What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-08 · 174 added, 57 removed, 200 unchanged (54% of the section changed)

13 unchanged sentences

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 are the second largest coal producer in the eastern United States and as of June 30, 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 also own mineral and royalty interests across premier basins and resource plays in the United States including the Permian, Anadarko, Bakken, and after the AllDale III & IV Acquisition on July 1, 2026, Haynesville.

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.

Please read “Item 1.

Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 4 – Acquisitions and Note 17.

– Related Party Transactions” for more information on the AllDale III & IV Acquisition.

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

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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 (“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.

● Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC 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 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.

● Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals as well as our equity method investment in AllDale Minerals III, LP (“AllDale III”).

● Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals through its consolidated subsidiaries and prior to the AllDale III & IV Acquisition on July 1, 2026, our equity method investment in AllDale III.

Please read “Item 1.

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

Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 4 – Acquisitions and Note 17 – Related Party Transactions ” for more information on the AllDale III & IV Acquisition.

● 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.

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Please read “Item 1.

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.

Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 9 – Investments, and Note 8 – Long-Term Debt” 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.

During the six months ended June 30, 2026, we acquired 881 oil & gas net royalty acres through a series of transactions in the Permian Basin for an aggregate cash purchase price of $22.0 million which was funded with cash on hand.

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

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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.

While limited coal production is ongoing with continuous mining units, 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.

On July 1, 2026, we completed the acquisition of certain general partner and limited partner interests in AllDale III & IV for approximately $206.2 million.

The AllDale III & IV Acquisition expands and diversifies our portfolio of mineral and royalty interests through the added control of approximately 48,500 net royalty acres across premier basins

and resource plays including the Permian, Anadarko, Bakken and Haynesville.

ARLP funded the acquisition using a combination of cash on hand, borrowings under its revolving credit facility, and a new $150.0 million term loan at Alliance Minerals.

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.

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.

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Analysis of Historical Results of Operations

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

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

Consolidated Information

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Total Revenues

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.

Total revenues for the three months ended June 30, 2026 (“2026 Quarter”) increased 0.7% to $551.6 million compared to $547.5 million for the three months ended June 30, 2025 (“2025 Quarter”) as a result of record oil & gas royalty revenues, increased coal sales volumes and higher other revenues, partially offset by lower coal sales prices per ton.

● Coal sales decreased to $469.5 million for the 2026 Quarter compared to $485.5 million for the 2025 Quarter.

The decrease was attributable to lower average coal sales prices, which reduced coal sales by $26.1 million, partially offset by higher tons sold, which increased coal sales by $10.2 million.

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.

Coal sales price per ton decreased by 5.3% 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 were primarily driven by increased volumes at our River View and Tunnel Ridge operations due to improved recoveries and higher productivity.

● Oil & gas royalties increased 30.5% to a record $46.3 million for the 2026 Quarter compared to $35.5 million for the 2025 Quarter.

The increase was due to higher average sales prices, which increased 22.7%, and improved oil & gas royalty volumes, partially offset by higher expenses.

Oil & gas royalty volumes increased 6.4% compared to the 2025 Quarter as a result of increased drilling and completion activities on our acreage combined with additional volumes from oil & gas mineral interests acquired.

● Other revenues increased to $28.2 million for the 2026 Quarter compared to $18.0 million for the 2025 Quarter.

The increase was due to higher miscellaneous sales and revenue activities in our Appalachian segment.

Segment Adjusted EBITDA Expense

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 decreased 3.8% to $340.0 million for the 2026 Quarter compared to $353.5 million for the 2025 Quarter primarily due to decreased expenses at our coal operations.

Segment Adjusted EBITDA Expense for our coal operations decreased 4.3% to $331.0 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 6.3% to $38.68 per ton sold in the 2026 Quarter compared to $41.27 per ton in the 2025 Quarter, primarily due to increased production at several mines as well as the following per ton cost decreases:

● Labor and benefit expenses per ton produced decreased 5.1% to $14.47 per ton in the 2026 Quarter from $15.24 per ton in the 2025 Quarter .

The decrease of $0.77 per ton was primarily due to lower labor costs at several mines and decreased workers’ compensation accruals.

● Material and supplies expenses per ton produced decreased 10.0% to $12.16 per ton in the 2026 Quarter from $13.51 per ton in the 2025 Quarter.

The decrease of $1.35 per ton produced primarily reflects decreases of $0.63 per ton for miscellaneous materials and supplies, $0.26 per ton for ventilation related expenses, $0.24 per ton for electrical expenses, and $0.21 per ton for various preparation plant expenses , partially offset by an increase of $0.36 per ton for roof support.

● Maintenance expenses per ton produced decreased 5.2% to $4.40 per ton in the 2026 Quarter from $4.64 per ton in the 2025 Quarter.

The decrease of $0.24 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.

● 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 2026 Quarter compared to the 2025 Quarter primarily resulting from lower coal sales prices, partially offset by an unfavorable mix of tons sold that were mined in states with severance taxes.

● We had no sales of outside coal purchases in the 2026 Quarter compared to $7.2 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:

● 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 $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."

General and administrative

General and administrative expenses for the 2026 Quarter increased to $25.8 million compared to $20.4 million in the 2025 Quarter.

The increase of $5.4 million was primarily due to higher incentive compensation expenses and increased outside services.

Equity method investment income (loss)

Equity method investment income was $9.5 million in the 2026 Quarter compared to a loss of $1.5 million in the 2025 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.

The change was primarily due to an increase in the value of our share of the net assets of Gavin Generation and NGP ET IV.

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.

The fair value adjustment on our digital assets decreased by $19.2 million for the 2026 Quarter compared to the 2025 Quarter reflecting 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.

Please read “Item 1.

Financial Statements (Unaudited) – Note 9 – Investments” for more information.

Net income attributable to ARLP

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.

Net income attributable to ARLP for the 2026 Quarter increased 33.9% to $79.6 million, or $0.61 per basic and diluted limited partner unit, compared to $59.4 million, or $0.46 per basic and diluted limited partner unit for the 2025 Quarter, primarily as a result of higher total revenues and equity method investment income as well as the impact of the impairment loss on investments in the 2025 Quarter.

Segment Adjusted EBITDA

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

Our 2026 Quarter Segment Adjusted EBITDA increased 16.0% to $211.5 million from the 2025 Quarter Segment Adjusted EBITDA of $182.3 million.

Segment Information

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Intercompany coal royalties

Other revenues

Segment Adjusted EBITDA Expense

4 unchanged sentences

Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 8.8% to $104.2 million in the 2026 Quarter from $114.2 million in the 2025 Quarter.

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.

The decrease of $10.0 million was primarily attributable to lower average coal sales volumes.

Tons sold decreased by 4.5% compared to the 2025 Quarter due primarily to decreased sales volumes from our Hamilton mine as a result of a planned extended longwall move during the 2026 Quarter, partially offset by a strong sales performance and productivity at our River View complex.

Segment Adjusted EBITDA Expense decreased to $229.2 million in the 2026 Quarter from $231.2 million in the 2025 Quarter, primarily as a result of reduced volumes, partially offset by increased operating expenses per ton.

Segment Adjusted EBITDA Expense per ton increased by 3.7% compared to the 2025 Quarter due primarily to the planned extended longwall move at our Hamilton mine during the 2026 Quarter.

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The increase of $19.8 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.

The decrease in coal sales primarily reflects lower coal sales prices, which decreased by 22.9% 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 sales price per ton at Mettiki.

Partially offsetting lower coal sales prices, coal sales volumes increased 27.6% compared to the 2025 Quarter primarily as a result of increased production at Tunnel Ridge due to improved recoveries and higher productivity.

Other revenues increased by $10.6 million in the 2026 Quarter reflecting higher miscellaneous revenue activities.

Segment Adjusted EBITDA Expense decreased 10.2% to $101.3 million in the 2026 Quarter from $112.8 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.

Segment Adjusted EBITDA Expense per ton for the 2026 Quarter decreased by 29.7% compared to the 2025 Quarter as a result of increased production at our Tunnel Ridge operation.

Oil & Gas Royalties – Segment Adjusted EBITDA increased to a record $38.0 million in the 2026 Quarter compared to $29.9 million in the 2025 Quarter primarily due to higher average sales prices, which increased 22.7%, partially offset by higher expenses.

Coal Royalties – Segment Adjusted EBITDA increased to $13.0 million in the 2026 Quarter compared to $11.8 million in the 2025 Quarter due to higher royalty tons sold, primarily from Tunnel Ridge and River View, partially offset by higher expenses.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

Consolidated Information

Six Months Ended

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 six months ended June 30, 2026 (“2026 Period”) decreased 1.9% to $1.07 billion compared to $1.09 billion for the six months ended June 30, 2025 (“2025 Period”) primarily due to lower coal sales, partially offset by record oil & gas royalty revenues.

● Coal sales decreased to $912.8 million for the 2026 Period compared to $954.0 million for the 2025 Period.

The decrease was attributable to lower average coal sales prices, which reduced coal sales by $56.8 million, partially offset by higher tons sold, which increased coal sales by $15.7 million.

Coal sales price per ton decreased by 5.9% 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 were primarily driven by increased volumes at our River View and Tunnel Ridge operations due to improved recoveries and higher productivity, partially offset by decreased sales volumes from our Hamilton mine as a result of a planned extended longwall move during the 2026 Period .

● Oil & gas royalties increased 22.5% to $87.6 million for the 2026 Period compared to $71.6 million for the 2025 Period.

The increase was due to record oil & gas royalty volumes, which increased 11.3%, as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests, and higher average sales prices, which increased 10.1%.

Segment Adjusted EBITDA Expense

Segment Adjusted EBITDA Expense decreased 4.1% to $671.0 million for the 2026 Period compared to $699.6 million for the 2025 Period 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 Period.

Segment Adjusted EBITDA Expense for our coal operations decreased 3.2% to $656.6 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 4.7% to $39.99 per ton sold in the 2026 Period compared to $41.98 per ton in the 2025 Period, primarily due to increased production at several mines as well as the following per ton cost decreases:

● Labor and benefit expenses per ton produced decreased 2.3% to $14.84 per ton in the 2026 Period from $15.19 per ton in the 2025 Quarter .

The decrease of $0.35 per ton was primarily due to lower labor costs at several mines and decreased workers’ compensation accruals.

● Maintenance expenses per ton produced decreased 5.1% to $4.51 per ton in the 2026 Period from $4.75 per ton in the 2025 Period .

The decrease of $0.24 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 $0.26 per produced ton sold in the 2026 Period compared to the 2025 Period primarily resulting from lower coal sales prices, partially offset by an unfavorable mix of tons sold that were mined in states with severance taxes.

● We had no sales of outside coal purchases in the 2026 Period compared to $14.5 million in the 2025 Period.

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

Depreciation, depletion and amortization

Depreciation, depletion and amortization expense increased to $163.6 million for the 2026 Period compared to $145.0 million for the 2025 Period 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 in the 2026 Period.

Asset impairments

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

Please read "Item 1.

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

Equity method investment income (loss)

Equity method investment income was $13.8 million in the 2026 Period compared to a loss of $3.5 million in the 2025 Period.

The change was primarily due to an increase in the value of our share of the net assets of Gavin Generation and NGP ET IV.

Change in fair value of digital assets

The fair value adjustment on our digital assets decreased by $25.3 million for the 2026 Period compared to the 2025 Period reflecting movement in the price of bitcoin.

Impairment loss on investments

During the 2025 Period, we recorded a $25.0 million impairment on our equity investment in Ascend.

Please read “Item 1.

Financial Statements (Unaudited) – Note 9 – Investments” for more information.

Net income attributable to ARLP

Net income attributable to ARLP for the 2026 Period decreased 33.5% to $88.7 million, or $0.68 per basic and diluted limited partner unit, compared to $133.4 million, or $1.03 per basic and diluted limited partner unit for the 2025 Period, primarily as a result of lower revenues, higher depreciation, a decrease in the fair value of our digital assets, and the non-cash asset impairment charges at Mettiki, partially offset by the $25.0 million impairment loss on investments in the 2025 Period, higher equity method investment income and lower outside coal purchases.

Segment Adjusted EBITDA

Our 2026 Period Segment Adjusted EBITDA increased 7.6% to $390.6 million from the 2025 Period Segment Adjusted EBITDA of $362.8 million.

Segment Information

Six Months Ended

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

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).

(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 15.4% to $203.4 million in the 2026 Period from $240.4 million in the 2025 Period.

The decrease of $37.0 million was primarily attributable to lower coal sales.

The decrease in coal sales reflects lower coal sales prices, which decreased by 3.4% compared to the 2025 Period as a result of the expiration of higher priced legacy contracts, and decreased coal sales volumes.

Tons sold decreased by 2.1% compared to the 2025 Period due primarily to decreased sales volumes from our Hamilton mine as a result of the planned extended longwall move during the 2026 Period, partially offset by a strong sales performance and productivity at our River View complex.

Segment Adjusted EBITDA Expense remained comparable to the 2025 Period as reduced sales volumes substantially offset higher per ton costs.

Segment Adjusted EBITDA Expense per ton increased by 2.6% compared to the 2025 Period due primarily to the planned extended longwall move at our Hamilton mine during the 2026 Period.

Appalachia Coal Operations – Segment Adjusted EBITDA increased 67.4% to $75.4 million for the 2026 Period from $45.0 million in the 2025 Period.

The increase of $30.4 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 14.8% compared to the 2025 Period primarily due to an increased sales mix of lower priced Tunnel Ridge sales volumes in the 2026 Period and reduced sales price per ton at Mettiki.

Partially offsetting lower coal sales prices, coal sales volumes increased 15.6% compared to the 2025 Period primarily as a result of increased production at Tunnel Ridge due to improved recoveries, higher productivity, and fewer longwall move days during the

Other revenues increased by $13.8 million in the 2026 Period reflecting higher miscellaneous revenue activities.

Segment Adjusted EBITDA Expense decreased 8.9% to $212.7 million in the 2026 Period from $233.4 million in the 2025 Period due primarily to lower per ton expenses, partially offset by increased sales volumes.

Segment Adjusted EBITDA Expense per ton for the 2026 Period decreased by 21.1% compared to the 2025 Period as a result of increased production at our Tunnel Ridge operation.

Oil & Gas Royalties – Segment Adjusted EBITDA increased to a record $72.6 million in the 2026 Period compared to $59.8 million in the 2025 Period due to record oil & gas royalty volumes, which increased 11.3% as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests, and higher average sales prices, which increased 10.1% compared to the 2025 Period.

Coal Royalties – Segment Adjusted EBITDA increased to $25.2 million in the 2026 Period compared to $21.2 million in the 2025 Period due to higher royalty tons sold, primarily from Tunnel Ridge and River View, partially offset by lower average royalty rates per ton received from the Partnership’s mining subsidiaries.

Reconciliation of Non-GAAP Financial Measures

7 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

6 unchanged sentences

Change in fair value of digital assets

Impairment loss on investments

Income tax expense

9 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

11 unchanged sentences

Unit Repurchase Program

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.

We have $80.6 million remaining authorized under our unit repurchase program as of June 30, 2026.

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

8 unchanged sentences

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

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

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, inventories and accounts payable.

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.

Alliance Minerals Term Loan

On July 1, 2026, Alliance Minerals, as borrower, entered into a term loan for an aggregate principal amount of $150.0 million (the “Alliance Minerals Term Loan”).

The Alliance Minerals Term Loan matures on January 1, 2028.

For additional information on the Alliance Minerals Term Loan, please see “Item 1.

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

AllDale III & IV Acquisition

On July 1, 2026, we completed the AllDale III & IV Acquisition for approximately $206.2 million, which was funded using a combination of cash on hand, borrowings under our revolving credit facility and proceeds from the Alliance Minerals Term Loan.

Cash provided by operating activities was $258.5 million for the 2026 Period compared to $297.4 million for the 2025 Period.

decreases were partially offset by favorable working capital changes primarily related to inventories and other miscellaneous changes compared to the 2025 Period.

Net cash used in investing activities was $181.2 million for the 2026 Period compared to $168.3 million for the 2025 Period.

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

This increase was partially offset by decrease in accounts payable and accrued liabilities and reduced capital expenditure during the 2026 Period.

Net cash used in financing activities was $37.4 million for the 2026 Period compared to $211.2 million for the 2025 Period.

The decrease in cash used in financing activities was primarily attributable to increased borrowings under both the revolving credit facility and Securitization Facility and reduced distributions paid to partners in the 2026 Period as compared to the 2025 Period.

These decreases were partially offset by increased payments on the revolving credit facility and Securitization Facility in the 2026 Period compared to the 2025 Period.

Cash Requirements

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.

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 June 30, 2026 cash and cash equivalents of $111.2 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.

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

On June 30, 2026, 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, (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.

Craft Foundation, (2) the use of aircraft, (3) master supply and services agreements for the purchase and servicing of electronic components and other parts used in mining equipment, and (4) contribution and exchange agreements entered with related parties of Mr.

Craft in connection with the AllDale III & IV Acquisition on July 1, 2026.

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

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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