What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-07 · 71 added, 64 removed, 248 unchanged (35% of the section changed)

27 unchanged sentences

This commitment represents an interest of approximately 5.0% in Gavin Generation (based on total commitments).

On August 6, 2025, we funded $22.1 million of our $25.0 million capital commitment.

As of September 30, 2025, we have funded $22.1 million of our $25.0 million capital commitment.

For more information about the Gavin Generation investment, please read “Item 1.

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Financial Statements (Unaudited) — Note 3 – Variable Interest Entities” of this Quarterly Report on Form 10-Q for more information on AllDale III.

● Coal Royalties reportable segment includes substantially all of our coal mineral resources and the majority of our coal mineral reserves owned or leased by Alliance Resource Properties that are (a) leased to certain of our mining complexes in both the Illinois Basin Coal Operations and Appalachia Coal Operations reportable segments or (b) located near our operations and external mining operations.

● Coal Royalties reportable segment includes substantially all of our coal mineral resources and the majority of our coal mineral reserves owned or leased by Alliance Resource Properties that are (a) leased to certain of our mining complexes in the Illinois Basin and Appalachia Basin or (b) located near our operations and external mining operations.

● Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC, Bitiki KY, LLC, which holds our crypto-mining activities, our non oil & gas equity and debt investments, Wildcat Insurance, LLC, which assists the ARLP Partnership with its insurance requirements, AROP Funding, LLC (“AROP Funding”) and Alliance Resource Finance Corporation (“Alliance Finance”), and other miscellaneous activities.

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Financial Statements (Unaudited)—Note 3 – Variable Interest Entities, Note 7 – Investments, and Note 8 – Long-Term Debt” of this Quarterly Report on Form 10-Q for more information on our investments in Infinitum, Ascend, and NGP ET IV as well as AROP Funding and Alliance Finance.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Consolidated Information

Three Months Ended

September 30,

Increase (Decrease)

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Total Revenues

Total revenues for the three months ended June 30, 2025 (“2025 Quarter”) decreased 7.7% to $547.5 million compared to $593.4 million for the three months ended June 30, 2024 (“2024 Quarter”) primarily as a result of reduced coal sales prices and lower transportation revenues, partially offset by increased coal sales volumes.

Total revenues for the three months ended September 30, 2025 (“2025 Quarter”) decreased 6.9% to $571.4 million compared to $613.6 million for the three months ended September 30, 2024 (“2024 Quarter”) primarily due to lower coal sales price per ton and reduced transportation revenues, partially offset by increased coal sales volumes.

● Coal sales decreased to $511.6 million for the 2025 Quarter compared to $532.6 million for the 2024 Quarter.

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Coal sales prices decreased by 7.5% as a result of lower domestic price realizations at several mines resulting from the continued roll-off of higher-priced legacy contracts.

Coal sales volumes improved primarily driven by increased tons sold from our Hamilton and River View mines, partially offset by lower production levels at Tunnel Ridge due to challenging mining conditions.

Higher coal sales volumes was primarily driven by increased tons sold from our Hamilton and River View mines, partially offset by reduced coal sales volumes at Tunnel Ridge due to timing of shipments.

● Transportation revenues and expenses were $7.7 million and $24.6 million for 2025 and 2024 Quarters, respectively.

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Segment Adjusted EBITDA Expense decreased 8.8% to $359.3 million primarily related to our coal operations which decreased 7.7% to $356.7 million, as a result of lower per ton costs, partially offset by higher coal sales volumes.

Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 9.0% to $41.27 per ton sold in the 2025 Quarter compared to $45.37 per ton in the 2024 Quarter, primarily due to an increased sales mix of tons from lower cost operations, improved recoveries at our River View and Hamilton mines and reduced longwall move days at Hamilton as well as the following per ton cost decreases:

● Labor and benefit expenses per ton produced, excluding workers’ compensation, decreased 3.2% to $13.25 per ton in the 2025 Quarter from $13.69 per ton in the 2024 Quarter.

Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 11.1% to $40.99 per ton sold in the 2025 Quarter compared to $46.11 per ton in the 2024 Quarter, primarily due to increased production and recoveries at several mines, including our Tunnel Ridge mine, and reduced longwall move days at our Hamilton operation as well as the following per ton cost decreases:

● Labor and benefit expenses, excluding workers’ compensation, per ton produced decreased 11.3% to $12.90 per ton in the 2025 Quarter from $14.54 per ton in the 2024 Quarter.

The decrease of $1.64 per ton was primarily due to lower direct labor costs at several mines.

● Material and supplies expenses per ton produced decreased 12.1% to $14.01 per ton in the 2025 Quarter from $15.94 per ton in the 2024 Quarter.

The decrease of $2.12 per ton produced primarily reflects decreases of $0.79 per ton for roof support, $0.65 per ton in longwall subsidence expense, $0.37 per ton for contract labor used in the mining process, and $0.18 per ton for safety related materials and supplies .

The decrease of $1.93 per ton produced primarily reflects decreases of $0.82 per ton for roof support, $0.36 per ton in longwall subsidence expense, $0.24 per ton for various preparation plant expenses, and $0.22 per ton for safety related materials and supplies .

● Maintenance expenses per ton produced decreased 16.3% to $4.73 per ton in the 2025 Quarter from $5.65 per ton in the 2024 Quarter.

The decrease of $0.92 per ton produced was primarily a result of lower maintenance costs at several mines.

● Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes decreased $0.43 per produced ton sold in the 2025 Quarter compared to 2024 Quarter primarily as a result of lower price realizations and a favorable mix of tons sold that were mined in states without severance taxes.

Segment Adjusted EBITDA Expense per ton decreases were partially offset by the following increase:

● Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes increased $0.48 per produced ton sold in the 2025 Quarter compared to 2024 Quarter primarily as a result of an unfavorable mix of tons sold that were mined in states with severance taxes.

Depreciation, depletion and amortization

Depreciation, depletion and amortization expense increased to $76.3 million for the 2025 Quarter compared to $66.5 million for the 2024 Quarter primarily as a result of increased coal sales volumes.

Change in fair value of digital assets

The change in the fair value of our digital assets increased by $16.6 million for the 2025 Quarter compared to the 2024 Quarter reflecting the movement in the price of bitcoin.

Impairment loss on investments

During the 2025 Quarter, we recorded a $25.0 million impairment on our equity investment in Ascend as a result of Ascend’s recent recapitalization through a convertible note financing completed during the 2025 Quarter.

Please read “Item 1.

Financial Statements (Unaudited)—Note 7 – Investments” of this Quarterly Report on Form 10-Q for more information.

Depreciation, depletion and amortization expense increased to $78.2 million for the 2025 Quarter compared to $73.0 million for the 2024 Quarter primarily as a result of new mine infrastructure and longwall equipment placed in service during the 2025 Quarter at our Hamilton and Tunnel Ridge operations.

Equity method investment income (loss)

Equity method investment income was $4.5 million in the 2025 Quarter compared to a loss of $2.3 million in the 2024 Quarter.

The increase was primarily due to an increase in the value of our share of the net assets of the companies in which we hold interests.

Net income attributable to ARLP

Net income attributable to ARLP for the 2025 Quarter was $59.4 million, or $0.46 per basic and diluted limited partner unit, compared to $100.2 million, or $0.77 per basic and diluted limited partner unit, for the 2024 Quarter as a result of lower revenues, increased depreciation, and the impairment loss on investments in the 2025 Quarter, partially offset by an increase in the fair value of our digital assets.

Net income attributable to ARLP for the 2025 Quarter increased 10.2% to $95.1 million, or $0.73 per basic and diluted limited partner unit, compared to $86.3 million, or $0.66 per basic and diluted limited partner unit for the 2024 Quarter as a result of reduced operating expenses and higher investment income, partially offset by lower coal sales.

Segment Adjusted EBITDA

Our 2025 Quarter Segment Adjusted EBITDA decreased $19.7 million to $182.3 million from the 2024 Quarter Segment Adjusted EBITDA of $202.0 million.

Our 2025 Quarter Segment Adjusted EBITDA increased 7.8% to $207.2 million from the 2024 Quarter Segment Adjusted EBITDA of $192.3 million.

Segment Information

Three Months Ended

September 30,

Increase (Decrease)

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Intercompany coal royalties

Other revenues

Segment Adjusted EBITDA Expense

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Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 8.1% to $105.4 million in the 2025 Quarter from $114.6 million in the 2024 Quarter.

The decrease of $3.8 million was primarily attributable to lower prices and higher operating expenses, partially offset by increased sales volumes.

Coal sales price per ton decreased by 10.1% compared to the 2024 Quarter as a result of lower domestic price realizations at several mines in the region.

Sales volumes increased by 15.2% compared to the 2024 Quarter due primarily to increased tons sold from our Hamilton and River View mines.

The decrease of $9.2 million was primarily attributable to lower average coal sales prices and higher operating expenses, partially offset by increased sales volumes.

Coal sales price per ton decreased by 9.9% compared to the 2024 Quarter as a result of lower domestic price realizations across the region.

Tons sold increased by 10.8% compared to the 2024 Quarter due primarily to increased volumes from our Hamilton and River View mines.

Segment Adjusted EBITDA Expense increased 3.7% to $233.8 million in the 2025 Quarter from $225.5 million in the 2024 Quarter, primarily as a result of increased sales volumes, partially offset by lower operating expenses per ton.

Segment Adjusted EBITDA Expense per ton for the 2025 Quarter decreased by 7.1% compared to the 2024 Quarter due primarily to lower maintenance and materials and supplies costs at several mines in the region, improved recoveries at our River View and Hamilton mines and reduced longwall move days at Hamilton.

Appalachia Coal Operations – Segment Adjusted EBITDA decreased 35.1% to $29.4 million for the 2025 Quarter from $45.3 million in the 2024 Quarter.

The decrease of $15.9 million was primarily attributable to lower coal sales, which decreased 21.6% to $141.6 million in the 2025 Quarter from $180.7 million in the 2024 Quarter, partially offset by reduced operating expenses.

The decrease in coal sales reflects lower coal sales volumes and price realizations.

Tons sold decreased by 16.8% in the 2025 Quarter compared to the 2024 Quarter primarily as a result of lower production levels at Tunnel Ridge due to challenging mining conditions.

Average coal sales price per ton decreased by 5.8% compared to the 2024 Quarter primarily due to reduced domestic pricing from our Tunnel Ridge and MC Mining operations, partially offset by a greater mix of higher priced sales tons from MC Mining and Mettiki during the 2025 Quarter.

Segment Adjusted

EBITDA Expense decreased 17.5% to $112.8 million in the 2025 Quarter from $136.8 million in the 2024 Quarter due primarily to reduced volumes.

Oil & Gas Royalties – Segment Adjusted EBITDA decreased to $29.9 million in the 2025 Quarter compared to $31.3 million in the 2024 Quarter due to lower average sales price per BOE, which decreased 9.6%, partially offset by higher volumes, which increased 7.7%.

Coal Royalties – Segment Adjusted EBITDA increased to $11.8 million in the 2025 Quarter compared to $10.0 million in the 2024 Quarter due to higher royalty tons sold to the Partnership’s mining subsidiaries and lower selling expenses.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Segment Adjusted EBITDA Expense per ton decreased by 6.4% compared to the 2024 Quarter due primarily to increased production in the region, improved recoveries at our River View and Hamilton mines and reduced longwall move days at Hamilton.

Appalachia Coal Operations – Segment Adjusted EBITDA increased 44.2% to $54.1 million for the 2025 Quarter from $37.5 million in the 2024 Quarter.

The increase of $16.6 million was primarily attributable to reduced operating expenses, partially offset by lower coal sales.

The decrease in coal sales primarily reflects lower coal sales volumes, which decreased by 13.3% in the 2025 Quarter due to the timing of shipments from our Tunnel Ridge operation.

Partially offsetting lower coal sales volumes, coal sales price per ton increased by 3.1% compared to the 2024 Quarter primarily due to higher domestic pricing from each operation and an increased sales mix of higher priced tons from our MC Mining and Mettiki operations in the 2025 Quarter.

Segment Adjusted EBITDA Expense decreased 23.4% to $120.8 million in the 2025 Quarter from $157.8 million in the 2024 Quarter due primarily to reduced sales volumes and per ton expenses.

Segment Adjusted EBITDA Expense per ton for the 2025 Quarter decreased by 11.7% compared to the 2024 Quarter due

to lower labor costs, higher recoveries and improved mining conditions across the region and increased productivity at Tunnel Ridge.

Oil & Gas Royalties – Segment Adjusted EBITDA decreased to $27.7 million in the 2025 Quarter compared to $28.7 million in the 2024 Quarter due to lower average sales price per MBOE, which decreased 10.5%, partially offset by higher volumes.

Oil & Gas Royalty volumes increased to 899 MBOE in the 2025 Quarter compared to 864 MBOE in the 2024 Quarter.

Coal Royalties – Segment Adjusted EBITDA increased to $17.1 million in the 2025 Quarter compared to $11.1 million in the 2024 Quarter due to higher royalty tons sold and average royalty rates per ton received from the Partnership's mining subsidiaries.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Consolidated Information

Six Months Ended

Nine Months Ended

September 30,

Increase (Decrease)

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Total Revenues

Total revenues for the six months ended June 30, 2025 (“2025 Period”) decreased 12.6% to $1.09 billion compared to $1.25 billion for the six months ended June 30, 2024 (“2024 Period”) primarily due to lower coal sales and transportation revenues.

● Coal sales decreased to $954.0 million for the 2025 Period compared to $1.07 billion for the 2024 Period.

Total revenues for the nine months ended September 30, 2025 (“2025 Period”) decreased 10.7% to $1.66 billion compared to $1.86 billion for the nine months ended September 30, 2024 (“2024 Period”) primarily due to lower coal sales and transportation revenues.

● Coal sales decreased to $1.47 billion for the 2025 Period compared to $1.61 billion for the 2024 Period.

The decrease was attributable to lower average coal sales prices, which reduced coal sales by $138.5 million and lower tons sold, which reduced coal sales by $3.1 million.

Coal sales prices decreased by 9.2% as a result of lower domestic price realizations at several mines resulting from the continued roll-off of higher-priced legacy contracts and reduced export price realizations from our MC Mining and Mettiki mines.

Coal sales volumes decreased due primarily to lower production levels at Tunnel Ridge due to challenging mining conditions.

Coal sales prices decreased by 8.6% as a result of lower domestic price realizations at several mines due to the continued roll-off of higher-priced legacy contracts and reduced export price realizations from our MC Mining and Mettiki mines.

● Transportation revenues and expenses were $26.5 million and $82.1 million for 2025 and 2024 Periods, respectively.

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Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA Expense decreased 3.0% to $699.6 million primarily related to our coal operations which decreased 4.6% to $678.1 million, as a result of lower coal sales volumes and lower per ton costs.

Segment Adjusted EBITDA Expense decreased 5.1% to $1.06 billion primarily related to our coal operations which decreased 5.6% to $1.03 billion, as a result of lower per ton costs.

Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 5.5% to $41.63 per ton sold in the 2025 Period compared to $44.04 per ton in the 2024 Period, primarily due to an increased sales mix of tons from lower cost operations, higher recoveries from several mines and fewer longwall move days at our Hamilton operation as well as the following per ton cost decreases:

● Labor and benefit expenses, excluding workers’ compensation, per ton produced decreased 3.0% to $13.12 per ton in the 2025 Period from $13.52 per ton in the 2024 Period.

The decrease of $0.40 per ton was primarily due to lower direct labor costs at several mines.

● Material and supplies expenses per ton produced decreased 11.5% to $13.80 per ton in the 2025 Period from $15.59 per ton in the 2024 Period .

The decrease of $1.73 per ton produced primarily reflects decreases of $0.75 per ton for roof support, $0.46 per ton for contract labor used in the mining process, and $0.37 per ton in longwall subsidence expense .

The decrease of $1.79 per ton produced primarily reflects decreases of $0.76 per ton for roof support, $0.36 per ton in longwall subsidence expense, and $0.35 per ton for contract labor used in the mining process .

● Maintenance expenses per ton produced decreased 11.7% to $4.74 per ton in the 2025 Period from $5.37 per ton in the 2024 Period .

The decrease of $0.63 per ton produced was primarily a result of lower maintenance costs at several mines.

● Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes decreased $0.40 per produced ton sold in the 2025 Period compared to the 2024 Period primarily as a result of lower price realizations, partially offset by an unfavorable mix of tons sold that were mined in states with severance taxes.

● Outside coal purchases decreased to $19.0 million in the 2025 Period compared to $27.9 million in the 2024 Period.

The decrease in outside coal purchases benefited costs per ton in the 2025 Period since the cost of outside coal purchases is generally higher on a per ton basis than our produced coal.

Depreciation, depletion and amortization

Depreciation, depletion and amortization expense increased to $145.0 million for the 2025 Period compared to $132.0 million for the 2024 Period primarily as a result of increased coal sales volumes at our River View mine and additional assets placed in service at our Tunnel Ridge and Mettiki operations during the 2025 Period.

Depreciation, depletion and amortization expense increased to $223.2 million for the 2025 Period compared to $205.0 million for the 2024 Period primarily as a result of increased coal sales volumes at our River View mine and new mine infrastructure and longwall equipment placed in service at our Hamilton and Tunnel Ridge operations during the 2025 Period.

Impairment loss on investments

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Net income attributable to ARLP

Net income attributable to ARLP for the 2025 Period was $133.4 million, or $1.03 per basic and diluted limited partner unit, compared to $258.2 million, or $1.98 per basic and diluted limited partner unit, for the 2024 Period as a result of lower revenues, higher depreciation, and the impairment loss on investments in the 2025 Period, partially offset by reduced operating expenses.

Net income attributable to ARLP for the 2025 Period was $228.5 million, or $1.76 per basic and diluted limited partner unit, compared to $344.5 million, or $2.64 per basic and diluted limited partner unit, for the 2024 Period as a result of lower coal sales, higher depreciation, and the impairment loss on investments in the 2025 Period, partially offset by reduced operating expenses and higher investment income.

Segment Adjusted EBITDA

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Segment Information

Six Months Ended

Nine Months Ended

September 30,

Increase (Decrease)

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Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 7.3% to $345.8 million in the 2025 Period from $373.0 million in the 2024 Period.

The decrease of $17.9 million was primarily attributable to lower coal sales prices, partially offset by higher sales volumes and lower operating expenses.

The decrease of $27.2 million was primarily attributable to lower coal sales prices, partially offset by higher sales volumes.

Coal sales price per ton decreased by 8.2% compared to the 2024 Period as a result of lower domestic price realizations at several mines in the region.

Sales volumes increased by 6.2% compared to the 2024 Period due primarily to increased tons sold from our Hamilton and River View mines.

Segment Adjusted EBITDA Expense decreased 1.8% to $441.1 million in the 2025 Period from $449.3 million in the 2024 Period, primarily as a result of lower operating expenses per ton, partially offset by increased sales volumes.

Segment Adjusted EBITDA Expense per ton for the 2025 Period decreased by 5.5% compared to the 2024 Period due primarily to lower maintenance and materials and supplies costs at several mines in the region, improved recoveries at our River View and Hamilton mines and reduced longwall move days at Hamilton.

Segment Adjusted EBITDA Expense remained consistent with the 2024 Period as higher sales volumes were offset by lower operating expenses per ton.

Segment Adjusted EBITDA Expense per ton for the 2025 Period decreased by 5.8% compared to the 2024 Period due primarily to increased production and improved recoveries at our River View and Hamilton mines and reduced longwall move days at Hamilton.

Appalachia Coal Operations – Segment Adjusted EBITDA decreased 36.9% to $99.1 million for the 2025 Period from $157.1 million in the 2024 Period.

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The decrease in coal sales reflects lower coal sales volumes and price realizations.

Tons sold decreased by 19.9% in the 2025 Period compared to the 2024 Period primarily as a result of lower production levels at Tunnel Ridge due to challenging mining conditions.

Average coal sales price per ton decreased by 7.1% compared to the 2024 Period primarily due to reduced domestic pricing from our Tunnel Ridge and MC Mining operations and lower export price realizations from MC Mining and Mettiki, partially offset by a greater mix of higher priced sales tons from the MC Mining

and Mettiki operations during the 2025 Period.

Segment Adjusted EBITDA Expense decreased 8.2% to $233.4 million in the 2025 Period from $254.3 million in the 2024 Period due to reduced volumes partially offset by increased per ton operating expenses.

Tons sold decreased by 17.5% in the 2025 Period compared to the 2024 Period primarily as a result of lower production levels at Tunnel Ridge due to challenging mining conditions experienced prior to the recent transition to a new longwall district.

Average coal sales price per ton decreased by 3.5% compared to the 2024 Period primarily due to reduced domestic pricing from our Tunnel Ridge and MC Mining operations and lower export price realizations from MC Mining and Mettiki, partially offset by a greater mix of higher priced sales tons from the MC Mining and Mettiki operations during the 2025 Period.

Adjusted EBITDA Expense decreased 14.0% to $354.2 million in the 2025 Period from $412.1 million in the 2024 Period due to reduced volumes partially offset by increased per ton operating expenses.

Segment Adjusted EBITDA Expense per ton for the 2025 Period increased by 4.2% compared to the 2024 Period due to challenging mining conditions at the Tunnel Ridge mine.

Oil & Gas Royalties – Segment Adjusted EBITDA decreased to $87.5 million in the 2025 Period compared to $91.4 million in the 2024 Period due to lower average sales price per BOE, which decreased 6.9%, partially offset by higher volumes, which increased 3.1%.

Coal Royalties – Segment Adjusted EBITDA decreased to $21.2 million in the 2025 Period compared to $22.4 million in the 2024 Period due to reduced average royalty rates per ton received from the Partnership’s mining subsidiaries.

Coal Royalties – Segment Adjusted EBITDA increased 14.5% to $38.3 million in the 2025 Period compared to $33.5 million in the 2024 Period due to higher royalty tons, which increased 13.0%.

Reconciliation of Non-GAAP Financial Measures

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Unit Repurchase Program

We have $80.6 million remaining authorized under our unit repurchase program as of June 30, 2025.

No units were repurchased during the six months ended June 30, 2025.

We have $80.6 million remaining authorized under our unit repurchase program as of September 30, 2025.

No units were repurchased during the nine months ended September 30, 2025.

The program has no time limit and we may repurchase units from time to time in the open market or in other privately negotiated transactions.

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The decrease in cash provided by operating activities was primarily due to the decrease in net income adjusted for non-cash items and unfavorable working capital changes primarily related to trade receivables and other miscellaneous changes.

These decreases were partially offset by favorable working capital changes primarily related to inventories compared to the 2024 Period.

These decreases were partially offset by favorable working capital changes primarily related to inventories and accounts payable compared to the 2024 Period.

Net cash used in investing activities was $251.0 million for the 2025 Period compared to $337.4 million for the 2024 Period.

The decrease in cash used in investing activities was primarily due to the decrease in capital expenditures in the 2025 Period as compared to the 2024 Period.

This decrease was partially offset by a change in accounts payable and accrued liabilities during the 2025 Period.

The decrease in cash used in investing activities was primarily due to the decrease in capital expenditures and oil & gas reserves acquisitions in the 2025 Period as compared to the 2024 Period.

This decrease was partially offset by increased equity method investments and change in accounts payable and accrued liabilities during the 2025 Period.

Net cash used in financing activities was $298.8 million for the 2025 Period compared to $161.7 million for the 2024 Period.

The increase in cash used in financing activities was primarily attributable to proceeds from the issuance of our 2029 Senior Notes and from an equipment financing in the 2024 Period.

These increases were partially offset by reduced payments on long-term debt and reduced debt issuance costs in the 2025 Period.

These increases were partially offset by reduced payments on long-term debt and reduced distributions paid to partners in the 2025 Period and the payment of debt issuance costs in the 2024 Period.

Cash Requirements

Management anticipates having sufficient cash flow to meet 2025 cash requirements, including capital expenditures, scheduled payments on long-term debt, lease obligations, asset retirement obligation costs and workers’ compensation and pneumoconiosis costs, with our June 30, 2025 cash and cash equivalents of $55.0 million, cash flows from operations, or borrowings under our revolving credit facility and securitization facility, if necessary.

Management anticipates having sufficient cash flow to meet 2025 cash requirements, including capital expenditures, acquisitions of oil & gas mineral interests, scheduled payments on long-term debt, lease obligations, asset retirement obligation costs and workers’ compensation and pneumoconiosis costs, with our September 30, 2025 cash and cash equivalents of $94.5 million, cash flows from operations, or borrowings under our revolving credit facility and securitization facility, if necessary.

We currently project average estimated annual maintenance capital expenditures over the next five years of approximately $7.28 per ton produced.

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We also have an agreement with a bank to provide additional letters of credit in the amount of $5.0 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers’ compensation benefits.

On June 30, 2025, we had $5.0 million in letters of credit outstanding under this agreement.

On September 30, 2025, we had $5.0 million in letters of credit outstanding under this agreement.

Related-Party Transactions

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Craft III Foundation and The Kathleen S.

Craft Foundation, and (2) the use of aircraft.

Craft Foundation, (2) the use of aircraft and (3) a master supply and services agreement for the purchase and servicing of electronic components and other parts used in mining equipment.

We also have related-party transactions with (a) WKY CoalPlay LLC, a company owned by entities related to Mr.

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Please read our Annual Report on Form 10-K for the year ended December 31, 2024, “Item 8.

Financial Statements and Supplementary Data — Note 4 – Acquisitions and Note 21 – Related-Party Transactions” for additional information concerning related-party transactions.

Financial Statements and Supplementary Data — Note 21 – Related-Party Transactions” for additional information concerning related-party transactions.

New Accounting Standards

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis