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, ​ ​ ​ 2022 2021 ​ ASSETS ​ ​ ​ ​ ​ CURRENT ASSETS: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 278,471 ​ $ 122,403 ​ Trade receivables ​ 190,435 ​ 129,531 ​ Other receivables ​ 6,873 ​ 680 ​ Inventories, net ​ 98,765 ​ 60,302 ​ Advance royalties ​ 3,458 ​ 4,958 ​ Prepaid expenses and other assets 14,733 21,354 ​ Total current assets ​ 592,735 ​ 339,228 ​ PROPERTY, PLANT AND EQUIPMENT: ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, at cost ​ 3,765,400 ​ 3,608,347 ​ Less accumulated depreciation, depletion and amortization ​ ( 2,034,345 ) ​ ( 1,909,669 ) ​ Total property, plant and equipment, net ​ 1,731,055 ​ 1,698,678 ​ OTHER ASSETS: ​ ​ ​ ​ ​ ​ ​ Advance royalties ​ 70,181 ​ 63,524 ​ Equity method investments ​ 46,158 ​ 26,325 ​ Equity securities ​ ​ 32,639 ​ — ​ Goodwill ​ ​ 4,373 ​ ​ 4,373 ​ Operating lease right-of-use assets ​ ​ 15,395 ​ ​ 14,158 ​ Other long-term assets ​ 11,845 ​ 13,120 ​ Total other assets ​ 180,591 ​ 121,500 ​ TOTAL ASSETS ​ $ 2,504,381 ​ $ 2,159,406 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND PARTNERS' CAPITAL ​ ​ ​ ​ ​ ​ ​ CURRENT LIABILITIES: ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 97,032 ​ $ 69,586 ​ Accrued taxes other than income taxes ​ 25,133 ​ 17,787 ​ Accrued payroll and related expenses ​ 42,966 ​ 36,805 ​ Accrued interest ​ 12,500 ​ 5,000 ​ Workers' compensation and pneumoconiosis benefits ​ 12,296 ​ 12,293 ​ Current finance lease obligations ​ 302 ​ 840 ​ Current operating lease obligations ​ 2,757 ​ 1,820 ​ Other current liabilities ​ 45,375 ​ 17,375 ​ Current maturities, long-term debt, net ​ 15,133 ​ 16,071 ​ Total current liabilities ​ 253,494 ​ 177,577 ​ LONG-TERM LIABILITIES: ​ ​ ​ ​ ​ ​ ​ Long-term debt, excluding current maturities, net ​ 409,944 ​ 418,942 ​ Pneumoconiosis benefits ​ 109,687 ​ 107,560 ​ Accrued pension benefit ​ 23,415 ​ 25,590 ​ Workers' compensation ​ 39,031 ​ 44,911 ​ Asset retirement obligations ​ 124,622 ​ 123,517 ​ Long-term finance lease obligations ​ 533 ​ 618 ​ Long-term operating lease obligations ​ 12,778 ​ 12,366 ​ Deferred income tax liabilities ​ 37,607 ​ 391 ​ Other liabilities ​ 25,450 ​ 21,865 ​ Total long-term liabilities ​ 783,067 ​ 755,760 ​ Total liabilities ​ 1,036,561 ​ 933,337 ​ ​ ​ ​ ​ ​ ​ ​ ​ COMMITMENTS AND CONTINGENCIES - (NOTE 4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PARTNERS' CAPITAL: ​ ​ ​ ​ ​ ​ ​ ARLP Partners' Capital: ​ ​ ​ ​ ​ ​ ​ Limited Partners - Common Unitholders 127,195,219 units outstanding ​ 1,518,679 ​ 1,279,183 ​ Accumulated other comprehensive loss ​ ( 61,843 ) ​ ( 64,229 ) ​ Total ARLP Partners' Capital ​ 1,456,836 ​ 1,214,954 ​ Noncontrolling interest ​ ​ 10,984 ​ ​ 11,115 ​ Total Partners' Capital ​ ​ 1,467,820 ​ ​ 1,226,069 ​ TOTAL LIABILITIES AND PARTNERS' CAPITAL ​ $ 2,504,381 ​ $ 2,159,406 ​ ​ See notes to condensed consolidated financial statements. 1 Table of Contents ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except unit and per unit data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2022 2021 2022 2021 SALES AND OPERATING REVENUES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 550,563 ​ $ 362,264 ​ $ 1,470,730 ​ $ 975,725 ​ Oil & gas royalties ​ ​ 35,312 ​ ​ 20,109 ​ ​ 102,166 ​ ​ 51,222 ​ Transportation revenues ​ 28,548 ​ 22,027 ​ 93,305 ​ 45,153 ​ Other revenues ​ 13,997 ​ 11,039 ​ 39,583 ​ 24,404 ​ Total revenues ​ 628,420 ​ 415,439 ​ 1,705,784 ​ 1,096,504 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EXPENSES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses (excluding depreciation, depletion and amortization) ​ 330,298 ​ 233,201 ​ 908,546 ​ 642,760 ​ Transportation expenses ​ 28,548 ​ 22,027 ​ 93,305 ​ 45,153 ​ Outside coal purchases ​ — ​ 6,065 ​ 151 ​ 6,179 ​ General and administrative ​ 21,341 ​ 18,655 ​ 62,394 ​ 51,651 ​ Depreciation, depletion and amortization ​ 70,143 ​ 68,763 ​ 200,191 ​ 192,698 ​ Total operating expenses ​ 450,330 ​ 348,711 ​ 1,264,587 ​ 938,441 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME FROM OPERATIONS ​ 178,090 ​ 66,728 ​ 441,197 ​ 158,063 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense (net of interest capitalized for the three and nine months ended September 30, 2022 and 2021 of $ 264 , $ 123 , $ 505 and $ 314 , respectively) ​ ( 9,245 ) ​ ( 9,408 ) ​ ( 28,304 ) ​ ( 29,646 ) ​ Interest income ​ 426 ​ 19 ​ 554 ​ 51 ​ Equity method investment income ​ 2,108 ​ 703 ​ 4,576 ​ 1,106 ​ Other income (expense) ​ 192 ​ ( 84 ) ​ 1,337 ​ ( 2,632 ) ​ INCOME BEFORE INCOME TAXES ​ 171,571 ​ 57,958 ​ 419,360 ​ 126,942 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME TAX EXPENSE ​ 6,600 ​ 234 ​ 55,646 ​ 227 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ​ ​ 164,971 ​ ​ 57,724 ​ ​ 363,714 ​ ​ 126,715 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST ​ ​ ( 364 ) ​ ( 176 ) ​ ( 977 ) ​ ( 384 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ATTRIBUTABLE TO ARLP ​ $ 164,607 ​ $ 57,548 ​ $ 362,737 ​ $ 126,331 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED ​ $ 1.25 ​ $ 0.44 ​ $ 2.76 ​ $ 0.97 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED ​ 127,195,219 ​ 127,195,219 ​ 127,195,219 ​ 127,195,219 ​ ​ See notes to condensed consolidated financial statements . ​ 2 Table of Contents ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ ​ ​ 2022 2021 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ​ $ 164,971 ​ $ 57,724 ​ $ 363,714 ​ $ 126,715 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE INCOME: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit pension plan ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of prior service cost (1) ​ ​ 47 ​ ​ 47 ​ ​ 140 ​ ​ 140 ​ Amortization of net actuarial loss (1) ​ 495 ​ 1,141 ​ 1,467 ​ 3,424 ​ Total defined benefit pension plan adjustments ​ 542 ​ 1,188 ​ 1,607 ​ 3,564 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pneumoconiosis benefits ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of net actuarial loss (1) ​ 260 ​ 1,043 ​ 779 ​ 3,129 ​ Total pneumoconiosis benefits adjustments ​ 260 ​ 1,043 ​ 779 ​ 3,129 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE INCOME ​ 802 ​ 2,231 ​ 2,386 ​ 6,693 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ COMPREHENSIVE INCOME ​ ​ 165,773 ​ ​ 59,955 ​ ​ 366,100 ​ ​ 133,408 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Comprehensive income attributable to noncontrolling interest ​ ​ ( 364 ) ​ ​ ( 176 ) ​ ​ ( 977 ) ​ ​ ( 384 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP ​ $ 165,409 ​ $ 59,779 ​ $ 365,123 ​ $ 133,024 ​ (1) Amortization of prior service cost and net actuarial loss is included in the computation of net periodic benefit cost (see Notes 14 and 16 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, ​ ​ 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM OPERATING ACTIVITIES ​ $ 548,554 ​ $ 310,977 ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment: ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ( 221,286 ) ​ ( 88,661 ) ​ Increase in accounts payable and accrued liabilities ​ 39,500 ​ 2,281 ​ Proceeds from sale of property, plant and equipment ​ 5,006 ​ 6,432 ​ Contributions to equity method investments ​ ( 20,220 ) ​ — ​ Purchase of equity securities ​ ( 32,639 ) ​ — ​ Distributions received from investments in excess of cumulative earnings ​ ​ 387 ​ 1,088 ​ Payment for acquisition of business ​ ( 11,391 ) ​ — ​ Escrow deposit for oil & gas reserve acquisitions ​ ​ ( 4,150 ) ​ ​ ( 1,550 ) ​ Other ​ ( 2,704 ) ​ — ​ Net cash used in investing activities ​ ( 247,497 ) ​ ( 80,410 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ Borrowings under securitization facility ​ ​ 27,500 ​ 35,000 ​ Payments under securitization facility ​ ​ ( 27,500 ) ​ ( 90,900 ) ​ Payments on equipment financings ​ ​ ( 12,360 ) ​ ( 12,888 ) ​ Borrowings under revolving credit facilities ​ — ​ 15,000 ​ Payments under revolving credit facilities ​ — ​ ( 102,500 ) ​ Borrowings from line of credit ​ — ​ 3,230 ​ Payments on finance lease obligations ​ ( 623 ) ​ ( 568 ) ​ Payment of debt issuance costs ​ — ​ ( 113 ) ​ Payments for purchase of units and tax withholdings related to settlements under deferred compensation plans ​ — ​ ( 1,090 ) ​ Distributions paid to Partners ​ ​ ( 130,898 ) ​ ( 26,086 ) ​ Other ​ ( 1,108 ) ​ ( 615 ) ​ Net cash used in financing activities ​ ( 144,989 ) ​ ( 181,530 ) ​ NET CHANGE IN CASH AND CASH EQUIVALENTS ​ 156,068 ​ 49,037 ​ CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ​ 122,403 ​ 55,574 ​ CASH AND CASH EQUIVALENTS AT END OF PERIOD ​ $ 278,471 ​ $ 104,611 ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL CASH FLOW INFORMATION: ​ ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 18,708 ​ $ 20,045 ​ Cash paid for income taxes ​ $ 17,404 ​ $ 11 ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL NON-CASH ACTIVITY: ​ ​ ​ ​ ​ ​ Accounts payable for purchase of property, plant and equipment ​ $ 47,825 ​ $ 8,012 ​ Right-of-use assets acquired by operating lease ​ $ 1,291 ​ $ — ​ Market value of common units issued under deferred compensation plans before tax withholding requirements ​ $ — ​ $ 1,082 ​ ​ 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 "Mr. Craft" mean Joseph W. Craft III, the Chairman, President and Chief Executive Officer of MGP. ● 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 our coal mining operations. ● References to "Alliance Minerals" mean Alliance Minerals, LLC, the holding company for our oil and gas mineral interests. ● References to "Alliance Resource Properties" mean Alliance Resource Properties, LLC, the land holding company for certain of our coal mineral interests, including the subsidiaries of Alliance Resource Properties, LLC. ​ 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. ​ Change in Tax Status ​ On March 15, 2022, Alliance Minerals changed its federal income tax status from a pass-through entity to a taxable entity via a "check the box" election (the "Tax Election"), which became effective January 1, 2022. This election for Alliance Minerals is anticipated to reduce the total income tax burden on our oil & gas royalties, as Alliance Minerals will pay entity-level taxes at corporate tax rates that are well below individual tax rates that would otherwise be paid by our unitholders. For more information on the Tax Election please see Note 8 – Income Taxes. ​ Francis Investment ​ On April 5, 2022, we committed to invest up to $ 50 million in Francis Renewable Energy, LLC ("Francis") through the purchase of preferred equity interests. As of September 30, 2022, we have elected to hold our commitment to Francis at our initial $ 20 million convertible note investment. Francis currently is active in the installation, management and operation of metered-for-fee, public-access electric vehicle ("EV") charging stations. Francis also develops and constructs EV charging stations for third-party customers. Our investment in Francis furthers our business strategy to develop strategic relationships and invest in attractive opportunities in the fast-growing energy infrastructure transition. For more information on this investment please see Note 9 – Variable Interest Entities. ​ 5 Table of Contents Infinitum Investment ​ On April 29, 2022, we purchased $ 32.6 million of Series D Preferred Stock from Infinitum Electric, Inc. ("Infinitum"), a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators which have the potential to result in motors that are smaller, lighter, quieter, more efficient and capable of operating at a fraction of the carbon footprint of conventional electric motors. The preferred stock provides for non-cumulative dividends when and if declared by Infinitum's board of directors. Each share is convertible, at any time, at our option, into shares of common stock of Infinitum. Our investment in Infinitum furthers our business strategy to develop strategic relationships and invest in attractive opportunities in the fast-growing energy infrastructure transition. For more information on this investment please see Note 10 – Investments. ​ On November 2, 2022, we purchased an additional $ 9.4 million of Series D Preferred Stock in Infinitum. ​ NGP ETP IV Investment ​ On June 2, 2022, we committed to purchase $ 25.0 million of limited partner interests in NGP ETP IV, L.P. ("NGP ETP IV"), a private equity fund sponsored by NGP Energy Capital Management, LLC ("NGP"). NGP ETP IV focuses on investments that are part of the global transition toward a lower carbon economy by partnering with top tier management teams and investing growth equity in companies that drive or enable the growth of renewable energy, the electrification of our economy or the efficient use of energy. For more information on this investment please see Note 9 – Variable Interest Entities. ​ Belvedere Acquisition ​ On September 9, 2022, we acquired approximately 394 net oil & gas royalty acres in the Delaware Basin from Belvedere Operating, LLC ("Belvedere") for a purchase price of $ 11.4 million (the "Belvedere Acquisition"). This acquisition enhances our ownership position in the Permian Basin and furthers our business strategy to grow our Oil & Gas Royalties segment. For more information on this acquisition please see Note 3 – Acquisition. ​ 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, 2022 and December 31, 2021, the results of our operations and comprehensive income for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021. 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 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, 2021. ​ 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, 2022. ​ 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. ​ 6 Table of Contents Income Taxes ​ We are not a taxable entity for federal or state income tax purposes; the tax effect of our activities accrues to our unitholders. Although publicly traded partnerships as a general rule are taxed as corporations, we qualify for an exemption because at least 90% of our income consists of qualifying income, as defined in Section 7704(c) of the Internal Revenue Code. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. Individual unitholders have different investment bases depending upon the timing and price of acquisition of their partnership units. Furthermore, each unitholder's tax accounting, which is partially dependent upon the unitholder's tax position, differs from the accounting followed in our consolidated financial statements. Accordingly, the aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each unitholder's tax attributes in our partnership is not available to us. ​ Our subsidiary Alliance Minerals within our Oil & Gas Royalties segment and certain other subsidiaries within our Other, Corporate and Elimination category are subject to federal and state income taxes. We use the liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (ii) operating losses and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax status or a change in tax rates on deferred tax assets and liabilities is recognized in the period the change in status is elected or rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more likely than not the deferred tax assets will not be realized. ​ ​ 2. NEW ACCOUNTING STANDARDS ​ New Accounting Standards Issued and Adopted ​ In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance ("ASU 2021-10"). ASU 2021-10 increases the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. We adopted ASU 2021-10 on January 1, 2022. The adoption of ASU 2021-10 did not have a material impact on our condensed consolidated financial statements. ​ 3. ACQUISITION ​ Belvedere ​ On September 9, 2022 (the "Belvedere Acquisition Date"), our subsidiary, Alliance Royalty, LLC acquired approximately 394 net oil & gas royalty acres in the Delaware Basin from Belvedere for a cash purchase price of $ 11.4 million, which was funded with cash on hand. This acquisition gives us increased exposure to a prolific area of the Delaware Basin and is within close proximity to reserves that we currently own. Because the mineral interests acquired in the Belvedere Acquisition include royalty interests in both developed properties and undeveloped 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 Belvedere Acquisition Date on our condensed consolidated balance sheet. ​ The following table summarizes the fair value allocation of assets acquired as of the Belvedere Acquisition Date: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mineral interests in proved properties ​ $ 7,724 ​ Mineral interests in unproved properties ​ ​ 3,667 ​ ​ ​ $ 11,391 ​ ​ 7 Table of Contents The fair value of the mineral interests was determined using an income approach consisting of 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 risk adjusted discount rates. Certain assumptions used are not observable in active markets; therefore, the fair value measurements represent Level 3 fair value measurements. ​ The amounts of revenue and earnings from the mineral interests acquired in the Belvedere Acquisition included in our condensed consolidated statements of income since the Belvedere Acquisition Date are as follows: ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ September 30, ​ ​ 2022 ​ (in thousands) ​ ​ ​ ​ Revenue $ 112 ​ Net income 78 ​ ​ The following represents our pro forma revenues and net income for the three and nine months ended September 30, 2022 and 2021 as if the mineral interests acquired in the Belvedere Acquisition had been included in our consolidated results since January 1, 2021. These amounts have been calculated after applying our accounting policies. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2022 2021 2022 2021 ​ ​ ​ (in thousands) ​ Total revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As reported ​ $ 628,420 ​ $ 415,439 ​ $ 1,705,784 ​ $ 1,096,504 ​ Pro forma ​ ​ 628,645 ​ ​ 415,943 ​ ​ 1,706,641 ​ ​ 1,097,261 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As reported ​ $ 164,971 ​ $ 57,724 ​ $ 363,714 ​ $ 126,715 ​ Pro forma ​ ​ 165,168 ​ ​ 58,154 ​ ​ 364,472 ​ ​ 127,375 ​ ​ ​ 4. CONTINGENCIES ​ We are party to litigation that has been initiated against certain of our subsidiaries in which the plaintiffs allege violations of the Fair Labor Standards Act and Kentucky Wage and Hour Act due to an alleged failure to compensate for time "donning" and "doffing" equipment and to account for certain bonuses in the calculation of overtime rates and pay. The plaintiffs seek class or collective action certification. Because the litigation of these matters is in the early stages, we cannot reasonably estimate a range of potential exposure at this time. We believe the plaintiffs' claims are without merit and our ultimate exposure, if any, will not be material to our results of operations or financial position and we intend to defend the litigation vigorously. However, if our current belief that the claims are without merit is not upheld, it is reasonably possible that the ultimate resolution of these matters could result in a potential loss that may be material to our results of operations. ​ We also have various other lawsuits, claims and regulatory proceedings incidental to our business that 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. ​ 8 Table of Contents 5. INVENTORIES ​ Inventories consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ ​ 2022 2021 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal ​ $ 48,676 ​ $ 24,845 ​ Supplies (net of reserve for obsolescence of $ 5,914 and $ 5,554 , respectively) ​ 50,089 ​ 35,457 ​ Total inventories, net ​ $ 98,765 ​ $ 60,302 ​ ​ ​ 6. FAIR VALUE MEASUREMENTS ​ The following table summarizes our fair value measurements within the hierarchy not included elsewhere in these notes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2022 ​ December 31, 2021 ​ ​ Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 ​ ​ (in thousands) ​ Long-term debt ​ $ — ​ $ 417,464 ​ $ — ​ $ — ​ $ 457,758 ​ $ — ​ Total ​ $ — ​ $ 417,464 ​ $ — ​ $ — ​ $ 457,758 ​ $ — ​ ​ 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 7 – 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. ​ 7. 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, ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Revolving credit facility ​ $ — ​ $ — ​ $ ( 3,281 ) ​ $ ( 5,019 ) ​ Senior notes ​ 400,000 ​ 400,000 ​ ( 2,362 ) ​ ( 3,048 ) ​ Securitization facility ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ May 2019 equipment financing ​ ​ — ​ ​ 1,503 ​ ​ — ​ ​ — ​ November 2019 equipment financing ​ ​ 23,846 ​ ​ 31,972 ​ ​ — ​ ​ — ​ June 2020 equipment financing ​ ​ 6,874 ​ ​ 9,605 ​ ​ — ​ ​ — ​ ​ ​ 430,720 ​ 443,080 ​ ( 5,643 ) ​ ( 8,067 ) ​ Less current maturities ​ ( 15,133 ) ​ ( 16,071 ) ​ — ​ — ​ Total long-term debt ​ $ 415,587 ​ $ 427,009 ​ $ ( 5,643 ) ​ $ ( 8,067 ) ​ ​ 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 $ 459.5 million revolving credit facility, 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. 9 Table of Contents ​ 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 the assets of the Restricted Subsidiaries. The Credit Agreement is also guaranteed by Alliance Minerals but the oil and gas mineral assets of Alliance Minerals and its direct and indirect subsidiaries (collectively with Alliance Minerals, the "Unrestricted Subsidiaries") are not collateral under the Credit Agreement. 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 5.49 % as of September 30, 2022. On September 30, 2022, we had $ 44.1 million of letters of credit outstanding with $ 415.4 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 0.64 to 1.0, 17.63 to 1.0 and 0.05 to 1.0, respectively, for the trailing twelve months ended September 30, 2022. We remained in compliance with the covenants of the Credit Agreement as of September 30, 2022 and anticipate remaining in compliance with the covenants. ​ 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 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"). In January 2021, we reduced the borrowing availability under the facility to $ 60.0 million. 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 $ 60.0 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 short-term bank yield index. On September 30, 2022, we had $ 9.2 million of letters of credit outstanding with $ 50.8 million available for borrowing under the Securitization Facility. The agreement governing the Securitization Facility contains customary terms and conditions, including limitations with regards to certain customer credit ratings. The Securitization Facility is scheduled to mature in January 2023. On September 30, 2022, we had no 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 contained customary terms and events of default and provided for thirty-six monthly payments with an implicit interest rate of 6.25 % . The May 2019 Equipment Financing matured on May 1, 2022 and the equipment reverted to the Intermediate Partnership. 10 Table of Contents ​ 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 % , providing 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. Upon maturity, the equipment will revert 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 to the Intermediate Partnership. ​ 8. INCOME TAXES ​ Components of income tax expense are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Current: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 5,944 ​ $ 2 ​ $ 17,153 ​ $ 1 ​ State ​ 387 ​ — ​ 1,218 ​ — ​ ​ ​ 6,331 ​ 2 ​ 18,371 ​ 1 ​ Deferred: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ 267 ​ 188 ​ 34,932 ​ 182 ​ State ​ 2 ​ 44 ​ 2,343 ​ 44 ​ ​ ​ 269 ​ 232 ​ 37,275 ​ 226 ​ Income tax expense ​ $ 6,600 ​ $ 234 ​ $ 55,646 ​ $ 227 ​ ​ Alliance Minerals' Tax Election resulted in the recognition of an initial deferred tax liability of $ 37.3 million and a corresponding increase to income tax expense for the nine months ended September 30, 2022. This increase in income tax expense reduced net income by $ 37.3 million, or approximately $ 0.29 per basic and diluted limited partner unit, for the nine months ended September 30, 2022. Recognition of the initial deferred tax liability and expense is primarily the result of the $ 177.0 million non-cash acquisition gain recognized in 2019 related to the acquisition of the remaining interests in AllDale Minerals LP ("AllDale I") and AllDale Minerals II, LP ("AllDale II", and collectively with AllDale I, "AllDale I & II") (the "Acquisition Gain"). The Acquisition Gain was recognized to step up to fair value the financial reporting basis of the interests we already owned at the time of acquisition. The tax basis of the underlying properties of AllDale I & II did not include the Acquisition Gain. ​ 11 Table of Contents Reconciliations of income taxes at the U.S. federal statutory tax rate to income taxes at our effective tax rate are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Income taxes at statutory rate ​ $ 36,030 ​ $ 12,171 ​ $ 88,066 ​ $ 26,658 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Income taxes at statutory rate on Partnership income not subject to income taxes ​ ( 29,888 ) ​ ( 11,777 ) ​ ( 71,562 ) ​ ( 25,935 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase (decrease) resulting from: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ State taxes, net of federal income tax ​ 426 ​ 66 ​ 1,244 ​ 138 ​ Change in valuation allowance of deferred tax assets ​ 9 ​ ( 361 ) ​ 10 ​ ( 666 ) ​ Deferred taxes related to tax election ​ ​ — ​ ​ — ​ ​ 37,253 ​ ​ — ​ Other ​ 23 ​ 135 ​ 635 ​ 32 ​ Income tax expense ​ $ 6,600 ​ $ 234 ​ $ 55,646 ​ $ 227 ​ ​ The effective income tax rate for our income tax expense for the three and nine months ended September 30, 2022 is less than the federal statutory rate, primarily due to the portion of income not subject to income taxes, partially offset by the effect of the Tax Election previously discussed. The effective income tax rate for our income tax expense for the three and nine months ended September 30, 2021 is less than the federal statutory rate, primarily due to the portion of income not subject to income taxes. ​ Significant components of deferred tax liabilities and deferred tax assets are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2022 2021 ​ ​ (in thousands) ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment ​ $ ( 38,770 ) ​ $ ( 2,169 ) ​ Total deferred tax liabilities ​ ​ ( 38,770 ) ​ ​ ( 2,169 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ Federal loss carryovers and credits ​ ​ 734 ​ ​ 1,328 ​ Other ​ 764 ​ 808 ​ Total deferred tax assets ​ ​ 1,498 ​ ​ 2,136 ​ Less valuation allowance ​ ​ ( 327 ) ​ ​ ( 317 ) ​ Net deferred tax assets ​ ​ 1,171 ​ ​ 1,819 ​ ​ ​ ​ ​ ​ ​ ​ ​ Overall net deferred tax liabilities ​ $ ( 37,599 ) ​ $ ( 350 ) ​ ​ The change in deferred tax liabilities for property, plant and equipment is primarily as a result of the Alliance Minerals' Tax Election and associated impact of the Acquisition Gain discussed above. ​ Federal loss carryovers and credits are primarily due to net operating losses and research and development credits associated with the operations of other subsidiaries that are taxable for federal income tax purposes. ​ The valuation allowance as of September 30, 2022 and 2021 serves to reduce the available deferred tax assets to amounts that will, more likely than not, be realized. We considered all available positive and negative evidence, which incorporates available tax planning strategies and our estimate of future reversals of existing temporary differences, and have determined that a portion of our deferred tax assets relating to state losses and credits may not be realized. ​ Our 2019 through 2021 tax years remain open to examination by tax authorities. We have been notified by the Internal Revenue Service that lower-tier partnership income tax returns for the tax year ended December 31, 2020 have been selected for audit. 12 Table of Contents ​ 9. 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 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 ​ ​ 136,597 ​ ​ 5,691 ​ ​ 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 is 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 (i) not having the ability to remove the general partner and (ii) 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 10 – Investments for more information. ​ Francis ​ On April 5, 2022, we committed to invest up to $ 50 million in Francis through the purchase of preferred equity interests. We funded $20 million on April 5, 2022, in the form of a convertible note with a maturity date of April 1, 2023. As of September 30, 2022, we have elected to hold our commitment to Francis at our initial $20 million convertible note investment. Our convertible note represents an ownership interest in Francis upon conversion. We have determined the note more closely represents equity as opposed to debt. Therefore, we will account for the convertible note as an equity contribution even though we will not participate in Francis' earnings or losses and will not be eligible to receive distributions until the note converts. ​ We have concluded that Francis is a VIE as the management structure is similar to a limited partnership with the non-managing members (i) not having the ability to remove the managing member and (ii) not participating significantly 13 Table of Contents in the operational decisions. We are not the primary beneficiary of Francis as we do not have the power to direct the activities that most significantly impact Francis's economic performance. We account for our ownership interest in the income or loss of Francis as an equity method investment. We record equity income or loss based on Francis' distribution structure. See Note 10 – Investments for more information. ​ NGP ETP IV ​ On June 2, 2022, we committed to purchase $ 25.0 million of limited partner interests in NGP ETP IV, a private equity fund sponsored by NGP and focused on investments that are part of the global transition toward a lower carbon economy. We funded $ 0.2 million during the nine months ended September 30, 2022. Our final ownership percentage in NGP ETP IV is not yet known. ​ We have concluded that NGP ETP IV is a VIE as it is structured as a limited partnership with limited partners (i) not having the ability to remove the general partner and (ii) not participating significantly in the operational decisions. We are not the primary beneficiary of NGP ETP IV as we do not have the power to direct the activities that most significantly impact NGP ETP IV's economic performance. We account for our ownership interest in the income or loss of NGP ETP IV as an equity method investment. See Note 10 – Investments for more information. ​ 10. INVESTMENT S ​ AllDale III ​ As discussed in Note 9 – Variable Interest Entities, we account for our ownership interest in the income or loss of AllDale III as an equity method investment. 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, ​ ​ 2022 2021 2022 2021 ​ ​ ​ (in thousands) ​ Beginning balance ​ $ 26,278 ​ $ 26,274 ​ $ 26,325 ​ $ 27,268 ​ Equity method investment income ​ ​ 2,108 ​ ​ 703 ​ ​ 4,576 ​ ​ 1,106 ​ Distributions received ​ ​ ( 2,448 ) ​ ​ ( 797 ) ​ ​ ( 4,963 ) ​ ​ ( 2,194 ) ​ Ending balance ​ $ 25,938 ​ $ 26,180 ​ $ 25,938 ​ $ 26,180 ​ ​ Francis ​ As discussed in Note 9 – Variable Interest Entities, we accounted for our ownership interest in the income or loss of Francis as an equity method investment. The changes in our equity method investment in Francis for the three and nine months ended September 30, 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2022 2022 ​ ​ (in thousands) ​ Beginning balance ​ $ 20,000 ​ $ — ​ Contributions ​ ​ — ​ ​ 20,000 ​ Ending balance ​ $ 20,000 ​ $ 20,000 ​ ​ 14 Table of Contents NGP ETP IV ​ As discussed in Note 9 – Variable Interest Entities, we account for our ownership interest in the income or loss of NGP ETP IV as an equity method investment. The changes in our equity method investment in NGP ETP IV for three and nine months ended September 30, 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2022 2022 ​ ​ ​ (in thousands) ​ Beginning balance ​ $ 110 ​ $ — ​ Contributions ​ ​ 110 ​ ​ 220 ​ Ending balance ​ $ 220 ​ $ 220 ​ ​ Infinitum ​ On April 29, 2022, we purchased $ 32.6 million of Series D Preferred Stock from Infinitum, a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators. The preferred stock provides for non-cumulative dividends when and if declared by Infinitum's board of directors. Each share is convertible, at any time, at our option, into shares of common stock of Infinitum. We account for our ownership interest in Infinitum as an equity investment without a readily determinable fair value. It is not practicable to estimate the fair value of our investment in Infinitum because of the lack of a quoted market price for our ownership interests. Therefore, we use a measurement alternative other than fair value to account for our investment. There have been no fair value adjustments in our investment in Infinitum subsequent to our purchase. During the period we have not observed any price changes that have occurred to identical or similar securities sold by Infinitum that would indicate an adjustment to the fair value of our investment is warranted. ​ As discussed in Note 1 – Organization and Presentation, on November 2, 2022, we purchased an additional $ 9.4 million of Series D Preferred Stock in Infinitum. The stock was purchased at the same price per share as those shares of Series D Preferred Stock that we acquired on April 29, 2022. ​ 11. PARTNERS' CAPITAL ​ Distributions ​ Distributions paid or declared during 2021 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Date Per Unit Cash Distribution Total Cash Distribution ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ May 14, 2021 ​ $ 0.1000 ​ $ 13,045 ​ August 13, 2021 ​ ​ 0.1000 ​ ​ 13,041 ​ November 12, 2021 ​ ​ 0.2000 ​ ​ 26,072 ​ Total ​ $ 0.4000 ​ $ 52,158 ​ ​ ​ ​ ​ ​ ​ ​ ​ February 14, 2022 ​ $ 0.2500 ​ $ 32,750 ​ May 13, 2022 ​ ​ 0.3500 ​ ​ 45,810 ​ August 12, 2022 ​ ​ 0.4000 ​ ​ 52,338 ​ November 14, 2022 (1) ​ ​ 0.5000 ​ ​ — ​ Total ​ $ 1.5000 ​ $ 130,898 ​ (1) On October 28, 2022, we declared this quarterly distribution payable on November 14, 2022 to all unitholders of record as of November 7, 2022. ​ 15 Table of Contents 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, 2022. 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. The remaining authorized amount for unit repurchases under this program is $ 6.5 million. ​ Change in Partners' Capital ​ The following tables present the quarterly change in Partners' Capital for the nine months ended September 30, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2022 127,195,219 ​ $ 1,279,183 ​ $ ( 64,229 ) ​ $ 11,115 ​ $ 1,226,069 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 36,652 ​ — ​ ​ 290 36,942 ​ Actuarially determined long-term liability adjustments — ​ — ​ 790 ​ — 790 ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 37,732 ​ Common unit-based compensation — ​ 2,640 ​ ​ — ​ ​ — ​ ​ 2,640 ​ Distributions on deferred common unit-based compensation — ​ ( 950 ) ​ ​ — ​ ​ — ​ ​ ( 950 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 298 ) ​ ​ ( 298 ) ​ Distributions to Partners — ​ ​ ( 31,800 ) ​ ​ — ​ ​ — ​ ​ ( 31,800 ) ​ Balance at March 31, 2022 ​ 127,195,219 ​ ​ 1,285,725 ​ ​ ( 63,439 ) ​ ​ 11,107 ​ ​ 1,233,393 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 161,478 ​ — ​ ​ 323 161,801 ​ Actuarially determined long-term liability adjustments — ​ — ​ 794 ​ — 794 ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 162,595 ​ Common unit-based compensation — ​ 2,340 ​ ​ — ​ ​ — ​ ​ 2,340 ​ Distributions on deferred common unit-based compensation — ​ ( 1,292 ) ​ ​ — ​ ​ — ​ ​ ( 1,292 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 325 ) ​ ​ ( 325 ) ​ Distributions to Partners — ​ ​ ( 44,518 ) ​ ​ — ​ ​ — ​ ​ ( 44,518 ) ​ Balance at June 30, 2022 ​ 127,195,219 ​ $ 1,403,733 ​ $ ( 62,645 ) ​ $ 11,105 ​ $ 1,352,193 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 164,607 ​ — ​ ​ 364 164,971 ​ Actuarially determined long-term liability adjustments — ​ — ​ 802 ​ — 802 ​ Total comprehensive income — ​ ​ — ​ ​ — ​ ​ — ​ 165,773 ​ Common unit-based compensation — ​ 2,677 ​ ​ — ​ ​ — ​ ​ 2,677 ​ Distributions on deferred common unit-based compensation — ​ ( 1,461 ) ​ ​ — ​ ​ — ​ ​ ( 1,461 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 485 ) ​ ​ ( 485 ) ​ Distributions to Partners — ​ ​ ( 50,877 ) ​ ​ — ​ ​ — ​ ​ ( 50,877 ) ​ Balance at September 30, 2022 127,195,219 ​ $ 1,518,679 ​ $ ( 61,843 ) ​ $ 10,984 ​ $ 1,467,820 ​ ​ 16 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2021 127,195,219 ​ $ 1,148,565 ​ $ ( 87,674 ) ​ $ 11,376 ​ $ 1,072,267 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 24,748 ​ — ​ ​ 78 24,826 ​ Actuarially determined long-term liability adjustments — ​ — ​ 2,231 ​ — 2,231 ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 27,057 ​ Common unit-based compensation — ​ 723 ​ ​ — ​ ​ — ​ ​ 723 ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 141 ) ​ ​ ( 141 ) ​ Balance at March 31, 2021 127,195,219 ​ ​ 1,174,036 ​ ​ ( 85,443 ) ​ ​ 11,313 ​ ​ 1,099,906 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 44,035 ​ — ​ ​ 130 44,165 ​ Actuarially determined long-term liability adjustments — ​ — ​ 2,231 ​ — 2,231 ​ Total comprehensive loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 46,396 ​ Common unit-based compensation — ​ 1,485 ​ ​ — ​ ​ — ​ ​ 1,485 ​ Distributions on deferred common unit-based compensation — ​ ( 324 ) ​ ​ — ​ ​ — ​ ​ ( 324 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 222 ) ​ ​ ( 222 ) ​ Distributions to Partners — ​ ​ ( 12,721 ) ​ ​ — ​ ​ — ​ ​ ( 12,721 ) ​ Balance at June 30, 2021 127,195,219 ​ ​ 1,206,511 ​ ​ ( 83,212 ) ​ ​ 11,221 ​ ​ 1,134,520 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 57,548 ​ — ​ ​ 176 57,724 ​ Actuarially determined long-term liability adjustments — ​ — ​ 2,231 ​ — 2,231 ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 59,955 ​ Settlement of deferred compensation plans ​ ​ ​ ​ ( 1,090 ) ​ ​ — ​ ​ — ​ ​ ( 1,090 ) ​ Common unit-based compensation — ​ 1,746 ​ ​ — ​ ​ — ​ ​ 1,746 ​ Distributions on deferred common unit-based compensation — ​ ( 323 ) ​ ​ — ​ ​ — ​ ​ ( 323 ) ​ Distributions from consolidated company to noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ ( 252 ) ​ ​ ( 252 ) ​ Distributions to Partners — ​ ​ ( 12,718 ) ​ ​ — ​ ​ — ​ ​ ( 12,718 ) ​ Balance at September 30, 2021 127,195,219 ​ $ 1,251,674 ​ $ ( 80,981 ) ​ $ 11,145 ​ $ 1,181,838 ​ ​ ​ 17 Table of Contents ​ 12. 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 17 – Segment Information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal Operations ​ Royalties ​ Other, ​ ​ ​ ​ ​ ​ Illinois ​ ​ ​ ​ Corporate and ​ ​ ​ ​ Basin Appalachia Oil & Gas Coal Elimination Consolidated ​ ​ ​ (in thousands) ​ Three Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 314,271 ​ $ 236,292 ​ $ — ​ $ — ​ $ — ​ $ 550,563 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 35,312 ​ ​ — ​ ​ — ​ ​ 35,312 ​ Coal royalties ​ ​ — ​ ​ — ​ ​ — ​ ​ 16,708 ​ ​ ( 16,708 ) ​ ​ — ​ Transportation revenues ​ ​ 19,508 ​ ​ 9,040 ​ ​ — ​ ​ — ​ ​ — ​ ​ 28,548 ​ Other revenues ​ ​ 1,455 ​ ​ 392 ​ ​ 2,260 ​ ​ — ​ ​ 9,890 ​ ​ 13,997 ​ Total revenues ​ $ 335,234 ​ $ 245,724 ​ $ 37,572 ​ $ 16,708 ​ $ ( 6,818 ) ​ $ 628,420 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 217,637 ​ $ 144,627 ​ $ — ​ $ — ​ $ — ​ $ 362,264 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 20,109 ​ ​ — ​ ​ — ​ ​ 20,109 ​ Coal royalties ​ ​ — ​ ​ — ​ ​ — ​ ​ 13,456 ​ ​ ( 13,456 ) ​ ​ — ​ Transportation revenues ​ ​ 12,121 ​ ​ 9,906 ​ ​ — ​ ​ — ​ ​ — ​ ​ 22,027 ​ Other revenues ​ ​ 1,335 ​ ​ 411 ​ ​ 1,082 ​ ​ — ​ ​ 8,211 ​ ​ 11,039 ​ Total revenues ​ $ 231,093 ​ $ 154,944 ​ $ 21,191 ​ $ 13,456 ​ $ ( 5,245 ) ​ $ 415,439 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 858,565 ​ $ 612,165 ​ $ — ​ $ — ​ $ — ​ $ 1,470,730 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 102,166 ​ ​ — ​ ​ — ​ ​ 102,166 ​ Coal royalties ​ ​ — ​ ​ — ​ ​ — ​ ​ 46,400 ​ ​ ( 46,400 ) ​ ​ — ​ Transportation revenues ​ ​ 59,848 ​ ​ 33,457 ​ ​ — ​ ​ — ​ ​ — ​ ​ 93,305 ​ Other revenues ​ ​ 5,014 ​ ​ 1,083 ​ ​ 2,946 ​ ​ — ​ ​ 30,540 ​ ​ 39,583 ​ Total revenues ​ $ 923,427 ​ $ 646,705 ​ $ 105,112 ​ $ 46,400 ​ $ ( 15,860 ) ​ $ 1,705,784 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 610,435 ​ $ 365,290 ​ $ — ​ $ — ​ $ — ​ $ 975,725 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 51,222 ​ ​ — ​ ​ — ​ ​ 51,222 ​ Coal royalties ​ ​ — ​ ​ — ​ ​ — ​ ​ 36,410 ​ ​ ( 36,410 ) ​ ​ — ​ Transportation revenues ​ ​ 27,235 ​ ​ 17,918 ​ ​ — ​ ​ — ​ ​ — ​ ​ 45,153 ​ Other revenues ​ ​ 2,590 ​ ​ 1,078 ​ ​ 1,576 ​ ​ — ​ ​ 19,160 ​ ​ 24,404 ​ Total revenues ​ $ 640,260 ​ $ 384,286 ​ $ 52,798 ​ $ 36,410 ​ $ ( 17,250 ) ​ $ 1,096,504 ​ ​ 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, 2022 and disaggregated by segment and contract duration. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 and ​ ​ ​ 2022 2023 2024 Thereafter Total ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Illinois Basin Coal Operations coal revenues ​ $ 380,626 ​ $ 853,006 ​ $ 489,615 ​ $ 480,298 ​ $ 2,203,545 Appalachia Coal Operations coal revenues ​ ​ 298,080 ​ ​ 372,353 ​ ​ 310,436 ​ ​ 156,700 ​ ​ 1,137,569 Total coal revenues (1) ​ $ 678,706 ​ $ 1,225,359 ​ $ 800,051 ​ $ 636,998 ​ $ 3,341,114 (1) Coal revenues generally consists of consolidated revenues excluding our Oil & Gas Royalties segment as well as intercompany revenues from our Coal Royalties segment . 18 Table of Contents ​ 13 . 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 restricted unit 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 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, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands, except per unit data) ​ Net income attributable to ARLP ​ $ 164,607 ​ $ 57,548 ​ $ 362,737 ​ $ 126,331 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributions to participating securities ​ ( 2,180 ) ​ ( 765 ) ​ ( 5,452 ) ​ ( 1,384 ) ​ Undistributed earnings attributable to participating securities ​ ( 3,275 ) ​ ( 951 ) ​ ( 6,504 ) ​ ( 1,832 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to ARLP available to limited partners ​ $ 159,152 ​ $ 55,832 ​ $ 350,781 ​ $ 123,115 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average limited partner units outstanding – basic and diluted ​ 127,195 ​ 127,195 ​ 127,195 ​ 127,195 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per limited partner unit - basic and diluted (1) ​ $ 1.25 ​ $ 0.44 ​ $ 2.76 ​ $ 0.97 ​ (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 3,754 and 3,431 for the three and nine months ended September 30, 2022, respectively, and 2,328 and 1,706 for the three and nine months ended September 30, 2021 , respectively, were considered anti-dilutive under the treasury stock method . ​ ​ 19 Table of Contents 14. 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, ​ ​ ​ 2022 2021 2022 2021 ​ ​ ​ (in thousands) ​ Beginning balance ​ $ 47,221 ​ $ 52,059 ​ $ 53,448 ​ $ 54,739 ​ Accruals increase ​ 2,918 ​ 1,674 ​ 7,464 ​ 4,911 ​ Payments ​ ( 2,856 ) ​ ( 2,939 ) ​ ( 8,938 ) ​ ( 7,914 ) ​ Interest accretion ​ 287 ​ 232 ​ 861 ​ 695 ​ Valuation gain (1) ​ — ​ — ​ ( 5,265 ) ​ ( 1,405 ) ​ Ending balance ​ $ 47,570 ​ $ 51,026 ​ $ 47,570 ​ $ 51,026 ​ (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. The valuation gain in 2022 is due to an increase in the discount rate from 2.41 % on December 31, 2021 to 4.22 % on June 30, 202 2 . The valuation gain in 2021 is due to an increase in the discount rate from 1.95 % on December 31, 2020 to 2.34 % on June 30, 202 1 . ​ 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, 2022 are $ 5.7 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, ​ ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Service cost ​ $ 949 ​ $ 1,007 ​ $ 2,850 ​ $ 3,027 Interest cost (1) ​ 747 ​ 636 ​ 2,243 ​ 1,909 ​ Net amortization (1) ​ 260 ​ 1,043 ​ 779 ​ 3,129 ​ Net periodic benefit cost ​ $ 1,956 ​ $ 2,686 ​ $ 5,872 ​ $ 8,065 ​ (1) Interest cost and net amortization are included in the Other income (expense) line item within our condensed consolidated statements of income. ​ ​ 15. COMMON UNIT-BASED 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. As part of our LTIP, unit awards of non-vested "phantom" or notional units, also referred to as "restricted units", may be granted which upon satisfaction of time and performance-based vesting requirements, entitle the LTIP participant to receive ARLP common units. Certain awards may also contain a minimum-value guarantee payable in ARLP common units or cash that would be paid regardless of whether or not the awards vest, as long as service requirements are met. Annual grant levels, vesting provisions and minimum-value guarantees of restricted units for designated participants are recommended by Mr. Craft, subject to review and approval of the compensation committee of the MGP board of directors 20 Table of Contents (the "Compensation Committee"). Vesting of all restricted units outstanding is subject to the satisfaction of certain financial tests. If it is not probable the financial tests for a particular grant of restricted units will be met, any previously expensed amounts for that grant are reversed and no future expense will be recognized for that grant. Assuming the financial tests are met, grants of restricted units issued to LTIP participants are generally expected to cliff vest on January 1st of the third year following issuance of the grants. We expect to settle restricted unit grants by delivery of newly-issued 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 restricted unit grants as they occur. As provided under the distribution equivalent rights ("DERs") provisions of the LTIP and the terms of the LTIP restricted unit awards, all non-vested restricted units 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. If it is not probable the financial tests for a particular grant of restricted units will be met, any previously paid DER amounts for that grant are reversed from Partners' Capital and recorded as compensation expense and future DERs for that grant, if any, will be recognized as compensation expense when paid. ​ A summary of non-vested LTIP grants as of and for the nine months ended September 30, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of units Weighted average grant date fair value per unit Intrinsic value ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-vested grants at January 1, 2022 ​ 3,130,475 ​ $ 5.59 ​ $ 39,569 ​ Granted (1) 769,907 ​ ​ 14.65 ​ ​ ​ ​ Forfeited ( 200,119 ) ​ 6.96 ​ ​ ​ ​ Non-vested grants at September 30, 2022 3,700,263 ​ 7.40 ​ ​ 84,736 ​ (1) The restricted units granted during 2022 have certain minimum-value guarantees per unit, regardless of whether or not the awards vest. ​ LTIP expense for grants of restricted units was $ 2.4 million and $ 1.7 million for the three months ended September 30, 2022 and 2021, respectively, and $ 6.8 million and $ 3.8 million for the nine months ended September 30, 2022 and 2021, respectively. The total obligation associated with LTIP grants of restricted units as of September 30, 2022 was $ 13.4 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. As of September 30, 2022, there was $ 14.0 million in total unrecognized compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest. That expense is expected to be recognized over a weighted-average period of 1.1 years. ​ 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. ​ 21 Table of Contents A summary of SERP and Directors' Deferred Compensation Plan activity as of and for the nine months ended September 30, 2022 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, 2022 ​ 668,698 ​ $ 20.37 ​ $ 8,452 ​ Granted ​ 37,758 ​ ​ 18.25 ​ ​ ​ ​ Phantom units outstanding as of September 30, 2022 706,456 ​ 20.26 ​ ​ 16,178 ​ ​ Total SERP and Directors' Deferred Compensation Plan expense was $ 0.4 million and $ 0.1 million for the three months ended September 30, 2022 and 2021, respectively, and $ 0.9 million and $ 0.3 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 14.3 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. ​ 16. 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, ​ ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Interest cost ​ $ 940 ​ $ 860 ​ $ 2,808 ​ $ 2,580 ​ Expected return on plan assets ​ ( 1,654 ) ​ ( 1,671 ) ​ ( 4,983 ) ​ ( 5,013 ) ​ Amortization of prior service cost ​ ​ 47 ​ ​ 47 ​ ​ 140 ​ ​ 140 ​ Amortization of net loss ​ 495 ​ 1,141 ​ 1,467 ​ 3,424 ​ Net periodic benefit cost (1) ​ $ ( 172 ) ​ $ 377 ​ $ ( 568 ) ​ $ 1,131 ​ (1) Net periodic benefit cost for the Pension Plan is included in the Other income (expense) line item within our condensed consolidated statements of income. ​ As a result of certain pension plan contribution relief provided by the American Rescue Plan Act enacted in March 2021, we do not expect to make contributions to the Pension Plan during 2022. ​ 17. SEGMENT INFORMATION ​ We operate in the United States as a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic and international utilities and industrial users as well as royalty income from oil & gas mineral interests. We aggregate multiple operating segments into four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties. We also have an "all other" category referred to as Other, Corporate and Elimination. Our two coal operations 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 operations reportable segments include seven mining complexes operating in Illinois, Indiana, Kentucky, Maryland, Pennsylvania and West Virginia and a coal-loading terminal in Indiana on the Ohio River. Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests which are located primarily in the Permian (Delaware and Midland), Anadarko (SCOOP/STACK) and Williston (Bakken) basins. The operations within our Oil & Gas Royalties reportable segment primarily include receiving royalties and lease bonuses for our oil & gas mineral interests. Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties, which are either (a) leased to our mining complexes or (b) near our coal mining operations but not yet leased. 22 Table of Contents ​ The Illinois Basin Coal Operations reportable segment includes operating mining complexes (a) the Gibson County Coal, LLC mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC mining complex and (d) the Hamilton County Coal, LLC mining complex. The segment also includes our Mt. Vernon Transfer Terminal, LLC coal-loading terminal in Indiana which operates on the Ohio River, Mid-America Carbonates, LLC and other support services, and our non-operating Illinois Basin mining complexes. ​ The Appalachia Coal Operations reportable segment includes operating mining complexes (a) the Mettiki mining complex, (b) the Tunnel Ridge, LLC mining complex and (c) the MC Mining, LLC mining complex. ​ The Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by AR Midland, LP ("AR Midland") and AllDale I & II and includes Alliance Minerals' equity interests in both AllDale III (Note 10 – Investments) and Cavalier Minerals. ​ The Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties that are (a) leased to certain of our mining complexes in both the Illinois Basin Coal Operations and Appalachia Coal Operations reportable segments or (b) located near our operations and external mining operations. Approximately two thirds of the coal sold by our Coal Operations' mines is leased from our Coal Royalties entities. ​ Other, Corporate and Elimination includes marketing and administrative activities, Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC (collectively referred to as the "Matrix Group"), our investments in Francis, Infinitum and NGP ETP IV (see Note 10 – Investments), Wildcat Insurance, LLC, which assists the ARLP Partnership with its insurance requirements, AROP Funding and Alliance Finance (both discussed in Note 7 – Long-Term Debt), Pontiki Coal, LLC's workers' compensation and pneumoconiosis liabilities and other miscellaneous activities. The eliminations included in Other, Corporate and Elimination primarily represent the intercompany coal royalty transactions described above between our Coal Royalties reportable segment and our coal operations' mines. ​ 23 Table of Contents Reportable segment results are presented below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal Operations ​ Royalties ​ Other, ​ ​ ​ ​ ​ Illinois ​ ​ ​ ​ ​ Corporate and ​ ​ ​ ​ Basin Appalachia Oil & Gas Coal ​ Elimination Consolidated ​ ​ (in thousands) Three Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 335,234 ​ $ 245,724 ​ $ 37,572 ​ $ — ​ $ 9,890 ​ $ 628,420 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 16,708 ​ ​ ( 16,708 ) ​ ​ — ​ Total revenues (1) ​ ​ 335,234 ​ ​ 245,724 ​ ​ 37,572 ​ ​ 16,708 ​ ​ ( 6,818 ) ​ ​ 628,420 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (2) ​ 194,967 ​ 134,672 ​ 3,531 ​ 5,545 ​ ( 8,609 ) ​ 330,106 ​ Segment Adjusted EBITDA (3) ​ 120,760 ​ 102,012 ​ 35,783 ​ 11,163 ​ 1,792 ​ 271,510 ​ Capital expenditures ​ 39,529 ​ 17,780 ​ — ​ 40,033 ​ 1,962 ​ 99,304 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 231,093 ​ $ 154,944 ​ $ 21,191 ​ $ — ​ $ 8,211 ​ $ 415,439 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 13,456 ​ ​ ( 13,456 ) ​ ​ — ​ Total revenues (1) ​ ​ 231,093 ​ ​ 154,944 ​ ​ 21,191 ​ ​ 13,456 ​ ​ ( 5,245 ) ​ ​ 415,439 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (2) ​ 149,666 ​ 92,312 ​ 2,639 ​ 4,258 ​ ( 9,525 ) ​ 239,350 ​ Segment Adjusted EBITDA (3) ​ 69,305 ​ 52,726 ​ 19,080 ​ 9,198 ​ 4,280 ​ 154,589 ​ Capital expenditures ​ 19,081 ​ 12,531 ​ — ​ 30 ​ 1,393 ​ 33,035 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 923,427 ​ $ 646,705 ​ $ 105,112 ​ $ — ​ $ 30,540 ​ $ 1,705,784 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 46,400 ​ ​ ( 46,400 ) ​ ​ — ​ Total revenues (1) ​ ​ 923,427 ​ ​ 646,705 ​ ​ 105,112 ​ ​ 46,400 ​ ​ ( 15,860 ) ​ ​ 1,705,784 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (2) ​ 567,253 ​ ​ 335,756 ​ ​ 9,766 ​ ​ 15,762 ​ ​ ( 21,177 ) ​ 907,360 ​ Segment Adjusted EBITDA (3) ​ 296,327 ​ ​ 277,492 ​ ​ 98,944 ​ ​ 30,638 ​ ​ 5,317 ​ 708,718 ​ Total assets ​ 731,441 ​ ​ 428,000 ​ ​ 689,874 ​ ​ 325,498 ​ ​ 329,569 ​ 2,504,381 ​ Capital expenditures ​ 111,419 ​ ​ 58,616 ​ ​ — ​ ​ 40,033 ​ ​ 11,218 ​ 221,286 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 640,260 ​ $ 384,286 ​ $ 52,798 ​ $ — ​ $ 19,160 ​ $ 1,096,504 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 36,410 ​ ​ ( 36,410 ) ​ ​ — ​ Total revenues (1) ​ ​ 640,260 ​ ​ 384,286 ​ ​ 52,798 ​ ​ 36,410 ​ ​ ( 17,250 ) ​ ​ 1,096,504 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (2) ​ 415,423 ​ ​ 240,494 ​ ​ 7,116 ​ ​ 13,157 ​ ​ ( 24,619 ) ​ 651,571 ​ Segment Adjusted EBITDA (3) ​ 197,601 ​ ​ 125,873 ​ ​ 46,405 ​ ​ 23,253 ​ ​ 7,370 ​ 400,502 ​ Total assets ​ 703,060 ​ ​ 422,504 ​ ​ 601,695 ​ ​ 289,100 ​ ​ 132,616 ​ 2,148,975 ​ Capital expenditures ​ 47,997 ​ ​ 34,579 ​ ​ — ​ ​ 30 ​ ​ 6,055 ​ 88,661 ​ (1) Revenues included in the Other, Corporate and Elimination column are attributable to intercompany eliminations, which are primarily intercompany coal royalty eliminations, outside revenues at the Matrix Group and other outside miscellaneous sales and revenue activities. ​ (2) 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. ​ ​ 24 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, ​ ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Segment Adjusted EBITDA Expense ​ $ 330,106 ​ $ 239,350 ​ $ 907,360 ​ $ 651,571 ​ Outside coal purchases ​ — ​ ( 6,065 ) ​ ( 151 ) ​ ( 6,179 ) ​ Other income (expense) ​ 192 ​ ( 84 ) ​ 1,337 ​ ( 2,632 ) ​ Operating expenses (excluding depreciation, depletion and amortization) ​ $ 330,298 ​ $ 233,201 ​ $ 908,546 ​ $ 642,760 ​ ​ (3) Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization, and general and administrative expenses. 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, ​ ​ ​ 2022 2021 2022 2021 ​ ​ (in thousands) ​ Consolidated Segment Adjusted EBITDA ​ $ 271,510 ​ $ 154,589 ​ $ 708,718 ​ $ 400,502 ​ General and administrative ​ ( 21,341 ) ​ ( 18,655 ) ​ ( 62,394 ) ​ ( 51,651 ) ​ Depreciation, depletion and amortization ​ ( 70,143 ) ​ ( 68,763 ) ​ ( 200,191 ) ​ ( 192,698 ) ​ Interest expense, net ​ ( 8,819 ) ​ ( 9,389 ) ​ ( 27,750 ) ​ ( 29,595 ) ​ Income tax expense ​ ( 6,600 ) ​ ( 234 ) ​ ( 55,646 ) ​ ( 227 ) ​ Net income attributable to ARLP ​ $ 164,607 ​ $ 57,548 ​ $ 362,737 ​ $ 126,331 ​ Noncontrolling interest ​ ​ 364 ​ ​ 176 ​ ​ 977 ​ ​ 384 ​ Net income ​ $ 164,971 ​ $ 57,724 ​ $ 363,714 ​ $ 126,715 ​ ​ ​ ​ ​ ​ ​ ​ 18. SUBSEQUENT EVENTS ​ Jase Acquisition ​ On October 26, 2022, we acquired approximately 3,928 oil & gas net royalty acres in the Midland and Delaware Basins from Jase Minerals, LP for a purchase price of $ 81.2 million which was funded with cash on hand. Because the acquisition includes both developed and undeveloped properties we will account for the acquisition as a business combination. This acquisition enhanced our ownership position in the Permian Basin. ​ ​ ​ ​ ​ ​ 25 Table of Contents ​