What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-05 compared with 2020-08-06 · 117 added, 83 removed, 606 unchanged (25% of the section changed)

4 unchanged sentences

(In thousands, except unit data)

September 30,

CURRENT ASSETS:

55 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

SALES AND OPERATING REVENUES:

12 unchanged sentences

INCOME (LOSS) FROM OPERATIONS

Interest expense (net of interest capitalized for the three and six months ended June 30, 2020 and 2019 of $ 509 , $ 238 , $ 1,066 and $ 492 , respectively)

Interest expense (net of interest capitalized for the three and nine months ended September 30, 2020 and 2019 of $ 199 , $ 298 , $ 1,265 and $ 790 , respectively)

Interest income

4 unchanged sentences

INCOME (LOSS) BEFORE INCOME TAXES

INCOME TAX EXPENSE (BENEFIT)

INCOME TAX EXPENSE

NET INCOME (LOSS)

NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

NET INCOME (LOSS) ATTRIBUTABLE TO ARLP

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

NET INCOME (LOSS)

10 unchanged sentences

COMPREHENSIVE INCOME (LOSS)

Comprehensive loss (income) attributable to noncontrolling interest

Comprehensive income attributable to noncontrolling interest

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ARLP

5 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

57 unchanged sentences

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of June 30, 2020 and December 31, 2019 and the results of our operations, comprehensive income for the three and six months ended June 30, 2020 and 2019, and cash flows for the six months ended June 30, 2020 and 2019.

The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of September 30, 2020 and December 31, 2019, the results of our operations and comprehensive income for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019.

All intercompany transactions and accounts have been eliminated.

27 unchanged sentences

Because the mineral interests acquired in the Wing Acquisition include royalty interests in both producing properties and unproved properties, we have determined that the acquisition should be accounted for as a business combination and the underlying assets should be recorded at fair value as of the Wing Acquisition Date on our condensed consolidated balance sheet.

During the six months ended June 30, 2020, we recorded adjustments to our mineral interests in proved and unproved properties after receiving additional information regarding proved and unproved reserve quantities, production and projections as of the Wing Acquisition Date.

During the nine months ended September 30, 2020, we recorded adjustments to our mineral interests in proved and unproved properties after receiving additional information regarding proved and unproved reserve quantities, production and projections as of the Wing Acquisition Date.

In addition, we increased our receivables by $ 0.3 million as a result of information received from operators concerning royalty payments owed to us from production that occurred prior to the Wing Acquisition Date.

13 unchanged sentences

LONG-LIVED ASSET IMPAIRMENTS

During the six months ended June 30, 2020, we recorded $ 25.0 million of non-cash asset impairment charges in our Illinois Basin segment due to sealing our idled Gibson North mine, resulting in its permanent closure, and a decrease in the fair value of certain mining equipment at our idled operations and greenfield coal reserves as a result of weakened coal market conditions.

During the nine months ended September 30, 2020, we recorded $ 25.0 million of non-cash asset impairment charges in our Illinois Basin segment due to sealing our idled Gibson North mine, resulting in its permanent closure, and a decrease in the fair value of certain mining equipment at our idled operations and greenfield coal reserves as a result of weakened coal market conditions.

During the nine months ended September 30, 2019, we recorded an asset impairment charge of $ 15.2 million in our Illinois Basin segment due to the cessation of coal production at our Dotiki mine, effective August 16, 2019, in an effort to focus on maximizing production at our lower-cost mines in the segment.

We adjusted the carrying value of Dotiki's assets from $ 35.9 million to its fair value of $ 25.8 million and accrued $ 5.1 million with respect to scheduled payments to WKY CoalPlay, LLC ("WKY CoalPlay") for leased coal reserves from which we may not receive future economic benefit.

See Note 10 – Variable Interest Entities for more information about WKY CoalPlay.

The fair values of the impaired assets were determined using a market approach, which represent Level 3 fair value measurements under the fair value hierarchy.

The fair value analysis used assumptions regarding the marketability of certain assets in the Illinois Basin.

With the uncertainty related to energy demand as a result of a) weak electricity demand and b) an oversupply and lack of storage for oil and natural gas during the first quarter, both due in part to the COVID-19 pandemic and other market and production factors impacting both our coal mining operations and our mineral interests activities, we performed recoverability tests during the first quarter using undiscounted cash flows based on our estimate of both volume and prices from information available to us and determined we would be able to recover the costs of our assets, excluding the impaired assets discussed above.

Amid cost reduction efforts, increased customer commitments for coal, a modest recovery in commodity futures prices and increased clarity into production levels by operators of our oil & gas mineral interests, we updated certain recoverability tests in the second quarter due to continuing weak market conditions and reaffirmed our belief we would recover the costs of our assets.

The cash flow estimates used in our assessment, by their very nature, are dependent on conditions that could materially change in future periods based on new information.

With the uncertainty related to energy demand as a result of a) weak electricity demand and b) an oversupply and lack of storage for oil and natural gas during the quarter ended March 31, 2020 (the "First Quarter"), both due in part to the COVID-19 pandemic and other market and production factors impacting both our coal mining operations and our mineral interests activities, we performed recoverability tests during the First Quarter using undiscounted cash flows based on our estimate of both volume and prices from information available to us and determined we would be able to recover the costs of our assets, excluding the impaired assets discussed above.

Amid cost reduction efforts, increased customer commitments for coal, a modest recovery in commodity futures prices and increased clarity into production levels by operators of our oil & gas mineral interests, we determined impairment of our long-lived assets subsequent to the First Quarter was not necessary.

The cash flow estimates used in our impairment assessments, by their very nature, are dependent on conditions that could materially change in future periods based on new information.

If in future periods changes to these estimates were to materially reduce our expected cash flows, additional impairments could be necessary.

2 unchanged sentences

The goodwill associated with our Hamilton mine was recorded in conjunction with our acquisition of the Hamilton mine on July 31, 2015.

During the first quarter of 2020, we assessed certain events and changes in circumstances, including a) adverse industry and market developments, including the impact of the COVID-19 pandemic, b) our response to these developments, including temporarily ceasing production at several mines, including Hamilton and c) our actual performance during the first quarter of 2020.

During the First Quarter, we assessed certain events and changes in circumstances, including a) adverse industry and market developments, including the impact of the COVID-19 pandemic, b) our response to these developments, including temporarily ceasing production at several mines, including Hamilton and c) our actual performance during the First Quarter.

After consideration of these events and changes in circumstances, we performed an interim test of the goodwill associated with the Hamilton reporting unit comparing Hamilton's carrying amount to its fair value.

6 unchanged sentences

Accordingly, we recognized an impairment charge of $ 132.0 million consisting of the total carrying amount of goodwill allocated to the Hamilton reporting unit.

This impairment change reduced our consolidated goodwill balance to $ 4.4 million.

During the first quarter, we also performed an interim test on ARLP's remaining goodwill balances not associated with Hamilton and concluded no impairment was necessary for our other reporting units.

This impairment charge reduced our consolidated goodwill balance to $ 4.4 million.

During the First Quarter, we also performed an interim test on ARLP's

remaining goodwill balances not associated with Hamilton and concluded no impairment was necessary for our other reporting units.

CONTINGENCIES

1 unchanged sentence

We record an accrual for a potential loss related to these matters when, in management's opinion, such loss is probable and reasonably estimable.

Based on known facts and circumstances, we believe the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on our financial condition,

results of operations or liquidity.

However, if the results of these matters are different from management's current expectations and in amounts greater than our accruals, such matters could have a material adverse effect on our business and operations.

Inventories consist of the following:

September 30,

(in thousands)

1 unchanged sentence

Total inventories, net

During the six months ended June 30, 2020, we recorded lower of cost or net realizable value adjustments of $ 16.9 million to our coal inventories as a result of lower coal sale prices and higher cost per ton due to the impact of lower production on our fixed costs per ton in addition to the impact of challenging market conditions on our production levels.

The lower of cost or net realizable value adjustments reflect the impacts of the challenging market conditions and were primarily attributable to the Hamilton and MC Mining complexes.

FAIR VALUE MEASUREMENTS

The following table summarizes our fair value measurements within the hierarchy not included elsewhere in these notes:

June 30, 2020

September 30, 2020

December 31, 2019

8 unchanged sentences

Debt Issuance Costs

September 30,

(in thousands)

14 unchanged sentences

Borrowings under the Revolving Credit Facility bear interest, at our option, at either (i) the Base Rate at the greater of three benchmarks or (ii) a Eurodollar Rate, plus margins for (i) or (ii), as applicable, that fluctuate depending upon the ratio of Consolidated Debt to Consolidated Cash Flow (each as defined in the Credit Agreement).

The Eurodollar Rate, with applicable margin, under the Revolving Credit Facility was 3.03 % as of June 30, 2020.

At June 30, 2020, we had $ 9.3 million of letters of credit outstanding with $ 263.5 million available for borrowing under the Revolving Credit Facility.

The Eurodollar Rate, with applicable margin, under the Revolving Credit Facility was 3.01 % as of September 30, 2020.

At September 30, 2020, we had $ 21.8 million of letters of credit outstanding with $ 381.0 million available for borrowing under the Revolving Credit Facility.

We incur an annual commitment fee of 0.35 % on the undrawn portion of the Revolving Credit Facility.

4 unchanged sentences

The Credit Agreement requires the Intermediate Partnership to maintain (a) a debt to cash flow ratio of not more than 2.5 to 1.0, (b) a cash flow to interest expense ratio of not less than 3.0 to 1.0 and (c) a first lien debt to cash flow ratio of not more than 1.5 to 1.0, in each case, during the four most recently ended fiscal quarters.

The debt to cash flow ratio, cash flow to interest expense ratio and first lien debt to cash flow ratio were 1.82 to 1.0, 8.63 to 1.0 and 0.88 to 1.0, respectively, for the trailing twelve months ended June 30, 2020.

We remain in compliance with the covenants of the Credit Agreement as of June 30, 2020.

The debt to cash flow ratio, cash flow to interest expense ratio and first lien debt to cash flow ratio were 1.69 to 1.0, 8.22 to 1.0 and 0.69 to 1.0, respectively, for the trailing twelve months ended September 30, 2020.

We remain in compliance with the covenants of the Credit Agreement as of September 30, 2020.

Senior Notes.

12 unchanged sentences

In October 2019, we extended the term of the Securitization Facility to January 2021.

At June 30, 2020, we had a $ 38.9 million outstanding balance under the Securitization Facility.

At September 30, 2020, we had a $ 72.2 million outstanding balance under the Securitization Facility.

May 2019 Equipment Financing .

26 unchanged sentences

Alliance Minerals completed funding of this commitment in 2018.

Alliance Minerals' limited partner interest in AllDale III at June 30, 2020 was 13.9 %.

Alliance Minerals' limited partner interest in AllDale III at September 30, 2020 was 13.9 %.

The AllDale III Partnership Agreement includes a 25 % profits interest for the general partner, subject to a return hurdle equal to the greater of 125 % of cumulative capital contributions and a 10 % internal rate of return, and following an 80/20 "catch-up"

8 unchanged sentences

Craft, jointly, and two limited liability companies ("Craft Companies") owned by irrevocable trusts established by Mr.

Craft and his children, entered into a limited liability company agreement to form WKY CoalPlay, LLC ("WKY CoalPlay").

Craft and his children, entered into a limited liability company agreement to form WKY CoalPlay.

WKY CoalPlay was formed, in part, to purchase and lease coal reserves.

2 unchanged sentences

In December 2014 and February 2015, we entered into various coal reserve leases with WKY CoalPlay.

During the six months ended June 30, 2020, we paid $ 10.8 million of advanced royalties to WKY CoalPlay.

During the nine months ended September 30, 2020, we paid $ 10.8 million to WKY CoalPlay under these leases.

As discussed in Item 8.

Financial Statements and Supplementary Data—Note 20 – Related-Party Transactions in our Annual Report on Form 10-K for the year ended December 31, 2019, we have the option to acquire the coal reserves leased from WKY CoalPlay at any time during a three-year period ending in December 2020, with respect to a portion of the reserves, and ending in February 2021 with respect to the remainder of the reserves.

leased from WKY CoalPlay at any time during a three-year period ending in December 2020, with respect to a portion of the reserves, and ending in February 2021 with respect to the remainder of the reserves.

In all cases, the options provide for a purchase price that would provide WKY CoalPlay a 7.0 % internal rate of return on its investment in the reserves taking into account payments previously made under the leases.

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

5 unchanged sentences

As a result, as part of our First Quarter impairment assessment, we compared the fair value of our investment to its carrying value and concluded that the fair value exceeded the carrying value and no impairment in our investment was necessary.

In our second quarter impairment assessment, amid a modest recovery in commodity futures prices and increased clarity into production levels by operators, we again compared the fair value of our investment to its carrying value and concluded no impairment was necessary.

In our subsequent quarterly impairment assessments, amid a modest recovery in commodity futures prices and increased clarity into production levels by operators, we again compared the fair value of our investment to its carrying value and concluded no impairment was necessary.

To calculate the fair value of the investment we used an income approach utilizing a discounted cash flow model based on our estimate of both volume, prices and expenses from information available to us.

19 unchanged sentences

February 14, 2020

In response to the disruptions to the economy and the uncertainty surrounding the COVID-19 pandemic, the Board of Directors of ARLP's general partner suspended the cash distribution to unitholders for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020.

In response to the disruptions to the economy and the uncertainty surrounding the COVID-19 pandemic, the Board of Directors of ARLP's general partner began suspending cash distributions to unitholders with the First Quarter and has continued through the quarter ended December 31, 2020.

Unit Repurchase Program

2 unchanged sentences

The unit repurchase program authorization does not obligate us to repurchase any dollar amount or number of units.

No unit repurchases were made during the six months ended June 30, 2020.

No unit repurchases were made during the nine months ended September 30, 2020.

Since inception of the unit repurchase program, we have repurchased and retired 5,460,639 units at an average unit price of $ 17.12 for an aggregate purchase price of $ 93.5 million.

1 unchanged sentence

Change in Partners' Capital

The following tables present the quarterly change in Partners' Capital for the six months ended June 30, 2020 and 2019:

The following tables present the quarterly change in Partners' Capital for the nine months ended September 30, 2020 and 2019:

Limited Partner

21 unchanged sentences

Balance at June 30, 2020

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Common unit-based compensation

Distributions from consolidated company to noncontrolling interest

Balance at September 30, 2020

Limited Partner

22 unchanged sentences

Balance at June 30, 2019

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Common unit-based compensation

Distributions on deferred common unit-based compensation

Distributions from consolidated company to noncontrolling interest

Distributions to Partners

Balance at September 30, 2019

REVENUE FROM CONTRACTS WITH CUSTOMERS

1 unchanged sentence

(in thousands)

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Oil & gas royalties

2 unchanged sentences

Total revenues

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Oil & gas royalties

2 unchanged sentences

Total revenues

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Oil & gas royalties

2 unchanged sentences

Total revenues

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Oil & gas royalties

2 unchanged sentences

Total revenues

The following table illustrates the amount of our transaction price for all current coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2020 and disaggregated by segment and contract duration.

The following table illustrates the amount of our transaction price for all current coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2020 and disaggregated by segment and contract duration.

(in thousands)

5 unchanged sentences

We utilize the two-class method in calculating basic and diluted earnings per limited partner unit ("EPU").

Net income (loss) attributable to ARLP is allocated to limited partners and participating securities under deferred compensation plans, which include rights to nonforfeitable distributions or distribution equivalents.

Our participating securities are outstanding awards under our Long-Term Incentive Plan ("LTIP") and phantom units in notional accounts under our

Supplemental Executive Retirement Plan ("SERP") and the MGP Amended and Restated Deferred Compensation Plan for Directors ("Directors' Deferred Compensation Plan").

The following is a reconciliation of net income (loss) attributable to ARLP used for calculating basic and diluted earnings per unit and the weighted-average units used in computing EPU for the three and six months ended June 30, 2020 and 2019:

Net income attributable to ARLP is allocated to limited partners and participating securities under deferred compensation plans, which include rights to nonforfeitable distributions or distribution equivalents.

Net losses attributable to ARLP are allocated to limited partners but not to participating securities.

Our participating securities are outstanding awards under

our Long-Term Incentive Plan ("LTIP") and phantom units in notional accounts under our Supplemental Executive Retirement Plan ("SERP") and the MGP Amended and Restated Deferred Compensation Plan for Directors ("Directors' Deferred Compensation Plan").

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands, except per unit data)

7 unchanged sentences

Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive.

The combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 661 and 654 for the three and six months ended June 30, 2020, respectively, and 1,060 and 1,227 for the three and six months ended June 30, 2019, respectively, were considered anti-dilutive under the treasury stock method .

The combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 661 and 656 for the three and nine months ended September 30, 2020, respectively, and 1,133 and 1,216 for the three and nine months ended September 30, 2019, respectively, were considered anti-dilutive under the treasury stock method .

WORKERS' COMPENSATION AND PNEUMOCONIOSIS

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

6 unchanged sentences

Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claims development patterns, mortality, medical costs and interest rates.

We conducted a mid-year 2020 review of our actuarial assumptions which resulted in a valuation loss in 2020 due to unfavorable changes in claims development and a decrease in the discount rate from 2.81 % to 2.05 % .

Our mid-year 2019 actuarial review resulted in a valuation loss in 2019 due to unfavorable changes in claims development and a decrease in the discount rate from 3.89 % to 3.06 % .

We conducted a 2020 mid-year review of our actuarial assumptions which resulted in a valuation loss due to unfavorable changes in claims development and a decrease in the discount rate from 2.81 % to 2.05 % .

Our 2019 mid-year actuarial review resulted in a valuation loss due to unfavorable changes in claims development and a decrease in the discount rate from 3.89 % to 3.06 % .

We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for a claim have been met.

1 unchanged sentence

Our workers' compensation liability above is presented on a gross basis and does not include our expected receivables on our insurance policy.

Our receivables for traumatic injury claims under this policy as of June 30, 2020 are $ 7.1 million and are included in Other long-term assets on our condensed consolidated balance sheet.

Our receivables for traumatic injury claims under this policy as of September 30, 2020 are $ 7.1 million and are included in Other long-term assets on our condensed consolidated balance sheet.

Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis, or black lung, benefits to eligible employees and former employees and their dependents.

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

15 unchanged sentences

As provided under the distribution equivalent rights ("DERs") provisions of the LTIP and the terms of the LTIP awards, all non-vested grants include contingent rights to receive quarterly distributions in cash or, at the discretion of the Compensation Committee, phantom units in lieu of cash credited to a bookkeeping account with value equal to the cash distributions we make to unitholders during the vesting period.

A summary of non-vested LTIP grants as of and for the six months ended June 30, 2020 is as follows:

A summary of non-vested LTIP grants as of and for the nine months ended September 30, 2020 is as follows:

Number of units

1 unchanged sentence

Non-vested grants at January 1, 2020

Non-vested grants at June 30, 2020 (2)

(1) During the six months ended June 30, 2020, we issued 279,622 unrestricted common units to the LTIP participants.

Non-vested grants at September 30, 2020 (2)

(1) During the nine months ended September 30, 2020, we issued 279,622 unrestricted common units to the LTIP participants.

The remaining vested units were settled in cash to satisfy tax withholding obligations of the LTIP participants.

(2) Represents total non-vested grants outstanding including 675,302 restricted units that were granted in 2019 (the "2019 Grants").

During the first quarter of 2020, it was determined that the vesting requirements for the 2019 Grants were not probable of being satisfied.

LTIP expense was $ 1.6 million and $ 2.7 million for the three months ended June 30, 2020 and 2019, respectively, and $ 0.9 million and $ 5.1 million for the six months ended June 30, 2020 and 2019, respectively.

LTIP expense for the six months ended June 30, 2020 includes the reversal in the first quarter of $ 4.8 million of cumulative previously recognized expense for the 2019 Grants, which were determined to be not probable of vesting, offset in part by related DERs for the 2019 Grants previously recorded to equity and then expensed.

The total obligation associated with the LTIP as of June 30, 2020 was $ 9.7 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

As of June 30, 2020, we had 1,439,790 restricted units that are expected to vest, with a weighted average grant date fair value of $ 13.33 per unit and an intrinsic value of $ 4.7 million.

During the First Quarter, it was determined that the vesting requirements for the 2019 Grants were not probable of being satisfied.

LTIP expense was $ 1.6 million and $ 2.7 million for the three months ended September 30, 2020 and 2019, respectively, and $ 2.5 million and $ 7.9 million for the nine months ended September 30, 2020 and 2019, respectively.

LTIP expense for the nine months ended September 30, 2020 includes the reversal in the First Quarter of $ 4.8 million of cumulative previously recognized expense for the 2019 Grants, which were determined to be not probable of vesting, offset in part by related DERs for the 2019 Grants previously recorded to equity and then expensed.

The total obligation associated with the LTIP as of September 30, 2020 was $ 11.3 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

As of September 30, 2020, we had 1,439,790 restricted units that are expected to vest, with a weighted average grant date fair value of $ 13.33 per unit and an intrinsic value of $ 4.0 million at $ 2.77 per unit.

There was $ 7.9 million in total unrecognized compensation expense related to the non-vested LTIP grants that are expected to vest.

13 unchanged sentences

All grants of phantom units under the SERP and Directors' Deferred Compensation Plan vest immediately.

A summary of SERP and Directors' Deferred Compensation Plan activity as of and for the six months ended June 30, 2020 is as follows:

A summary of SERP and Directors' Deferred Compensation Plan activity as of and for the nine months ended September 30, 2020 is as follows:

Number of units

3 unchanged sentences

Phantom units outstanding as of January 1, 2020

Phantom units outstanding as of June 30, 2020

Total SERP and Directors' Deferred Compensation Plan expense was $ 0.1 million and $ 0.4 million for the three months ended June 30, 2020 and 2019, respectively, and $ 0.4 million and $ 0.7 million for the six months ended June 30, 2020 and 2019, respectively.

As of June 30, 2020, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 16.3 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

Phantom units outstanding as of September 30, 2020

Total SERP and Directors' Deferred Compensation Plan expense was $ 0.1 million and $ 0.4 million for the three months ended September 30, 2020 and 2019, respectively, and $ 0.4 million and $ 1.1 million for the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 16.3 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

5 unchanged sentences

(1) Net periodic benefit cost for the Pension Plan is included in the Other expense line item within our condensed consolidated statements of income.

During the six months ended June 30, 2020, we made a contribution payment of $ 1.1 million to the Pension Plan for the 2019 plan year.

We expect to defer all remaining contributions to the Pension Plan during 2020 until January 2021 as provided for under the Coronavirus Aid Relief and Economic Security Act of 2020 enacted in response to the COVID-19 pandemic.

During the nine months ended September 30, 2020, we made contribution payments of $ 1.7 million to the Pension Plan for the 2019 plan year.

We expect to defer additional contributions to the Pension Plan until December 2020 as permitted under the Coronavirus Aid Relief and Economic Security Act of 2020 enacted in response to the COVID-19 pandemic.

SEGMENT INFORMATION

19 unchanged sentences

In February 2019, Kodiak redeemed our equity investment (see Note 11 – Investments).

In addition, Other and Corporate includes certain Alliance Resource Properties' land and coal mineral interest activities, Pontiki Coal, LLC's workers' compensation and pneumoconiosis liabilities, Wildcat Insurance, which assists the ARLP Partnership with its insurance requirements, and AROP Funding and Alliance Finance (both discussed in Note 9 – Long-Term Debt).

In addition, Other and Corporate includes certain Alliance Resource Properties, LLC's land and coal mineral interest activities, Pontiki Coal, LLC's workers' compensation and pneumoconiosis liabilities, Wildcat Insurance, LLC ("Wildcat Insurance"), which assists the ARLP Partnership with its insurance requirements, and AROP Funding and Alliance Finance (both discussed in Note 9 – Long-Term Debt).

In response to the impacts of the COVID-19 pandemic, we announced on March 30, 2020 a temporary cessation of coal production at our River View, Gibson, Hamilton and Warrior mining complexes in our Illinois Basin segment and on April 9, 2020 a temporary cessation of coal production at our MC Mining complex in our Appalachia segment.

Underground production operations resumed in May at the River View and Warrior mines in the Illinois Basin and subsequently at each of the remaining mining complexes – Gibson and Hamilton in the Illinois Basin and MC Mining in Appalachia.

Underground production operations resumed in the second quarter at each of our mining complexes.

All of our seven mining complexes are now producing coal.

However, several mines will be running at less than capacity due to a limited spot market in the U.S.

However, several mines continue running at less than capacity due to a limited spot market in the U.S.

and a seaborne market that continues to be sub-economic for U.S.

3 unchanged sentences

(in thousands)

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Revenues - Outside

4 unchanged sentences

Capital expenditures

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Revenues - Outside

4 unchanged sentences

Capital expenditures

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Revenues - Outside

4 unchanged sentences

Capital expenditures

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Revenues - Outside

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

6 unchanged sentences

Acquisition gain

Income tax (expense) benefit

Income tax expense

Acquisition gain attributable to noncontrolling interest

2 unchanged sentences

Net income (loss)

(5) Capital Expenditures shown exclude the AllDale Acquisition which occurred in January 2019 .

SUBSEQUENT EVENTS

Other than the event described in Note 12, there were no subsequent events.

We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business.

While there have been some signs of increasing economic activity, some states have paused or reversed re-opening plans, impacting economic recovery efforts.

With the timing and pace of recovery remaining unclear, the full extent of the operational and financial impact that the COVID-19 pandemic may have on us has yet to be determined.

As a result of these uncertainties, we are currently unable to accurately predict how COVID-19 will affect our results of operations in the future.

(5) Capital Expenditures shown exclude the AllDale Acquisition which occurred in January 2019 and Wing Acquisition whic h occurred in August 2019 .

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 1. Financial Statements