What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-07 · 116 added, 178 removed, 141 unchanged (68% of the section changed)

11 unchanged sentences

● References to “Alliance Resource Properties” mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary of ARLP.

We are a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in strategic producing regions across the United States.

Our strategy is to provide our customers with reliable, baseload fuel for electricity generation to meet load expectations.

The primary focus of our business is to maximize the value of our existing mineral assets, both in the production of coal from our mining assets and the leasing and development of our coal and oil & gas mineral ownership.

In addition, we continue to position ourselves as a reliable energy provider for the future as we pursue opportunities that support the growth and development of energy and related infrastructure.

We intend to pursue strategic investments that leverage our core competencies and relationships with electric utilities, industrial customers, and federal and state governments.

We believe that our diverse and rich resource base and strategic investments will allow us to continue to create long-term value for unitholders.

We are the second largest coal producer in the eastern United States with seven operating underground mining complexes near many of the major eastern utility generating plants and on major coal hauling railroads in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia, as well as a coal-loading terminal in Indiana.

Two of our mines also have loading facilities located on the Ohio River.

In addition to our mining operations, Alliance Resource Properties owns or leases substantially all of our coal mineral resources and the majority of our coal mineral reserves in the Illinois and Appalachia Basins that are (a) leased to our internal mining complexes or (b) near our coal mining operations but not yet leased.

We currently own mineral interests in approximately 70,000 net royalty acres in premier oil & gas producing regions of the United States, primarily in the Permian (Delaware and Midland), Anadarko (SCOOP/STACK), and Williston (Bakken) basins, providing us with diversified exposure to industry-leading operators consistent with our general strategy to grow our oil & gas mineral interest business.

We have invested in energy and infrastructure opportunities including our investments in Infinitum Electric, Inc.

(“Infinitum”), NGP Energy Transition, L.P.

(“NGP ET IV”), and Ascend Elements, Inc.

(“Ascend”) which are in the businesses of, respectively, electric motor manufacturing, private equity investments in renewable energy, the electrification of our economy or the efficient use of energy, and the manufacturing and recycling of sustainable, engineered battery materials for electric vehicles.

In February 2025, we committed to invest up to $25.0 million of limited partner interests in Gavin Generation Holdings A, LP (“Gavin Generation”), which is sponsored by a private equity firm.

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

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.

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

Our core objective is to maximize the value of our mineral asset base—both through coal production from our mining operations and through the leasing and development of our coal and oil & gas mineral interests.

Our strategy is to provide reliable, baseload fuel for electricity generating customers while positioning the Partnership for long-term growth through investments in energy and related infrastructure.

Leveraging our relationships with electric utilities, industrial customers, and government partners, we intend to pursue strategic opportunities that complement our operational strengths.

We believe our diverse resource portfolio and targeted investments will continue to create long-term value for our unitholders.

We are the second largest coal producer in the eastern United States and as of March 31, 2026, we operated seven underground mining complexes across Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal-loading terminal on the Ohio River in Indiana.

We manage and report our coal operations under two regions, Illinois Basin and Appalachia.

We market our coal production to major domestic and international utilities and industrial customers.

We also own mineral and royalty interests in approximately 70,500 net royalty acres including approximately 4,000 net royalty acres attributable to our equity interest in AllDale Minerals III, LP (“AllDale III”), in premier oil & gas producing regions in the United States, primarily the Permian, Anadarko, and Williston Basins.

We market our oil & gas mineral interests for lease to operators in those regions and generate royalty income from their development of those mineral interests.

We also hold coal mineral reserves and resources in Illinois, Indiana, Kentucky, Pennsylvania and West Virginia.

Substantially all of our coal mineral resources and a majority of our coal mineral reserves are owned or leased by Alliance Resource Properties, which are (a) leased or subleased to our mining complexes or (b) near other internal and external coal mining operations but not yet leased.

We generate intercompany royalty income through the leasing and development of our coal mineral reserves and resources.

Beyond our core mineral platform, we have invested in growth-oriented businesses and energy-related technologies.

Our subsidiaries, Matrix Design Group, LLC (and its subsidiaries), and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), develop and market industrial, mining and technology products and services worldwide and our subsidiary, Bitiki KY, LLC (“Bitiki”), mines bitcoin.

We have also made investments in emerging energy and infrastructure opportunities, including Infinitum Electric, Inc.

(“Infinitum”), NGP Energy Transition IV, L.P.

(“NGP ET IV”) and Gavin Generation Holdings A, LP (“Gavin Generation”).

We have four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties.

3 unchanged sentences

Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.

● Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC (“Gibson”) mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC (“River View”) mining complex, which includes the River View and Henderson County mines and (d) the Hamilton County Coal, LLC (“Hamilton”) mining complex.

The segment also includes our Mt.

Vernon coal-loading terminal in Indiana which operates on the Ohio River, Mid-America Carbonates, LLC and other support services, and certain of our idled or closed mining complexes.

● Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC (“Gibson”) mining complex, (b) the Warrior Coal, LLC (“Warrior”) mining complex, (c) the River View Coal, LLC (“River View”) mining complex, which includes the River View and Henderson County mines and (d) the Hamilton County Coal, LLC (“Hamilton”) mining complex.

The segment also includes activity associated with support services and our non-operating mining complexes.

● Appalachia Coal Operations reportable segment includes (a) the Mettiki Coal, LLC and Mettiki Coal (WV), LLC (collectively, “Mettiki”) mining complex, (b) the Tunnel Ridge, LLC (“Tunnel Ridge”) mining complex and (c) the MC Mining, LLC (“MC Mining”) mining complex.

2 unchanged sentences

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 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.

● 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.

● Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Group, Bitiki, 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.

The eliminations included in Other, Corporate and Elimination primarily represent the intercompany coal royalty transactions described above between our Coal Royalties reportable segment and our coal operations’ mines.

Please read “Item 1.

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

Financial Statements (Unaudited)—Note 3 – Variable Interest Entities, Note 9 – Investments, and Note 8 – Long-Term Debt” of this Quarterly Report on Form 10-Q for more information on our investments in Infinitum, Gavin Generation, and NGP ET IV as well as AROP Funding and Alliance Finance.

Recent Developments

In January and March 2026, we acquired an aggregate 574 oil and gas net royalty acres in the Permian Basin for $14.5 million in cash.

The interests include royalty interests in both developed properties and undeveloped properties.

Please see “Item 1.

Financial Statements (Unaudited) – Note 4 – Acquisitions” for additional information.

Prior to January 29, 2026, certain of the coal mined and to be mined by Tunnel Ridge had been leased from the Craft Foundations.

On January 29, 2026, we purchased all of the ownership interests in these coal reserves together with surface rights from the Craft Foundations for an aggregate $15.5 million.

Please see “Item 1.

Financial Statements (Unaudited) – Note 17 – Related-Party Transactions” for additional information.

In January 2026, we announced our decision to cease longwall production at our Mettiki mining complex due to a series of planned and unplanned outages at a key customer’s plant.

We continue to evaluate options concerning the mine’s future.

Please see “Item 1.

Financial Statements (Unaudited) – Note 8 – Long-Lived Asset Impairment” for additional information.

Risks and Uncertainties

We face a variety of risks and uncertainties that management considers in the operation and planning of our businesses, which could affect our financial position and results of operations.

For additional information regarding our

risks and uncertainties that affect our business and the industries in which we operate, see “Item 1A.

Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025.

How We Evaluate Our Performance

Our management uses a variety of financial and operational measurements to analyze our performance.

Primary measurements include the following:

(1) coal volumes;

(2) coal sales;

(3) oil & gas volumes;

(4) oil & gas royalties;

(5) intercompany coal royalties;

(6) Segment Adjusted EBITDA Expense;

and (7) Segment Adjusted EBITDA.

Please see below and “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information.

Analysis of Historical Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Consolidated Information

Three Months Ended

September 30,

Increase (Decrease)

11 unchanged sentences

Total Revenues

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.

Total revenues for the three months ended March 31, 2026 (“2026 Quarter”) decreased 4.5% to $516.0 million compared to $540.5 million for the three months ended March 31, 2025 (“2025 Quarter”) primarily due to lower coal sales pricing, partially offset by record oil & gas royalties and higher coal sales volumes.

● Coal sales decreased to $443.3 million for the 2026 Quarter compared to $468.5 million for the 2025 Quarter.

The decrease was attributable to lower average coal sales prices, which reduced coal sales by $30.6 million, partially offset by higher tons sold, which increased coal sales by $5.4 million.

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.

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.

The decrease of $16.9 million was primarily attributable to lower third-party transportation rates in the 2025 Quarter and decreased coal shipments for which we arrange third-party transportation.

Transportation revenues are recognized when title to the coal passes to the customer and recognized in an amount equal to the corresponding transportation expenses.

Coal sales price per ton decreased by 6.5% as a result of lower domestic price realizations at several mines resulting from the continued roll-off of higher-priced legacy contracts.

Higher coal sales volumes was primarily driven by a strong performance at our Gibson South operation during the 2026 Quarter and increased tons sold from our Tunnel Ridge mine reflecting fewer production days in the 2025 Quarter due to a longwall move.

● Oil & gas royalties increased 14.6% to $41.3 million for the 2026 Quarter compared to $36.1 million for the 2025 Quarter.

The increase was due to record oil & gas royalty volumes, which increased 16.1%, as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests.

Segment Adjusted EBITDA Expense

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 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 $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 .

Segment Adjusted EBITDA Expense decreased 4.4% to $331.0 million for the 2026 Quarter compared to $346.2 million for the 2025 Quarter primarily due to decreased expenses at our coal operations and a $6.5 million benefit from the correction of black lung actuarial assumptions during the 2026 Quarter.

Segment Adjusted EBITDA Expense for our coal operations decreased 2.0% to $325.5 million due to lower per ton costs, partially offset by higher coal sales volumes.

Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 3.1% to $41.42 per ton sold in the 2026 Quarter compared to $42.75 per ton in the 2025 Quarter, primarily due to increased production at several mines as well as the following per ton cost decreases:

● Maintenance expenses per ton produced decreased 4.7% to $4.63 per ton in the 2026 Quarter from $4.86 per ton in the 2025 Quarter.

The decrease of $0.23 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 $0.17 per produced ton sold in the 2026 Quarter compared to the 2025 Quarter primarily resulting from a favorable mix of tons sold that were mined in states without severance taxes.

● We had no sales of outside coal purchases in the 2026 Quarter compared to $7.3 million in the 2025 Quarter.

Thus, costs per ton in the 2026 Quarter decreased as the cost of our produced coal is generally lower on a per ton basis than outside coal purchases.

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.

● Material and supplies expenses per ton produced increased 8.1% to $14.61 per ton in the 2026 Quarter from $13.51 per ton in the 2025 Quarter.

The increase of $1.10 per ton produced primarily reflects increases of $0.96 per ton for roof support and $0.50 per ton for ventilation related expenses, partially offset by a reduction of $0.35 per ton for environmental and reclamation expenses other than longwall subsidence .

Depreciation, depletion and amortization

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.

Depreciation, depletion and amortization expense increased to $82.4 million for the 2026 Quarter compared to $68.6 million for the 2025 Quarter primarily as a result of new mine infrastructure and equipment placed in service during the second half of 2025 at our Hamilton and River View operations as well as increased sales volumes from our Warrior mine in the 2026 Quarter.

Asset impairments

During the 2026 Quarter, we recorded $37.8 million of non-cash asset impairment charges due to our decision to cease longwall production, along with uncertainty regarding future longwall production resumption and our evaluation of potential operation scenarios at our Mettiki mine.

Please read "Item 1.

Financial Statements (Unaudited)—Note 8 – Long-Lived Asset Impairments."

Equity method investment income (loss)

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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.

Change in fair value of digital assets

The fair value adjustment on our digital assets decreased by $6.1 million for the 2026 Quarter compared to the 2025 Quarter reflecting the movement in the price of bitcoin.

Net income attributable to ARLP

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.

Net income attributable to ARLP for the 2026 Quarter decreased 87.7% to $9.1 million, or $0.07 per basic and diluted limited partner unit, compared to $74.0 million, or $0.57 per basic and diluted limited partner unit for the 2025 Quarter, primarily as a result of lower coal sales, higher depreciation, a decrease in the fair value of our digital assets and non-cash asset impairment charges in the 2026 Quarter.

Segment Adjusted EBITDA

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

Our 2026 Quarter Segment Adjusted EBITDA decreased 0.8% to $179.0 million from the 2025 Quarter Segment Adjusted EBITDA of $180.5 million.

Segment Information

Three Months Ended

September 30,

Increase (Decrease)

17 unchanged sentences

Intercompany coal royalties

Other revenues

Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA

n/m - Percentage change not meaningful.

(1) BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).

1 unchanged sentence

Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 21.4% to $99.2 million in the 2026 Quarter from $126.2 million in the 2025 Quarter.

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 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.

The decrease of $27.0 million was primarily attributable to lower average coal sales prices and higher operating expenses.

Coal sales price per ton sold decreased by 7.4% compared to the 2025 Quarter as a result of the expiration of higher priced legacy contracts.

Segment Adjusted EBITDA Expense increased to $213.6 million in the 2026 Quarter from $210.0 million in the 2025 Quarter, primarily as a result of increased operating

expenses per ton.

Segment Adjusted EBITDA Expense per ton increased by 1.3% compared to the 2025 Quarter due primarily to the planned extended longwall move at our Hamilton mine during the 2026 Quarter.

Appalachia Coal Operations – Segment Adjusted EBITDA increased 67.9% to $26.2 million for the 2026 Quarter from $15.6 million in the 2025 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

Nine Months Ended

September 30,

Increase (Decrease)

(in thousands)

Consolidated Total

Tons produced

Volume - BOE (1)

Oil & gas royalties

Total revenues

Segment Adjusted EBITDA Expense (2)

Net income of ARLP

Segment Adjusted EBITDA (2)

(1) BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).

(2) For definitions of Segment Adjusted EBITDA and Segment Adjusted EBITDA Expense and related reconciliations to their respective comparable GAAP financial measures, please see below under “— Reconciliation of Non-GAAP Financial Measures.”

Total Revenues

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 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.

The decrease of $55.6 million was primarily attributable to lower third-party transportation rates in the 2025 Period and decreased coal shipments for which we arrange third-party transportation.

Transportation revenues are recognized when title to the coal passes to the customer and recognized in an amount equal to the corresponding transportation expenses.

Segment Adjusted EBITDA Expense

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 $1.79 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.

● 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 $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

During the 2025 Period, 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 Period.

Please read “Item 1.

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

Net income attributable to ARLP

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

Our 2025 Period Segment Adjusted EBITDA decreased $84.8 million to $570.0 million from the 2024 Period Segment Adjusted EBITDA of $654.8 million.

Segment Information

Nine Months Ended

September 30,

Increase (Decrease)

(in thousands)

Illinois Basin Coal Operations

Other revenues

Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA

Appalachia Coal Operations

Other revenues

Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA

Oil & Gas Royalties

Volume - BOE (1)

Oil & gas royalties

Other revenues

Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA

Coal Royalties

Volume - Tons sold (2)

Intercompany coal royalties

Other revenues

Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA

(1) BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).

(2) Represents tons sold by our Coal Operations segments associated with coal reserves leased from our Coal Royalties segment.

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 $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 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.

The decrease of $58.0 million was primarily attributable to lower coal sales, which decreased 20.4% to $451.1 million in the 2025 Period from $566.8 million in the 2024 Period, partially offset by lower operating expenses.

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

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 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%.

The increase of $10.6 million was primarily attributable to reduced operating expenses and higher other revenues, partially offset by lower coal sales.

The decrease in coal sales primarily reflects lower coal sales prices, which decreased by 4.8% compared to the 2025 Quarter primarily due to an increased sales mix of lower priced Tunnel Ridge sales volumes in the 2026 Quarter and reduced domestic sales price per ton.

Partially offsetting lower coal sales prices, coal sales volumes increased 3.6% compared to the 2025 Quarter primarily as a result of fewer production days in the 2025 Quarter at our Tunnel Ridge mine due to a longwall move.

Other revenues increased by $3.2 million in the 2026 Quarter reflecting higher miscellaneous revenue activities.

Segment Adjusted EBITDA Expense decreased 7.6% to $111.5 million in the 2026 Quarter from $120.6 million in the 2025 Quarter due primarily to lower per ton expenses, partially offset by increased sales volumes.

Segment Adjusted EBITDA Expense per ton for the 2026 Quarter decreased by 10.8% compared to the 2025 Quarter as a result of increased production at our Tunnel Ridge operation primarily reflecting fewer production days due to a longwall move in the 2025 Quarter.

Oil & Gas Royalties – Segment Adjusted EBITDA increased to $34.6 million in the 2026 Quarter compared to $29.9 million in the 2025 Quarter due to record oil & gas royalty volumes, which increased 16.1% as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests.

Coal Royalties – Segment Adjusted EBITDA increased to $12.3 million in the 2026 Quarter compared to $9.4 million in the 2025 Quarter due to higher royalty tons sold, primarily from Tunnel Ridge, partially offset by lower average royalty rates per ton received from the Partnership's mining subsidiaries.

Reconciliation of Non-GAAP Financial Measures

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Three Months Ended

Nine Months Ended

September 30,

(in thousands)

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Depreciation, depletion and amortization

Asset impairments

Interest expense, net

Change in fair value of digital assets

Impairment loss on investments

Litigation expense accrual

Income tax expense

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Segment Adjusted EBITDA Expense

We define Segment Adjusted EBITDA Expense (a non-GAAP financial measure) as the sum of operating expenses, coal purchases and other expenses as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations.

Transportation expenses are excluded as these expenses are

passed through to our customers and, consequently, we do not realize any gain or loss on transportation revenues.

We define Segment Adjusted EBITDA Expense (a non-GAAP financial measure) as the sum of operating expenses, coal purchases and other income or expenses as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations.

Transportation expenses are excluded as these expenses are passed through to our customers and, consequently, we do not realize any gain or loss on transportation revenues.

Segment Adjusted EBITDA Expense is used as a supplemental financial measure by our management to assess the operating performance of our segments.

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Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Operating expenses (excluding depreciation, depletion and amortization)

Litigation expense accrual

Outside coal purchases

Other expense (income)

Consolidated Segment Adjusted EBITDA Expense

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Nevertheless, our ability to satisfy our working capital requirements and additional investments, to satisfy our contractual obligations, to fund planned capital expenditures, to service our debt obligations or to pay distributions will depend upon our future operating performance and access to and cost of financing sources, which will be affected by prevailing economic conditions generally, and in both the coal and oil & gas industries specifically, as well as other financial and business factors, some of which are beyond our control.

Based on our recent operating cash flow results, current cash position, anticipated future cash flows and sources of financing that we expect to have available, we anticipate being in compliance with the covenants of the Credit Agreement and expect to have sufficient liquidity to fund our operations and growth strategies.

Based on our recent operating cash flow results, current cash position, anticipated future cash flows and sources of financing that we expect to have available, we anticipate being in compliance with the covenants of our credit agreements and expect to have sufficient liquidity to fund our operations and growth strategies.

However, to the extent operating cash flow or access to and cost of financing sources are materially different than expected, future covenant compliance or liquidity may be adversely affected.

Please read “Item 1A.

Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025.

Unit Repurchase Program

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.

We have $80.6 million remaining authorized under our unit repurchase program as of March 31, 2026.

No units were repurchased during the three months ended March 31, 2026.

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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Financial Statements (Unaudited) – Note 10 – Long-Term Debt.”

Cash provided by operating activities was $507.3 million for the 2025 Period compared to $634.7 million for the 2024 Period.

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 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 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 distributions paid to partners in the 2025 Period and the payment of debt issuance costs in the 2024 Period.

Cash provided by operating activities was $105.5 million for the 2026 Quarter compared to $145.7 million for the 2025 Quarter.

These decreases were partially offset by favorable working capital changes primarily related to accrued payroll and related benefits compared to the 2025 Quarter.

Net cash used in investing activities was $107.8 million for the 2026 Quarter compared to $93.1 million for the 2025 Quarter.

The increase in cash used in investing activities was primarily due to increased oil & gas reserve acquisitions and capital expenditures in the 2026 Quarter as compared to the 2025 Quarter.

This increase was partially offset by changes in accounts payable and accrued liabilities during the 2026 Quarter.

Net cash used in financing activities was $40.0 million for the 2026 Quarter compared to $108.3 million for the 2025 Quarter.

The decrease in cash used in financing activities was primarily attributable to increased borrowings under the Securitization Facility and other long-term debt arrangements and reduced distributions paid to partners in the 2026 Quarter as compared to the 2025 Quarter.

These decreases were partially offset by increased payments on the Securitization Facility in the 2026 Quarter.

Cash Requirements

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.

Our anticipated total capital expenditures, including maintenance capital expenditures, for 2025 are estimated in a range of $285.0 million to $320.0 million.

Management anticipates having sufficient cash flow to meet 2026 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 March 31, 2026 cash and cash equivalents of $28.9 million, cash flows from operations, or borrowings under our revolving credit facility and Securitization Facility, if necessary.

We project average estimated annual maintenance capital expenditures over the next five years of approximately $7.23 per ton produced.

Our anticipated total capital expenditures, including maintenance capital expenditures, for 2026 are estimated in the range of $280.0 million to $300.0 million.

We will continue to have significant cash requirements over the long term, which may require us to incur debt or seek additional equity capital.

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

On March 31, 2026, we had $5.0 million in letters of credit outstanding under this agreement.

Related-Party Transactions

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Craft, MGP and their respective affiliates as well as other related parties.

These related-party transactions and activities relate principally to (1) coal mineral leases with The Joseph W.

These related-party transactions and activities relate principally to (1) an installment purchase obligation with The Joseph W.

Craft III Foundation resulting from our January 2026 acquisition of ownership interests in certain coal reserves and associated surface rights that we had previously been leasing from The Joseph W.

Craft III Foundation and The Kathleen S.

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Craft, regarding three mineral leases, and (b) entities in which we hold equity investments.

For more information regarding our investments, please read “Item 1.

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

For more information, please read “Item 1.

Financial Statements (Unaudited) — Note 9 – Investments, Note 10 – Long-Term Debt and Note 17 – Related-Party Transactions ” of this Quarterly Report on Form 10-Q.

Please read our Annual Report on Form 10-K for the year ended December 31, 2025, “Item 8.

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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