ALLIANCE RESOURCE PARTNERS LP 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except unit data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2020 2019 ​ ASSETS ​ ​ ​ ​ ​ CURRENT ASSETS: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 34,135 ​ $ 36,482 ​ Trade receivables ​ 120,875 ​ 161,679 ​ Other receivables ​ 1,919 ​ 256 ​ Inventories, net ​ 74,879 ​ 101,305 ​ Advance royalties ​ 344 ​ 1,844 ​ Prepaid expenses and other assets 10,984 18,019 ​ Total current assets ​ 243,136 ​ 319,585 ​ PROPERTY, PLANT AND EQUIPMENT: ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, at cost ​ 3,619,568 ​ 3,684,008 ​ Less accumulated depreciation, depletion and amortization ​ ( 1,758,646 ) ​ ( 1,675,022 ) ​ Total property, plant and equipment, net ​ 1,860,922 ​ 2,008,986 ​ OTHER ASSETS: ​ ​ ​ ​ ​ ​ ​ Advance royalties ​ 59,850 ​ 52,057 ​ Equity method investments ​ 27,415 ​ 28,529 ​ Goodwill ​ ​ 4,373 ​ ​ 136,399 ​ Operating lease right-of-use assets ​ ​ 15,388 ​ ​ 17,660 ​ Other long-term assets ​ 20,256 ​ 23,478 ​ Total other assets ​ 127,282 ​ 258,123 ​ TOTAL ASSETS ​ $ 2,231,340 ​ $ 2,586,694 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND PARTNERS' CAPITAL ​ ​ ​ ​ ​ ​ ​ CURRENT LIABILITIES: ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 54,789 ​ $ 80,566 ​ Accrued taxes other than income taxes ​ 17,397 ​ 15,768 ​ Accrued payroll and related expenses ​ 41,667 ​ 36,575 ​ Accrued interest ​ 12,691 ​ 5,664 ​ Workers' compensation and pneumoconiosis benefits ​ 11,162 ​ 11,175 ​ Current finance lease obligations ​ 732 ​ 8,368 ​ Current operating lease obligations ​ 1,863 ​ 3,251 ​ Other current liabilities ​ 23,803 ​ 21,062 ​ Current maturities, long-term debt, net ​ 89,271 ​ 13,157 ​ Total current liabilities ​ 253,375 ​ 195,586 ​ LONG-TERM LIABILITIES: ​ ​ ​ ​ ​ ​ ​ Long-term debt, excluding current maturities, net ​ 571,019 ​ 768,194 ​ Pneumoconiosis benefits ​ 96,906 ​ 94,389 ​ Accrued pension benefit ​ 41,862 ​ 44,858 ​ Workers' compensation ​ 46,404 ​ 45,503 ​ Asset retirement obligations ​ 132,627 ​ 133,018 ​ Long-term finance lease obligations ​ 1,656 ​ 2,224 ​ Long-term operating lease obligations ​ 13,599 ​ 14,316 ​ Other liabilities ​ 21,109 ​ 23,182 ​ Total long-term liabilities ​ 925,182 ​ 1,125,684 ​ Total liabilities ​ 1,178,557 ​ 1,321,270 ​ ​ ​ ​ ​ ​ ​ ​ ​ PARTNERS' CAPITAL: ​ ​ ​ ​ ​ ​ ​ ARLP Partners' Capital: ​ ​ ​ ​ ​ ​ ​ Limited Partners - Common Unitholders 127,195,219 and 126,915,597 units outstanding, respectively ​ 1,116,626 ​ 1,331,482 ​ Accumulated other comprehensive loss ​ ( 75,272 ) ​ ( 77,993 ) ​ Total ARLP Partners' Capital ​ 1,041,354 ​ 1,253,489 ​ Noncontrolling interest ​ ​ 11,429 ​ ​ 11,935 ​ Total Partners' Capital ​ ​ 1,052,783 ​ ​ 1,265,424 ​ TOTAL LIABILITIES AND PARTNERS' CAPITAL ​ $ 2,231,340 ​ $ 2,586,694 ​ ​ See notes to condensed consolidated financial statements. 1 Table of Contents ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except unit and per unit data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2020 2019 2020 2019 SALES AND OPERATING REVENUES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 335,767 ​ $ 420,005 ​ $ 886,690 ​ $ 1,357,331 ​ Oil & gas royalties ​ ​ 9,693 ​ ​ 13,969 ​ ​ 31,718 ​ ​ 36,254 ​ Transportation revenues ​ 6,226 ​ 20,024 ​ 16,722 ​ 82,892 ​ Other revenues ​ 3,965 ​ 10,728 ​ 26,486 ​ 31,905 ​ Total revenues ​ 355,651 ​ 464,726 ​ 961,616 ​ 1,508,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EXPENSES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses (excluding depreciation, depletion and amortization) ​ 216,027 ​ 278,254 ​ 637,533 ​ 895,255 ​ Transportation expenses ​ 6,226 ​ 20,024 ​ 16,722 ​ 82,892 ​ Outside coal purchases ​ — ​ 10,599 ​ — ​ 15,910 ​ General and administrative ​ 13,871 ​ 17,885 ​ 41,131 ​ 55,218 ​ Depreciation, depletion and amortization ​ 80,182 ​ 72,348 ​ 237,662 ​ 220,400 ​ Asset impairments ​ — ​ 15,190 ​ 24,977 ​ 15,190 ​ Goodwill impairment ​ ​ — ​ — ​ ​ 132,026 ​ — ​ Total operating expenses ​ 316,306 ​ 414,300 ​ 1,090,051 ​ 1,284,865 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME (LOSS) FROM OPERATIONS ​ 39,345 ​ 50,426 ​ ( 128,435 ) ​ 223,517 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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) ​ ( 11,186 ) ​ ( 11,698 ) ​ ( 34,911 ) ​ ( 33,831 ) ​ Interest income ​ 30 ​ 92 ​ 112 ​ 321 ​ Equity method investment income ​ 62 ​ 659 ​ 650 ​ 1,533 ​ Equity securities income ​ — ​ — ​ — ​ 12,906 ​ Acquisition gain ​ ​ — ​ — ​ — ​ 177,043 ​ Other expense ​ ( 723 ) ​ ( 228 ) ​ ( 1,456 ) ​ ( 370 ) ​ INCOME (LOSS) BEFORE INCOME TAXES ​ 27,528 ​ 39,251 ​ ( 164,040 ) ​ 381,119 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME TAX EXPENSE ​ 293 ​ 50 ​ 111 ​ 130 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME (LOSS) ​ ​ 27,235 ​ ​ 39,201 ​ ​ ( 164,151 ) ​ ​ 380,989 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST ​ ​ ( 36 ) ​ ( 117 ) ​ ( 97 ) ​ ( 7,407 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME (LOSS) ATTRIBUTABLE TO ARLP ​ $ 27,199 ​ $ 39,084 ​ $ ( 164,248 ) ​ $ 373,582 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED ​ $ 0.21 ​ $ 0.30 ​ $ ( 1.29 ) ​ $ 2.86 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED ​ 127,195,219 ​ 128,391,191 ​ 127,154,398 ​ 128,311,609 ​ ​ See notes to condensed consolidated financial statements . ​ 2 Table of Contents ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ ​ ​ 2020 2019 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME (LOSS) ​ $ 27,235 ​ $ 39,201 ​ $ ( 164,151 ) ​ $ 380,989 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE INCOME (LOSS): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit pension plan ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of prior service cost (1) ​ ​ 47 ​ ​ 46 ​ ​ 140 ​ ​ 139 ​ Amortization of net actuarial loss (1) ​ 969 ​ 980 ​ 3,096 ​ 2,941 ​ Total defined benefit pension plan adjustments ​ 1,016 ​ 1,026 ​ 3,236 ​ 3,080 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pneumoconiosis benefits ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net actuarial loss ​ — ​ — ​ — ​ ( 3,465 ) ​ Amortization of net actuarial gain (1) ​ ( 172 ) ​ ( 1,145 ) ​ ( 515 ) ​ ( 3,436 ) ​ Total pneumoconiosis benefits adjustments ​ ( 172 ) ​ ( 1,145 ) ​ ( 515 ) ​ ( 6,901 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE INCOME (LOSS) ​ 844 ​ ( 119 ) ​ 2,721 ​ ( 3,821 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ COMPREHENSIVE INCOME (LOSS) ​ ​ 28,079 ​ ​ 39,082 ​ ​ ( 161,430 ) ​ ​ 377,168 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Comprehensive income attributable to noncontrolling interest ​ ​ ( 36 ) ​ ​ ( 117 ) ​ ​ ( 97 ) ​ ​ ( 7,407 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ARLP ​ $ 28,043 ​ $ 38,965 ​ $ ( 161,527 ) ​ $ 369,761 ​ (1) Amortization of prior service cost and net actuarial gain or loss is included in the computation of net periodic benefit cost (see Notes 15 and 17 for additional details). ​ See notes to condensed consolidated financial statements. ​ 3 Table of Contents ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ ​ September 30, ​ ​ 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM OPERATING ACTIVITIES ​ $ 291,788 ​ $ 408,418 ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment: ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ( 102,820 ) ​ ( 241,142 ) ​ Change in accounts payable and accrued liabilities ​ ( 9,698 ) ​ 319 ​ Proceeds from sale of property, plant and equipment ​ 2,750 ​ 892 ​ Distributions received from investments in excess of cumulative earnings ​ ​ 841 ​ 2,309 ​ Payments for acquisitions of businesses, net of cash acquired ​ — ​ ( 320,232 ) ​ Cash received from redemption of equity securities ​ ​ — ​ 134,288 ​ Net cash used in investing activities ​ ( 108,927 ) ​ ( 423,566 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ Borrowings under securitization facility ​ ​ 46,100 ​ 153,500 ​ Payments under securitization facility ​ ​ ( 47,700 ) ​ ( 179,000 ) ​ Proceeds from equipment financings ​ ​ 14,705 ​ 10,000 ​ Payments on equipment financings ​ ​ ( 10,622 ) ​ ( 1,021 ) ​ Borrowings under revolving credit facilities ​ 70,000 ​ 300,000 ​ Payments under revolving credit facilities ​ ( 190,000 ) ​ ( 235,000 ) ​ Payments on finance lease obligations ​ ( 8,204 ) ​ ( 23,270 ) ​ Payment of debt issuance costs ​ ( 5,821 ) ​ — ​ Payments for purchases of units under unit repurchase program ​ ​ — ​ ( 5,251 ) ​ Payments for taxes related to net settlement of issuance of units in deferred compensation plans ​ ( 1,310 ) ​ ( 7,817 ) ​ Distributions paid to Partners ​ ​ ( 51,753 ) ​ ( 208,653 ) ​ Other ​ ( 603 ) ​ ( 673 ) ​ Net cash used in financing activities ​ ( 185,208 ) ​ ( 197,185 ) ​ NET CHANGE IN CASH AND CASH EQUIVALENTS ​ ( 2,347 ) ​ ( 212,333 ) ​ CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ​ 36,482 ​ 244,150 ​ CASH AND CASH EQUIVALENTS AT END OF PERIOD ​ $ 34,135 ​ $ 31,817 ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL CASH FLOW INFORMATION: ​ ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 26,686 ​ $ 23,931 ​ Cash paid for income taxes ​ $ 10 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL NON-CASH ACTIVITY: ​ ​ ​ ​ ​ ​ Accounts payable for purchase of property, plant and equipment ​ $ 4,806 ​ $ 14,904 ​ Right-of-use assets acquired by operating lease ​ $ 278 ​ $ 25,321 ​ Market value of common units issued under deferred compensation plans before tax withholding requirements ​ $ 3,837 ​ $ 17,415 ​ Fair value of liabilities assumed in acquisition of business ​ $ — ​ $ 1,921 ​ ​ See notes to condensed consolidated financial statements. ​ 4 Table of Contents ​ ​ ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES ​ NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 1. ORGANIZATION AND PRESENTATION ​ Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements ​ ● References to "we," "us," "our" or "ARLP Partnership" mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries. ● References to "ARLP" mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis. ● References to "MGP" mean Alliance Resource Management GP, LLC, ARLP's general partner. ● References to "Intermediate Partnership" mean Alliance Resource Operating Partners, L.P., the intermediate partnership of Alliance Resource Partners, L.P. ● References to "Alliance Coal" mean Alliance Coal, LLC, the holding company for the coal mining operations of Alliance Resource Operating Partners, L.P. ● References to "Alliance Minerals" mean Alliance Minerals, LLC, the holding company for the oil and gas minerals interests of Alliance Resource Partners, L.P. ​ Organization ​ ARLP is a Delaware limited partnership listed on the NASDAQ Global Select Market under the ticker symbol "ARLP." ARLP was formed in May 1999 and completed its initial public offering on August 19, 1999 when it acquired substantially all of the coal production and marketing assets of Alliance Resource Holdings, Inc., a Delaware corporation, and its subsidiaries. We are managed by our general partner, MGP, a Delaware limited liability company which holds a non-economic general partner interest in ARLP. ​ 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 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. ​ These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all of the information normally included with financial statements prepared in accordance with generally accepted accounting principles ("GAAP") of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. ​ These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2020. ​ Use of Estimates ​ The preparation of the ARLP Partnership's condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates. ​ 5 Table of Contents 2. NEW ACCOUNTING STANDARDS ​ New Accounting Standards Issued and Adopted ​ In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirement for Fair Value Measurement. ASU 2018-13 amended the fair value measurement guidance by removing and modifying certain disclosure requirements, while also adding new disclosure requirements including the requirement to disclose the range and weighted average of significant unobservable inputs used to develop certain Level 3 measurements. These changes are to be applied prospectively for only the most recent interim or annual period presented in the year of adoption. We adopted ASU 2018-13 on January 1, 2020. ​ In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments to require the use of a new forward-looking "expected loss" model that generally will result in earlier recognition of allowances for losses. The new standard requires disclosure of significantly more information related to these items. We adopted ASU 2016-13 on January 1, 2020 and because we do not have a history of credit losses on our financial instruments and have no material expected losses, the adoption of ASU 2016-13 did not have any material impact on our condensed consolidated financial statements. ​ 3. ACQUISITION ​ Wing ​ On August 2, 2019 (the "Wing Acquisition Date"), our subsidiary, AR Midland, LP ("AR Midland") acquired from Wing Resources LLC and Wing Resources II LLC (collectively, "Wing") approximately 9,000 net royalty acres in the Midland Basin, with exposure to more than 400,000 gross acres, for a cash purchase price of $ 144.9 million (the "Wing Acquisition"). The purchase price was funded with cash on hand and borrowings under the Revolving Credit Facility discussed in Note 9 – Long-Term Debt. The Wing Acquisition enhances our ownership position in the Permian Basin, expands our exposure to industry leading operators and furthers our business strategy to grow our Minerals segment. Concurrent with the Wing Acquisition, JC Resources LP, an entity owned by Joseph W. Craft III, the Chairman, President and Chief Executive Officer of MGP ("Mr. Craft"), acquired from Wing, in a separate transaction, mineral interests that we elected not to acquire. ​ 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 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. ​ The following table summarizes our final fair value allocation of assets acquired as of the Wing Acquisition Date incorporating measurement period adjustments made to the allocation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Previously ​ ​ ​ ​ ​ ​ ​ ​ Reported ​ Adjustments ​ Final ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mineral interests in proved properties ​ $ 58,084 ​ ​ 16,987 ​ $ 75,071 ​ Mineral interests in unproved properties ​ ​ 84,976 ​ ​ ( 17,275 ) ​ ​ 67,701 ​ Receivables ​ ​ 1,867 ​ ​ 288 ​ ​ 2,155 ​ Net assets acquired ​ $ 144,927 ​ ​ ​ ​ $ 144,927 ​ ​ The fair value of the mineral interests was determined using a weighting of both income and market approaches. Our income approach primarily comprised a discounted cash flow model. The assumptions used in the discounted cash flow model included estimated production, projected cash flows, forward oil & gas prices and a weighted average cost of 6 Table of Contents capital. Our market approach consisted of the observation of recent acquisitions in the Permian Basin to determine a market price for similar mineral interests. Certain assumptions used in our valuation are not observable in active markets; therefore, the fair value measurements represent Level 3 fair value measurements. The carrying value of the receivables represents the fair value given the short-term nature of the receivables. ​ 4. LONG-LIVED ASSET IMPAIRMENTS ​ 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 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. ​ 5. GOODWILL IMPAIRMENT ​ At December 31, 2019, our consolidated balance sheet included $ 136.4 million of goodwill, of which $ 132.0 million was associated with the reporting unit representing our Hamilton County Coal, LLC ("Hamilton") mine, which is included in our Illinois Basin segment. 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, 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. ​ We estimated the fair value of the Hamilton reporting unit using an income approach utilizing a discounted cash flow model. The assumptions used in the discounted cash flow model included estimated production, forward coal prices, operating expenses, capital expenditures and a weighted average cost of capital. Our forecasts of future cash flows considered market conditions at the time of the assessment and our estimate of the mine's performance in future years based on the information available to us. Key assumptions used in our valuation are not observable in active markets; therefore, the fair value measurements represent Level 3 fair value measurements. The fair value of the Hamilton reporting unit was determined to be below its carrying amount (including goodwill) by more than the recorded balance of goodwill associated with the reporting unit. 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 charge reduced our consolidated goodwill balance to $ 4.4 million. During the First Quarter, we also performed an interim test on ARLP's 7 Table of Contents remaining goodwill balances not associated with Hamilton and concluded no impairment was necessary for our other reporting units. ​ 6. CONTINGENCIES ​ Various lawsuits, claims and regulatory proceedings incidental to our business are pending against the ARLP Partnership. 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. ​ 7. INVENTORIES ​ Inventories consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2020 2019 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal ​ $ 38,531 ​ $ 63,645 ​ Supplies (net of reserve for obsolescence of $ 5,577 and $ 5,555 , respectively) ​ 36,348 ​ 37,660 ​ Total inventories, net ​ $ 74,879 ​ $ 101,305 ​ ​ ​ 8. FAIR VALUE MEASUREMENTS ​ The following table summarizes our fair value measurements within the hierarchy not included elsewhere in these notes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ December 31, 2019 ​ ​ Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 ​ ​ (in thousands) ​ Long-term debt ​ $ — ​ $ 494,712 ​ $ — ​ $ — ​ $ 736,206 ​ $ — ​ Total ​ $ — ​ $ 494,712 ​ $ — ​ $ — ​ $ 736,206 ​ $ — ​ ​ The carrying amounts for cash equivalents, accounts receivable, accounts payable, accrued and other liabilities approximate fair value due to the short maturity of those instruments. ​ The estimated fair value of our long-term debt, including current maturities, is based on interest rates that we believe are currently available to us in active markets for issuance of debt with similar terms and remaining maturities (See Note 9 – Long-Term Debt). The fair value of debt, which is based upon these interest rates, is classified as a Level 2 measurement under the fair value hierarchy. ​ 8 Table of Contents 9. LONG-TERM DEBT ​ Long-term debt consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unamortized Discount and ​ ​ ​ Principal ​ Debt Issuance Costs ​ ​ ​ September 30, ​ December 31, ​ September 30, ​ December 31, ​ ​ 2020 2019 2020 2019 ​ ​ (in thousands) ​ Revolving credit facility ​ $ 135,000 ​ $ 255,000 ​ $ ( 7,280 ) ​ $ ( 3,050 ) ​ Senior notes ​ 400,000 ​ 400,000 ​ ( 4,192 ) ​ ( 4,879 ) ​ Securitization facility ​ ​ 72,200 ​ ​ 73,800 ​ ​ — ​ ​ — ​ May 2019 equipment financing ​ ​ 5,785 ​ ​ 8,199 ​ ​ — ​ ​ — ​ November 2019 equipment financing ​ ​ 44,890 ​ ​ 52,281 ​ ​ — ​ ​ — ​ June 2020 equipment financing ​ ​ 13,887 ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ 671,762 ​ 789,280 ​ ( 11,472 ) ​ ( 7,929 ) ​ Less current maturities ​ ( 89,271 ) ​ ( 13,157 ) ​ — ​ — ​ Total long-term debt ​ $ 582,491 ​ $ 776,123 ​ $ ( 11,472 ) ​ $ ( 7,929 ) ​ ​ Credit Facility. On March 9, 2020, our Intermediate Partnership entered into a Fifth Amended and Restated Credit Agreement (the "Credit Agreement") with various financial institutions. The Credit Agreement provides for a $ 537.75 million revolving credit facility, reducing to $ 459.5 million on May 23, 2021, including a sublimit of $ 125 million for the issuance of letters of credit and a sublimit of $ 15.0 million for swingline borrowings (the "Revolving Credit Facility"), with a termination date of March 9, 2024. The Credit Facility replaced the $ 494.75 million revolving credit facility extended to the Intermediate Partnership under its Fourth Amended and Restated Credit Agreement, dated as of January 27, 2017, by various banks and other lenders that would have expired on May 23, 2021. Concurrently with the entry into the Credit Agreement, we reorganized the entities holding our oil & gas interests such that Alliance Royalty, LLC became a direct wholly-owned subsidiary of Alliance Minerals. ​ The Credit Agreement is guaranteed by certain of our Intermediate Partnership's material direct and indirect subsidiaries (the "Restricted Subsidiaries") and is secured by substantially all of the assets of the Restricted Subsidiaries. The Credit Agreement is not guaranteed or secured by the assets of the Intermediate Partnership's oil & gas minerals subsidiary, Alliance Minerals, or its direct and indirect subsidiaries (collectively the "Unrestricted Subsidiaries"). 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 3.01 % 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. We utilize the Revolving Credit Facility, as appropriate, for working capital requirements, capital expenditures and investments, scheduled debt payments and distribution payments. ​ The Credit Agreement contains various restrictions affecting the Intermediate Partnership and its Restricted Subsidiaries including, among other things, restrictions on incurrence of additional indebtedness and liens, sale of assets, investments, mergers and consolidations and transactions with affiliates, including transactions with Unrestricted Subsidiaries. In each case, these restrictions are subject to various exceptions. In addition, the payment of cash distributions is restricted if such payment would result in a fixed charge coverage ratio of less than 1.0 to 1.0 (as defined in the Credit Agreement) for the four most recently ended fiscal quarters. 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 1.69 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. On April 24, 2017, the Intermediate Partnership and Alliance Resource Finance Corporation (as co-issuer), a wholly owned subsidiary of the Intermediate Partnership ("Alliance Finance"), issued an aggregate principal amount of $ 400.0 million of senior unsecured notes due 2025 ("Senior Notes") in a private placement to qualified 9 Table of Contents institutional buyers. The Senior Notes have a term of eight years , maturing on May 1, 2025 (the "Term") and accrue interest at an annual rate of 7.5 % . Interest is payable semi-annually in arrears on each May 1 and November 1. The indenture governing the Senior Notes contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of distributions or similar restricted payments, undertaking transactions with affiliates and limitations on asset sales. The issuers of the Senior Notes may redeem all or a part of the notes at any time at redemption prices set forth in the indenture governing the Senior Notes. ​ Accounts Receivable Securitization. On December 5, 2014, certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership entered into a $ 100.0 million accounts receivable securitization facility ("Securitization Facility"). Under the Securitization Facility, certain subsidiaries sell certain trade receivables on an ongoing basis to our Intermediate Partnership, which then sells the trade receivables to AROP Funding, LLC ("AROP Funding"), a wholly owned bankruptcy-remote special purpose subsidiary of our Intermediate Partnership, which in turn borrows on a revolving basis up to $ 100.0 million secured by the trade receivables. After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding. The Securitization Facility bears interest based on a Eurodollar Rate. The agreement governing the Securitization Facility contains customary terms and conditions, including limitations with regards to certain customer credit ratings. In October 2019, we extended the term of the Securitization Facility to January 2021. At September 30, 2020, we had a $ 72.2 million outstanding balance under the Securitization Facility. ​ May 2019 Equipment Financing . On May 17, 2019, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $ 10.0 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "May 2019 Equipment Financing"). The May 2019 Equipment Financing contains customary terms and events of default and provides for thirty-six monthly payments with an implicit interest rate of 6.25 % , maturing on May 1, 2022. Upon maturity, the equipment will revert back to the Intermediate Partnership. ​ November 2019 Equipment Financing. On November 6, 2019, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $ 53.1 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "November 2019 Equipment Financing"). The November 2019 Equipment Financing contains customary terms and events of default and an implicit interest rate of 4.75 % that provides for a four year term with forty-seven monthly payments of $ 1.0 million and a balloon payment of $ 11.6 million upon maturity on November 6, 2023. At maturity, the equipment will revert back to the Intermediate Partnership. ​ June 2020 Equipment Financing. On June 5, 2020, the Intermediate Partnership entered into an equipment financing arrangement accounted for as debt, wherein the Intermediate Partnership received $ 14.7 million in exchange for conveying its interest in certain equipment owned indirectly by the Intermediate Partnership and entering into a master lease agreement for that equipment (the "June 2020 Equipment Financing"). The June 2020 Equipment Financing contains customary terms and events of default and provides for forty-eight monthly payments with an implicit interest rate of 6.1 % , maturing on June 5, 2024. Upon maturity, the equipment will revert back to the Intermediate Partnership. ​ ​ ​ 10 Table of Contents 10. VARIABLE INTEREST ENTITIES ​ Cavalier Minerals ​ On November 10, 2014, our subsidiary, Alliance Minerals and Bluegrass Minerals Management, LLC ("Bluegrass Minerals") entered into a limited liability company agreement (the "Cavalier Agreement") to create Cavalier Minerals JV, LLC ("Cavalier Minerals"), which was formed to indirectly acquire oil & gas mineral interests through its ownership in AllDale Minerals LP ("AllDale I") and AllDale Minerals II, LP ("AllDale II", and collectively with AllDale I, "AllDale I & II"). Alliance Minerals owns a 96 % member interest in Cavalier Minerals, and Bluegrass Minerals owns a 4 % member interest in Cavalier Minerals and a profits interest which entitles it to receive distributions equal to 25 % of all distributions (including in liquidation) after all members have recovered their investment. Distributions with respect to Bluegrass Minerals' profits interest will be offset by all distributions received by Bluegrass Minerals from the former general partners of AllDale I & II. To date, there has been no profits interest distribution. We hold the managing member interest in Cavalier Minerals. Total contributions to and cumulative distributions from Cavalier Minerals are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Alliance ​ Bluegrass ​ ​ ​ Minerals ​ Minerals ​ ​ ​ (in thousands) ​ Contributions ​ $ 143,112 ​ $ 5,963 ​ Distributions ​ ​ 86,384 ​ ​ 3,598 ​ ​ We have concluded that Cavalier Minerals is a variable interest entity ("VIE") which we consolidate as the primary beneficiary because we are the managing member and a substantial equity owner in Cavalier Minerals. Bluegrass Minerals' equity ownership of Cavalier Minerals is accounted for as noncontrolling ownership interest in our condensed consolidated balance sheets. In addition, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our condensed consolidated statements of income. ​ AllDale III ​ In February 2017, Alliance Minerals committed to directly invest $ 30.0 million in AllDale Minerals III, LP ("AllDale III") which was created for similar investment purposes as AllDale I & II. Alliance Minerals completed funding of this commitment in 2018. 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" provision for the general partner. ​ Since AllDale III is structured as a limited partnership with the limited partners 1) not having the ability to remove the general partner and 2) not participating significantly in the operational decisions, we concluded that AllDale III is a VIE. We are not the primary beneficiary of AllDale III as we do not have the power to direct the activities that most significantly impact AllDale III's economic performance. We account for our ownership interest in the income or loss of AllDale III as an equity method investment. We record equity income or loss based on AllDale III's distribution structure. See Note 11 – Investments for more information. ​ WKY CoalPlay ​ On November 17, 2014, SGP Land, LLC ("SGP Land"), an entity owned indirectly by the Chairman, President and CEO of MGP ("Mr. Craft") and Kathleen S. 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. WKY CoalPlay was formed, in part, to purchase and lease coal reserves. WKY CoalPlay is managed by an individual who is an officer and director of Alliance Resource Holdings II, Inc. and trustee of the irrevocable trusts owning one of the Craft Companies. In December 2014 and February 2015, we entered into various coal reserve leases with 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 11 Table of Contents 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. ​ We have concluded that WKY CoalPlay is a VIE because of our ability to exercise options to acquire reserves under lease with WKY CoalPlay, which is not within the control of the equity holders and, if it occurs, could potentially limit the expected residual return to the owners of WKY CoalPlay. Once the options expire in December 2020 and February 2021, WKY CoalPlay will cease to be a VIE. We do not have any economic or governance rights related to WKY CoalPlay and our options that provide us with a variable interest in WKY CoalPlay's reserve assets do not give us any rights that constitute power to direct the primary activities that most significantly impact WKY CoalPlay's economic performance. SGP Land has the sole ability to replace the manager of WKY CoalPlay at its discretion and therefore has power to direct the activities of WKY CoalPlay. Consequently, we concluded that SGP Land is the primary beneficiary of WKY CoalPlay. ​ 11. INVESTMENTS ​ AllDale III ​ As discussed in Note 10 – Variable Interest Entities, we account for our ownership interest in the income or loss of AllDale III as an equity method investment. We record equity income or loss based on AllDale III's distribution structure. The changes in our equity method investment in AllDale III for each of the periods presented were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2020 2019 2020 2019 ​ ​ ​ (in thousands) ​ Beginning balance ​ $ 27,705 ​ $ 28,672 ​ $ 28,529 ​ $ 28,974 ​ Equity method investment income ​ ​ 62 ​ ​ 659 ​ ​ 650 ​ ​ 1,533 ​ Distributions received ​ ​ ( 352 ) ​ ​ ( 610 ) ​ ​ ( 1,491 ) ​ ​ ( 1,786 ) ​ Other ​ ​ — ​ ​ — ​ ​ ( 273 ) ​ ​ — ​ Ending balance ​ $ 27,415 ​ $ 28,721 ​ $ 27,415 ​ $ 28,721 ​ ​ As discussed in Note 4 – Long-Lived Asset Impairments, there was uncertainty related to energy demand in the First Quarter as a result of a) weak electricity demand and b) an oversupply and lack of storage for oil and natural gas, both due in part to the COVID-19 pandemic and other market and production factors, which could have impacted our investment in AllDale III. 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 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. Key assumptions used in our valuation are not observable in active markets; therefore, the fair value measurements represent Level 3 fair value measurements. The cash flow estimates used in our 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, an impairment of our investment could be necessary. ​ Kodiak ​ On July 19, 2017, Alliance Minerals purchased $ 100 million of Series A-1 Preferred Interests from Kodiak Gas Services, LLC ("Kodiak"), a privately-held company providing large-scale, high-utilization gas compression assets to customers operating primarily in the Permian Basin. This structured investment provided us with a quarterly cash or payment-in-kind return. On February 8, 2019, Kodiak redeemed our preferred interest for $ 135.0 million in cash resulting in an $ 11.5 million gain due to an early redemption premium. The gain is included in the Equity securities income line item. We no longer hold any ownership interests in Kodiak. Prior to redemption, we accounted for our ownership interests in Kodiak as equity securities without readily determinable fair values. ​ 12 Table of Contents ​ 12. PARTNERS' CAPITAL ​ Distributions ​ Distributions paid or declared during 2019 and 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Date Per Unit Cash Distribution Total Cash Distribution ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ February 14, 2019 ​ $ 0.5300 ​ $ 69,011 ​ May 15, 2019 ​ ​ 0.5350 ​ ​ 69,489 ​ August 14, 2019 ​ ​ 0.5400 ​ ​ 70,153 ​ November 14, 2019 ​ ​ 0.5400 ​ ​ 69,772 ​ Total ​ $ 2.1450 ​ $ 278,425 ​ ​ ​ ​ ​ ​ ​ ​ ​ February 14, 2020 ​ $ 0.4000 ​ $ 51,753 ​ Total ​ $ 0.4000 ​ $ 51,753 ​ ​ 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 ​ In May 2018, the MGP board of directors approved the establishment of a unit repurchase program authorizing us to repurchase and retire up to $ 100 million of ARLP common units. 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. 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 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. Total units repurchased include the repurchase and retirement of 35 units representing fractional units as part of the simplification transactions completed by the ARLP Partnership on May 31, 2018 which are not part of the unit repurchase program. ​ 13 Table of Contents Change in Partners' Capital ​ The following tables present the quarterly change in Partners' Capital for the nine months ended September 30, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Limited ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ Limited Partner ​ Partners' ​ Comprehensive ​ Noncontrolling ​ Total Partners' ​ ​ Units Capital Income (Loss) Interest Capital ​ ​ (in thousands, except unit data) ​ Balance at January 1, 2020 126,915,597 ​ $ 1,331,482 ​ $ ( 77,993 ) ​ $ 11,935 ​ $ 1,265,424 ​ Comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) — ​ ( 144,783 ) ​ — ​ ​ 76 ( 144,707 ) ​ Actuarially determined long-term liability adjustments — ​ — ​ 938 ​ — 938 ​ Total comprehensive loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 143,769 ) ​ Settlement of deferred compensation plans ​ 279,622 ​ ​ ( 1,310 ) ​ ​ — ​ ​ — ​ ​ ( 1,310 ) ​ Common unit-based compensation — ​ ( 527 ) ​ ​ — ​ ​ — ​ ​ ( 527 ) ​ Distributions on deferred common unit-based compensation — ​ ( 986 ) ​ ​ — ​ ​ — ​ ​ ( 986 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 288 ) ​ ​ ( 288 ) ​ Distributions to Partners — ​ ​ ( 50,767 ) ​ ​ — ​ ​ — ​ ​ ( 50,767 ) ​ Other ​ — ​ ​ ( 273 ) ​ ​ — ​ ​ — ​ ​ ( 273 ) ​ Balance at March 31, 2020 127,195,219 ​ ​ 1,132,836 ​ ​ ( 77,055 ) ​ ​ 11,723 ​ ​ 1,067,504 ​ Comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ ( 46,664 ) ​ — ​ ​ ( 15 ) ( 46,679 ) ​ Actuarially determined long-term liability adjustments — ​ — ​ 939 ​ — 939 ​ Total comprehensive loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 45,740 ) ​ Common unit-based compensation — ​ 1,610 ​ ​ — ​ ​ — ​ ​ 1,610 ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 222 ) ​ ​ ( 222 ) ​ Balance at June 30, 2020 127,195,219 ​ ​ 1,087,782 ​ ​ ( 76,116 ) ​ ​ 11,486 ​ ​ 1,023,152 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 27,199 ​ — ​ ​ 36 27,235 ​ Actuarially determined long-term liability adjustments — ​ — ​ 844 ​ — 844 ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 28,079 ​ Common unit-based compensation — ​ 1,645 ​ ​ — ​ ​ — ​ ​ 1,645 ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 93 ) ​ ​ ( 93 ) ​ Balance at September 30, 2020 127,195,219 ​ $ 1,116,626 ​ $ ( 75,272 ) ​ $ 11,429 ​ $ 1,052,783 ​ ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Limited ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ Limited Partner ​ Partners' ​ Comprehensive ​ Noncontrolling ​ Total Partners' ​ ​ Units Capital Loss Interest Capital ​ ​ (in thousands, except unit data) ​ Balance at January 1, 2019 128,095,511 ​ $ 1,229,268 ​ $ ( 46,871 ) ​ $ 5,290 ​ $ 1,187,687 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 276,428 ​ — ​ ​ 7,176 283,604 ​ Actuarially determined long-term liability adjustments — ​ — ​ ( 3,584 ) ​ — ( 3,584 ) ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 280,020 ​ Settlement of deferred compensation plans 596,650 ​ ( 7,817 ) ​ ​ — ​ ​ — ​ ​ ( 7,817 ) ​ Purchase of units under unit repurchase program ( 300,970 ) ​ ( 5,251 ) ​ ​ — ​ ​ — ​ ​ ( 5,251 ) ​ Common unit-based compensation — ​ 2,743 ​ ​ — ​ ​ — ​ ​ 2,743 ​ Distributions on deferred common unit-based compensation — ​ ( 1,280 ) ​ ​ — ​ ​ — ​ ​ ( 1,280 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 262 ) ​ ​ ( 262 ) ​ Distributions to Partners — ​ ​ ( 67,731 ) ​ ​ — ​ ​ — ​ ​ ( 67,731 ) ​ Balance at March 31, 2019 128,391,191 ​ ​ 1,426,360 ​ ​ ( 50,455 ) ​ ​ 12,204 ​ ​ 1,388,109 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 58,070 ​ — ​ ​ 114 58,184 ​ Actuarially determined long-term liability adjustments — ​ — ​ ( 118 ) ​ — ( 118 ) ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 58,066 ​ Common unit-based compensation — ​ 3,021 ​ ​ — ​ ​ — ​ ​ 3,021 ​ Distributions on deferred common unit-based compensation — ​ ( 799 ) ​ ​ — ​ ​ — ​ ​ ( 799 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 228 ) ​ ​ ( 228 ) ​ Distributions to Partners — ​ ​ ( 68,690 ) ​ ​ — ​ ​ — ​ ​ ( 68,690 ) ​ Balance at June 30, 2019 128,391,191 ​ ​ 1,417,962 ​ ​ ( 50,573 ) ​ ​ 12,090 ​ ​ 1,379,479 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 39,084 ​ — ​ ​ 117 39,201 ​ Actuarially determined long-term liability adjustments — ​ — ​ ( 119 ) ​ — ( 119 ) ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 39,082 ​ Common unit-based compensation — ​ 3,066 ​ ​ — ​ ​ — ​ ​ 3,066 ​ Distributions on deferred common unit-based compensation — ​ ( 822 ) ​ ​ — ​ ​ — ​ ​ ( 822 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 183 ) ​ ​ ( 183 ) ​ Distributions to Partners — ​ ​ ( 69,331 ) ​ ​ — ​ ​ — ​ ​ ( 69,331 ) ​ Balance at September 30, 2019 128,391,191 ​ $ 1,389,959 ​ $ ( 50,692 ) ​ $ 12,024 ​ $ 1,351,291 ​ ​ ​ 15 Table of Contents ​ 13. REVENUE FROM CONTRACTS WITH CUSTOMERS ​ The following table illustrates the disaggregation of our revenues by type, including a reconciliation to our segment presentation as presented in Note 18 – Segment Information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Illinois ​ ​ Other and ​ ​ ​ ​ ​ Basin Appalachia Minerals Corporate Elimination Consolidated ​ ​ ​ (in thousands) ​ Three Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 206,356 ​ $ 129,411 ​ $ — ​ $ — ​ $ — ​ $ 335,767 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 9,693 ​ ​ — ​ ​ — ​ ​ 9,693 ​ Transportation revenues ​ ​ 3,722 ​ ​ 2,504 ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,226 ​ Other revenues ​ ​ 282 ​ ​ 395 ​ ​ 28 ​ ​ 6,070 ​ ​ ( 2,810 ) ​ ​ 3,965 ​ Total revenues ​ $ 210,360 ​ $ 132,310 ​ $ 9,721 ​ $ 6,070 ​ $ ( 2,810 ) ​ $ 355,651 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 256,293 ​ $ 162,316 ​ $ — ​ $ 5,689 ​ $ ( 4,293 ) ​ $ 420,005 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 13,969 ​ ​ — ​ ​ — ​ ​ 13,969 ​ Transportation revenues ​ ​ 18,778 ​ ​ 1,246 ​ ​ — ​ ​ — ​ ​ — ​ ​ 20,024 ​ Other revenues ​ ​ 5,264 ​ ​ 852 ​ ​ 208 ​ ​ 7,434 ​ ​ ( 3,030 ) ​ ​ 10,728 ​ Total revenues ​ $ 280,335 ​ $ 164,414 ​ $ 14,177 ​ $ 13,123 ​ $ ( 7,323 ) ​ $ 464,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 539,614 ​ $ 347,076 ​ $ — ​ $ — ​ $ — ​ $ 886,690 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 31,718 ​ ​ — ​ ​ — ​ ​ 31,718 ​ Transportation revenues ​ ​ 10,731 ​ ​ 5,991 ​ ​ — ​ ​ — ​ ​ — ​ ​ 16,722 ​ Other revenues ​ ​ 1,674 ​ ​ 14,456 ​ ​ 113 ​ ​ 18,409 ​ ​ ( 8,166 ) ​ ​ 26,486 ​ Total revenues ​ $ 552,019 ​ $ 367,523 ​ $ 31,831 ​ $ 18,409 ​ $ ( 8,166 ) ​ $ 961,616 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 875,544 ​ $ 477,720 ​ $ — ​ $ 16,530 ​ $ ( 12,463 ) ​ $ 1,357,331 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 36,254 ​ ​ — ​ ​ — ​ ​ 36,254 ​ Transportation revenues ​ ​ 79,303 ​ ​ 3,589 ​ ​ — ​ ​ — ​ ​ — ​ ​ 82,892 ​ Other revenues ​ ​ 10,557 ​ ​ 2,753 ​ ​ 1,079 ​ ​ 26,745 ​ ​ ( 9,229 ) ​ ​ 31,905 ​ Total revenues ​ $ 965,404 ​ $ 484,062 ​ $ 37,333 ​ $ 43,275 ​ $ ( 21,692 ) ​ $ 1,508,382 ​ ​ 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 and ​ ​ ​ ​ 2020 2021 2022 Thereafter Total ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Illinois Basin coal revenues ​ $ 248,362 ​ $ 618,966 ​ $ 238,514 ​ $ 307,695 ​ $ 1,413,537 ​ Appalachia coal revenues ​ ​ 138,340 ​ ​ 130,075 ​ ​ 57,891 ​ ​ — ​ ​ 326,306 ​ Total coal revenues (1) ​ $ 386,702 ​ $ 749,041 ​ $ 296,405 ​ $ 307,695 ​ $ 1,739,843 ​ (1) Coal revenues generally consists of consolidated revenues excluding our Minerals segment . ​ 14. EARNINGS PER LIMITED PARTNER UNIT ​ We utilize the two-class method in calculating basic and diluted earnings per limited partner unit ("EPU"). 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 16 Table of Contents 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 nine months ended September 30, 2020 and 2019: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2020 2019 2020 2019 ​ ​ (in thousands, except per unit data) ​ Net income (loss) attributable to ARLP ​ $ 27,199 ​ $ 39,084 ​ $ ( 164,248 ) ​ $ 373,582 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributions to participating securities ​ — ​ ( 1,133 ) ​ — ​ ( 3,360 ) ​ Undistributed earnings attributable to participating securities ​ ( 581 ) ​ — ​ — ​ ( 2,655 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to ARLP available to limited partners ​ $ 26,618 ​ $ 37,951 ​ $ ( 164,248 ) ​ $ 367,567 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average limited partner units outstanding – basic and diluted ​ 127,195 ​ 128,391 ​ 127,154 ​ 128,312 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per limited partner unit - basic and diluted (1) ​ $ 0.21 ​ $ 0.30 ​ $ ( 1.29 ) ​ $ 2.86 ​ (1) Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. 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 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 . ​ ​ 15. WORKERS' COMPENSATION AND PNEUMOCONIOSIS ​ The changes in the workers' compensation liability, including current and long-term liability balances, for each of the periods presented were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ ​ ​ 2020 2019 2020 2019 ​ ​ ​ (in thousands) ​ Beginning balance ​ $ 54,478 ​ $ 53,425 ​ $ 53,384 ​ $ 49,539 ​ Accruals increase ​ 1,599 ​ 2,395 ​ 3,539 ​ 6,603 ​ Payments ​ ( 2,123 ) ​ ( 2,663 ) ​ ( 6,686 ) ​ ( 8,588 ) ​ Interest accretion ​ 319 ​ 402 ​ 958 ​ 1,204 ​ Valuation loss (1) ​ — ​ — ​ 3,078 ​ 4,801 ​ Ending balance ​ $ 54,273 ​ $ 53,559 ​ $ 54,273 ​ $ 53,559 ​ (1) Our estimate of the liability for the present value of current workers′ compensation benefits is based on our actuarial calculations. 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 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 % . ​ 17 Table of Contents 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. The deductible level may vary by claim year. 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 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. Components of the net periodic benefit cost for each of the periods presented are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ ​ 2020 2019 2020 2019 ​ ​ (in thousands) ​ Service cost ​ $ 882 ​ $ 656 ​ $ 2,643 ​ $ 1,947 Interest cost (1) ​ 750 ​ 761 ​ 2,249 ​ 2,283 ​ Net amortization (1) ​ ( 172 ) ​ ( 1,145 ) ​ ( 515 ) ​ ( 3,436 ) ​ Net periodic benefit cost ​ $ 1,460 ​ $ 272 ​ $ 4,377 ​ $ 794 ​ (1) Interest cost and net amortization are included in the Other expense line item within our condensed consolidated statements of income. ​ ​ 16. COMPENSATION PLANS ​ Long-Term Incentive Plan ​ We maintain the LTIP for certain employees and officers of MGP and its affiliates who perform services for us. The LTIP awards are grants of non-vested "phantom" or notional units, also referred to as "restricted units", which upon satisfaction of time and performance-based vesting requirements, entitle the LTIP participant to receive ARLP common units. Annual grant levels and vesting provisions for designated participants are recommended by the Chairman, President and Chief Executive Officer of MGP, subject to review and approval of the compensation committee of the MGP board of directors (the "Compensation Committee"). Vesting of all grants outstanding is subject to the satisfaction of certain financial tests. If it is not probable the financial tests for a particular grant will be met, any previously expensed amounts for the grant are reversed and no future expense will be recognized for those grants. Assuming the financial tests are met, grants issued to LTIP participants are expected to cliff vest on January 1st of the third year following issuance of the grants. We expect to settle these grants by delivery of ARLP common units, except for the portion of the grants that will satisfy employee tax withholding obligations of LTIP participants. We account for forfeitures of non-vested LTIP grants as they occur. 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. ​ 18 Table of Contents A summary of non-vested LTIP grants as of and for the nine months ended September 30, 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of units Weighted average grant date fair value per unit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-vested grants at January 1, 2020 ​ 1,603,378 ​ ​ ​ ​ Granted 950,035 ​ $ 9.62 ​ Vested (1) ( 424,486 ) ​ 23.22 ​ Forfeited ( 13,835 ) ​ 16.13 ​ Non-vested grants at September 30, 2020 (2) 2,115,092 ​ ​ ​ (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, 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. That expense is expected to be recognized over a weighted-average period of 1.6 years. ​ After consideration of the January 1, 2020 vesting and subsequent issuance of 279,622 common units, approximately 1.0 million units remain available under the LTIP for issuance in the future. This available issuance excludes all grants currently outstanding. Adding back the 2019 Grants that are not probable to vest, approximately 1.7 million units remain available under the LTIP for issuance in the future. ​ Supplemental Executive Retirement Plan and Directors' Deferred Compensation Plan ​ We utilize the SERP to provide deferred compensation benefits for certain officers and key employees. All allocations made to participants under the SERP are made in the form of "phantom" ARLP units and SERP distributions will be settled in the form of ARLP common units. The SERP is administered by the Compensation Committee. ​ Our directors participate in the Directors' Deferred Compensation Plan. Pursuant to the Directors' Deferred Compensation Plan, for amounts deferred either automatically or at the election of the director, a notional account is established and credited with notional common units of ARLP, described in the Directors' Deferred Compensation Plan as "phantom" units. Distributions from the Directors' Deferred Compensation Plan will be settled in the form of ARLP common units. ​ For both the SERP and Directors' Deferred Compensation Plan, when quarterly cash distributions are made with respect to ARLP common units, an amount equal to such quarterly distribution is credited to each participant's notional account as additional phantom units. All grants of phantom units under the SERP and Directors' Deferred Compensation Plan vest immediately. ​ 19 Table of Contents 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 Weighted average grant date fair value per unit Intrinsic value ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Phantom units outstanding as of January 1, 2020 ​ 631,365 ​ $ 25.48 ​ $ 6,831 ​ Granted ​ 29,544 ​ ​ 7.87 ​ ​ ​ ​ Phantom units outstanding as of September 30, 2020 660,909 ​ 24.69 ​ ​ 1,831 ​ ​ 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. ​ 17. COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS ​ Eligible employees at certain of our mining operations participate in a defined benefit plan (the "Pension Plan") that we sponsor. The Pension Plan is currently closed to new applicants and participants in the Pension Plan are no longer receiving benefit accruals for service. The benefit formula for the Pension Plan is a fixed dollar unit based on years of service. Components of the net periodic benefit cost for each of the periods presented are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ ​ 2020 2019 2020 2019 ​ ​ (in thousands) ​ Interest cost ​ $ 1,030 ​ $ 1,217 ​ $ 3,138 ​ $ 3,649 ​ Expected return on plan assets ​ ( 1,413 ) ​ ( 1,233 ) ​ ( 4,396 ) ​ ( 3,699 ) ​ Amortization of prior service cost ​ ​ 47 ​ ​ 46 ​ ​ 140 ​ ​ 139 ​ Amortization of net loss ​ 969 ​ 980 ​ 3,096 ​ 2,941 ​ Net periodic benefit cost (1) ​ $ 633 ​ $ 1,010 ​ $ 1,978 ​ $ 3,030 ​ (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 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. ​ 18. SEGMENT INFORMATION ​ We operate in the United States as a diversified natural resource company that generates income from the production and marketing of coal to major domestic and international utilities and industrial users as well as income from oil & gas mineral interests. We aggregate multiple operating segments into three reportable segments, Illinois Basin, Appalachia, and Minerals. We also have an "all other" category referred to as Other and Corporate. Our two coal reportable segments correspond to major coal producing regions in the eastern United States with similar economic characteristics including coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. The two coal segments include seven mining complexes operating in Illinois, Indiana, Kentucky, Maryland and West Virginia and a coal loading terminal in Indiana on the Ohio River. The Minerals reportable segment aggregates our oil & gas mineral interests which are located primarily in the Permian (Delaware and Midland), Anadarko (SCOOP/STACK), and Williston (Bakken) basins. We have no operations within our Minerals reportable segment other than receiving royalties and lease bonuses for our oil & gas mineral interests. ​ 20 Table of Contents The Illinois Basin reportable segment includes currently operating mining complexes (a) Gibson County Coal, LLC's ("Gibson") mining complex, which includes the Gibson South mine, (b) Warrior Coal, LLC's ("Warrior") mining complex, (c) River View Coal, LLC's ("River View") mining complex and (d) Hamilton's mining complex. The Illinois Basin reportable segment also includes our currently operating Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon") coal loading terminal in Indiana on the Ohio River. ​ The Illinois Basin reportable segment also includes Mid-America Carbonates, LLC ("MAC") and other support services as well as non-operating mining complexes (a) Gibson North mine, which ceased production in the fourth quarter of 2019, (b) Webster County Coal, LLC's Dotiki mining complex, which ceased production in August 2019, (c) White County Coal, LLC's Pattiki mining complex, (d) Hopkins County Coal, LLC's mining complex, and (e) Sebree Mining, LLC's mining complex. ​ The Appalachia reportable segment includes currently operating mining complexes (a) Mettiki mining complex, (b) Tunnel Ridge, LLC mining complex and (c) MC Mining, LLC ("MC Mining") mining complex. The Mettiki mining complex includes Mettiki Coal (WV), LLC's Mountain View mine and Mettiki Coal, LLC's preparation plant. The Appalachia reportable segment also includes the Penn Ridge assets, which are primarily coal mineral interests. ​ The Minerals reportable segment includes oil & gas mineral interests held by AR Midland and AllDale I & II and includes Alliance Minerals' equity interests in both AllDale III (Note 11 – Investments) and Cavalier Minerals. AR Midland acquired its mineral interest in the Wing Acquisition (Note 3 – Acquisition). ​ Other and Corporate includes marketing and administrative activities, Matrix Design Group, LLC and its subsidiaries ("Matrix Design"), Alliance Design Group, LLC ("Alliance Design") (collectively, Matrix Design and Alliance Design referred to as the "Matrix Group"), Alliance Coal's coal brokerage activity and Alliance Minerals' prior equity investment in Kodiak. In February 2019, Kodiak redeemed our equity investment (see Note 11 – Investments). 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 the second quarter at each of our mining complexes. All of our seven mining complexes are now producing coal. 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. production. Due to the ongoing and unforeseen impacts of the COVID-19 pandemic, on April 15, 2020, 116 employees of the Gibson County mining complex and 78 employees of the Hamilton mining complex were notified that their employment would be terminated permanently on April 26, 2020. In addition to reduced production levels and employment adjustments, we have also taken numerous actions to optimize cash flows and preserve liquidity by reducing capital expenditures, working capital, costs and expenses, including adjusting our corporate support structure to better align to current operating levels. ​ 21 Table of Contents Reportable segment results are presented below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Illinois ​ ​ Other and Elimination ​ ​ ​ Basin Appalachia Minerals Corporate (1) Consolidated ​ ​ (in thousands) Three Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 210,360 ​ $ 132,310 ​ $ 9,721 ​ $ 3,260 ​ $ — ​ $ 355,651 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,810 ​ ​ ( 2,810 ) ​ ​ — ​ Total revenues (2) ​ ​ 210,360 ​ ​ 132,310 ​ ​ 9,721 ​ ​ 6,070 ​ ​ ( 2,810 ) ​ ​ 355,651 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (3) ​ 125,021 ​ 86,447 ​ 849 ​ 4,908 ​ ( 475 ) ​ 216,750 ​ Segment Adjusted EBITDA (4) ​ 81,617 ​ 43,358 ​ 8,898 ​ 1,163 ​ ( 2,335 ) ​ 132,701 ​ Capital expenditures ​ 3,815 ​ 14,541 ​ — ​ 219 ​ — ​ 18,575 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 276,042 ​ $ 164,414 ​ $ 14,177 ​ $ 10,093 ​ $ — ​ $ 464,726 ​ Revenues - Intercompany ​ ​ 4,293 ​ ​ — ​ ​ — ​ ​ 3,030 ​ ​ ( 7,323 ) ​ ​ — ​ Total revenues (2) ​ ​ 280,335 ​ ​ 164,414 ​ ​ 14,177 ​ ​ 13,123 ​ ​ ( 7,323 ) ​ ​ 464,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (3) ​ 173,779 ​ 107,990 ​ 2,517 ​ 9,878 ​ ( 5,083 ) ​ 289,081 ​ Segment Adjusted EBITDA (4) ​ 87,780 ​ 55,178 ​ 12,202 ​ 3,243 ​ ( 2,240 ) ​ 156,163 ​ Capital expenditures ​ 49,829 ​ 25,056 ​ — ​ 630 ​ — ​ 75,515 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 552,019 ​ $ 367,523 ​ $ 31,831 ​ $ 10,243 ​ $ — ​ $ 961,616 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 8,166 ​ ​ ( 8,166 ) ​ ​ — ​ Total revenues (2) ​ ​ 552,019 ​ ​ 367,523 ​ ​ 31,831 ​ ​ 18,409 ​ ​ ( 8,166 ) ​ ​ 961,616 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (3) ​ 383,486 ​ ​ 240,116 ​ ​ 2,851 ​ ​ 13,697 ​ ​ ( 1,161 ) ​ 638,989 ​ Segment Adjusted EBITDA (4) ​ 157,803 ​ ​ 121,416 ​ ​ 29,534 ​ ​ 4,710 ​ ​ ( 7,005 ) ​ 306,458 ​ Total assets ​ 1,082,992 ​ ​ 470,261 ​ ​ 616,491 ​ ​ 468,590 ​ ​ ( 406,994 ) ​ 2,231,340 ​ Capital expenditures ​ 44,073 ​ ​ 57,798 ​ ​ — ​ ​ 949 ​ ​ — ​ 102,820 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 952,941 ​ $ 484,062 ​ $ 37,333 ​ $ 34,046 ​ $ — ​ $ 1,508,382 ​ Revenues - Intercompany ​ ​ 12,463 ​ ​ — ​ ​ — ​ ​ 9,229 ​ ​ ( 21,692 ) ​ ​ — ​ Total revenues (2) ​ ​ 965,404 ​ ​ 484,062 ​ ​ 37,333 ​ ​ 43,275 ​ ​ ( 21,692 ) ​ ​ 1,508,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (3) ​ 579,510 ​ ​ 312,861 ​ ​ 6,109 ​ ​ 28,026 ​ ​ ( 14,971 ) ​ 911,535 ​ Segment Adjusted EBITDA (4) ​ 306,592 ​ ​ 167,612 ​ ​ 32,432 ​ ​ 28,155 ​ ​ ( 6,721 ) ​ 528,070 ​ Total assets ​ 1,418,008 ​ ​ 493,133 ​ ​ 647,480 ​ ​ 561,171 ​ ​ ( 492,703 ) ​ 2,627,089 ​ Capital expenditures (5) ​ 157,759 ​ ​ 79,389 ​ ​ — ​ ​ 3,994 ​ ​ — ​ 241,142 ​ (1) The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group to our mining operations, coal sales and purchases between operations within different segments, sales of receivables to AROP Funding, financing between segments and insurance premiums paid to Wildcat Insurance. ​ (2) Revenues included in the Other and Corporate column are primarily attributable to the Matrix Group revenues, administrative service revenues from affiliates, Wildcat Insurance revenues and brokerage coal sales. ​ (3) Segment Adjusted EBITDA Expense includes operating expenses, coal purchases and other income. Transportation expenses are excluded as transportation revenues are recognized in an amount equal to transportation expenses when title passes to the customer. ​ ​ 22 Table of Contents The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ ​ 2020 2019 2020 2019 ​ ​ (in thousands) ​ Segment Adjusted EBITDA Expense ​ $ 216,750 ​ $ 289,081 ​ $ 638,989 ​ $ 911,535 ​ Outside coal purchases ​ — ​ ( 10,599 ) ​ — ​ ( 15,910 ) ​ Other expense ​ ( 723 ) ​ ( 228 ) ​ ( 1,456 ) ​ ( 370 ) ​ Operating expenses (excluding depreciation, depletion and amortization) ​ $ 216,027 ​ $ 278,254 ​ $ 637,533 ​ $ 895,255 ​ ​ (4) Segment Adjusted EBITDA is defined as net income (loss) attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, general and administrative expenses, settlement gain, asset and goodwill impairments and acquisition gain. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments. Consolidated Segment Adjusted EBITDA is reconciled to net income as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ ​ 2020 2019 2020 2019 ​ ​ (in thousands) ​ Consolidated Segment Adjusted EBITDA ​ $ 132,701 ​ $ 156,163 ​ $ 306,458 ​ $ 528,070 ​ General and administrative ​ ( 13,871 ) ​ ( 17,885 ) ​ ( 41,131 ) ​ ( 55,218 ) ​ Depreciation, depletion and amortization ​ ( 80,182 ) ​ ( 72,348 ) ​ ( 237,662 ) ​ ( 220,400 ) ​ Asset impairments ​ — ​ ( 15,190 ) ​ ( 24,977 ) ​ ( 15,190 ) ​ Goodwill impairment ​ ​ — ​ ​ — ​ ​ ( 132,026 ) ​ ​ — ​ Interest expense, net ​ ( 11,156 ) ​ ( 11,606 ) ​ ( 34,799 ) ​ ( 33,510 ) ​ Acquisition gain ​ ​ — ​ ​ — ​ ​ — ​ ​ 177,043 ​ Income tax expense ​ ( 293 ) ​ ( 50 ) ​ ( 111 ) ​ ( 130 ) ​ Acquisition gain attributable to noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 7,083 ) ​ Net income (loss) attributable to ARLP ​ $ 27,199 ​ $ 39,084 ​ $ ( 164,248 ) ​ $ 373,582 ​ Noncontrolling interest ​ ​ 36 ​ ​ 117 ​ ​ 97 ​ ​ 7,407 ​ Net income (loss) ​ $ 27,235 ​ $ 39,201 ​ $ ( 164,151 ) ​ $ 380,989 ​ ​ (5) Capital Expenditures shown exclude the AllDale Acquisition which occurred in January 2019 and Wing Acquisition whic h occurred in August 2019 . ​ ​ ​ 23 Table of Contents ​