initial production resumed on March 8, 2004. As previously
advised, Alliance Resource Partners, L.P. (the "Partnership") has commercial
property insurance that provides coverage for damage to property destroyed,
interruption of business operations, including profit recovery, and expenditures
incurred to minimize the period and total cost of disruption to operations.
On September 10, 2004, the Partnership filed a third and final proof of
loss with the applicable insurance underwriters reflecting a settlement (the
"Settlement") of all expenses, losses and claims incurred by Webster County Coal
and other affiliates arising from or in connection with the Dotiki Fire Incident
(the "Insurance Claim") in the aggregate amount of $27.0 million, inclusive of a
$1.0 million self-retention, a $2.5 million deductible (collectively, the
"Insurance Deductibles") and 10% co-insurance (the "Co-Insurance"). The
Insurance Deductibles and Co-Insurance have been allocated on a pro-rata basis
to each of the three areas of insurance recoveries discussed below. Previously,
Webster County Coal had received two partial advance payments of $4.5 million
and $3.6 million, respectively, net of the Insurance Deductibles and
Co-Insurance. The accounting for these two net partial advance payments in the
aggregate amount of $8.1 million and the final net payment of $13.05 million,
exclusive of the Insurance Deductible and Co-Insurance, are subject to the
accounting methodology described below. Specifically, the Partnership has
evaluated and accounted for the insurance recoveries in the following areas:
1. Expenses incurred as a result of the fire - The Partnership
incurred extra expenses, expediting expenses, and other costs
associated with extinguishing the fire in an aggregate amount
of approximately $7.1 million. With application of $5.6
million of the insurance recovery proceeds, the Partnership
has recorded net expenses of approximately $1.5 million.
2. Damage to Dotiki mine property - The Partnership incurred
damage to Dotiki's mine property (exclusive of any amounts
relating to matters discussed in 1. above) of approximately
$1.2 million, which property had a net book value of
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$138,000. This net book amount was written off in the first
quarter of 2004, and a corresponding amount was recorded in
the first quarter of 2004 as an estimated insurance recovery.
Based on discussions with the underwriters culminating in the
Settlement, the Partnership will also record a net gain of
approximately $785,000, reflecting the amount that the
allocated insurance proceeds will exceed the net book value of
the damaged property.
3. Dotiki mine business interruption costs and extra expense -
Based on the negotiations with the underwriters leading to the
Settlement, the Partnership has recorded a net gain of
approximately $14.4 million for the recovery of business
interruption costs and extra expenses stemming from the Dotiki
Fire Incident.
Pursuant to the accounting methodology described above, the Partnership
(a) has recorded, as an offset to operating expenses, approximately $2.9
million, $0.2 million, and $2.8 million, during the first, second, and third
quarters of 2004, respectively, and (b) in the third quarter of 2004, has
recorded a combined net gain of approximately $15.2 million for damage to
property destroyed, interruption of business operations (including profit
recovery), and extra expenses incurred to minimize the period and total cost of
disruption to operations.
On September 13, 2004, the Partnership announced via press release the
final settlement of the Insurance Claim. A copy of the Partnership's press
release is hereto as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Alliance Resource Partners, L.P. press release dated
as of September 13, 2004.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALLIANCE RESOURCE PARTNERS, L.P.
By: Alliance Resource Management GP, LLC,
its managing general partner
By: /s/ Joseph W. Craft III
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Joseph W. Craft III
President and Chief Executive Officer
Date: September 13, 2004
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