I think the current quarter is farily lousy. The obvious reason being that ARLP is not exposed to the spot market and they are unable to capitalize on the current increase in that market.
Management is saying, however, not to look at the immediate results. Rather, to look at the longer term. They are promising a 6 to 8% increase in quarterly distributions over the next quarters (sequentially, not annually, so this is on the order of 25 to 32% per year). They are also committing to a 25% to 35% increase in coal pricing in 2009 and 40 to 50% increase in 2010. They are increase their uncommitted tonnage (i.e. open to spot market) to 9% and 25% for 2009 and 2010. This is a tacit admission that their currrent pricing strategy is in error.
So, where do we go from here? I suppose I will hang in there for another quarter and see if they do increase the distribution.