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) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ 2023 2022* ​ ASSETS ​ ​ ​ ​ ​ CURRENT ASSETS: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 271,250 ​ $ 296,023 ​ Trade receivables ​ 266,334 ​ 241,412 ​ Other receivables ​ 9,892 ​ 8,601 ​ Inventories, net ​ 108,648 ​ 77,326 ​ Advance royalties ​ 5,824 ​ 7,556 ​ Prepaid expenses and other assets 19,330 26,675 ​ Total current assets ​ 681,278 ​ 657,593 ​ PROPERTY, PLANT AND EQUIPMENT: ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, at cost ​ 4,018,071 ​ 3,931,422 ​ Less accumulated depreciation, depletion and amortization ​ ( 2,108,819 ) ​ ( 2,050,754 ) ​ Total property, plant and equipment, net ​ 1,909,252 ​ 1,880,668 ​ OTHER ASSETS: ​ ​ ​ ​ ​ ​ ​ Advance royalties ​ 75,331 ​ 67,713 ​ Equity method investments ​ 48,949 ​ 49,371 ​ Equity securities ​ ​ 42,000 ​ 42,000 ​ Operating lease right-of-use assets ​ ​ 15,944 ​ ​ 14,950 ​ Other long-term assets ​ 14,995 ​ 15,726 ​ Total other assets ​ 197,219 ​ 189,760 ​ TOTAL ASSETS ​ $ 2,787,749 ​ $ 2,728,021 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND PARTNERS' CAPITAL ​ ​ ​ ​ ​ ​ ​ CURRENT LIABILITIES: ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 115,106 ​ $ 95,122 ​ Accrued taxes other than income taxes ​ 23,554 ​ 22,967 ​ Accrued payroll and related expenses ​ 33,772 ​ 39,623 ​ Accrued interest ​ 13,002 ​ 5,000 ​ Workers' compensation and pneumoconiosis benefits ​ 14,098 ​ 14,099 ​ Other current liabilities ​ 51,706 ​ 53,790 ​ Current maturities, long-term debt, net ​ 40,554 ​ 24,970 ​ Total current liabilities ​ 291,792 ​ 255,571 ​ LONG-TERM LIABILITIES: ​ ​ ​ ​ ​ ​ ​ Long-term debt, excluding current maturities, net ​ 418,329 ​ 397,203 ​ Pneumoconiosis benefits ​ 100,825 ​ 100,089 ​ Accrued pension benefit ​ 12,250 ​ 12,553 ​ Workers' compensation ​ 40,117 ​ 39,551 ​ Asset retirement obligations ​ 143,010 ​ 142,254 ​ Long-term operating lease obligations ​ 13,424 ​ 12,132 ​ Deferred income tax liabilities ​ 35,583 ​ 35,814 ​ Other liabilities ​ 25,258 ​ 24,828 ​ Total long-term liabilities ​ 788,796 ​ 764,424 ​ Total liabilities ​ 1,080,588 ​ 1,019,995 ​ ​ ​ ​ ​ ​ ​ ​ ​ COMMITMENTS AND CONTINGENCIES - (NOTE 3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PARTNERS' CAPITAL: ​ ​ ​ ​ ​ ​ ​ ARLP Partners' Capital: ​ ​ ​ ​ ​ ​ ​ Limited Partners - Common Unitholders 127,195,219 units outstanding ​ 1,721,938 ​ 1,656,025 ​ General Partner's interest ​ — ​ 66,548 ​ Accumulated other comprehensive loss ​ ( 40,489 ) ​ ( 41,054 ) ​ Total ARLP Partners' Capital ​ 1,681,449 ​ 1,681,519 ​ Noncontrolling interest ​ ​ 25,712 ​ ​ 26,507 ​ Total Partners' Capital ​ ​ 1,707,161 ​ ​ 1,708,026 ​ TOTAL LIABILITIES AND PARTNERS' CAPITAL ​ $ 2,787,749 ​ $ 2,728,021 ​ ​ *Recast as discussed in Note 1 – Organization and Presentation. 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 ​ ​ ​ March 31, ​ ​ 2023 2022* SALES AND OPERATING REVENUES: ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 578,784 ​ $ 388,360 ​ Oil & gas royalties ​ ​ 34,497 ​ ​ 33,396 ​ Transportation revenues ​ 30,238 ​ 29,372 ​ Other revenues ​ 19,403 ​ 12,294 ​ Total revenues ​ 662,922 ​ 463,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ EXPENSES: ​ ​ ​ ​ ​ ​ ​ Operating expenses (excluding depreciation, depletion and amortization) ​ 338,723 ​ 262,023 ​ Transportation expenses ​ 30,238 ​ 29,372 ​ General and administrative ​ 21,085 ​ 18,622 ​ Depreciation, depletion and amortization ​ 65,550 ​ 64,140 ​ Total operating expenses ​ 455,596 ​ 374,157 ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME FROM OPERATIONS ​ 207,326 ​ 89,265 ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense (net of interest capitalized for the three months ended March 31, 2023 and 2022 of $ 1,407 and $ 70 , respectively) ​ ( 12,676 ) ​ ( 9,662 ) ​ Interest income ​ 2,790 ​ 35 ​ Equity method investment income ​ 52 ​ 883 ​ Other income (expense) ​ ( 573 ) ​ 567 ​ INCOME BEFORE INCOME TAXES ​ 196,919 ​ 81,088 ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME TAX EXPENSE ​ 4,241 ​ 42,715 ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ​ ​ 192,678 ​ ​ 38,373 ​ ​ ​ ​ ​ ​ ​ ​ ​ LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST ​ ( 1,493 ) ​ ( 290 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ATTRIBUTABLE TO ARLP ​ $ 191,185 ​ $ 38,083 ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ATTRIBUTABLE TO ARLP ​ ​ ​ ​ ​ ​ ​ GENERAL PARTNER ​ $ 1,384 ​ $ 1,431 ​ LIMITED PARTNERS ​ $ 189,801 ​ $ 36,652 ​ ​ ​ ​ ​ ​ ​ ​ ​ EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED ​ $ 1.45 ​ $ 0.28 ​ ​ ​ ​ ​ ​ ​ ​ ​ WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED ​ 127,289,340 ​ 127,195,219 ​ ​ * Recast as discussed in Note 1 – Organization and Presentation. 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 ​ ​ ​ March 31, ​ ​ 2023 2022* ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ​ $ 192,678 ​ $ 38,373 ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE INCOME: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Defined benefit pension plan ​ ​ ​ ​ ​ ​ ​ Amortization of prior service cost (1) ​ ​ 47 ​ ​ 47 ​ Amortization of net actuarial loss (1) ​ 173 ​ 483 ​ Total defined benefit pension plan adjustments ​ 220 ​ 530 ​ ​ ​ ​ ​ ​ ​ ​ ​ Pneumoconiosis benefits ​ ​ ​ ​ ​ ​ ​ Amortization of net actuarial loss (1) ​ 345 ​ 260 ​ Total pneumoconiosis benefits adjustments ​ 345 ​ 260 ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE INCOME ​ 565 ​ 790 ​ ​ ​ ​ ​ ​ ​ ​ ​ COMPREHENSIVE INCOME ​ ​ 193,243 ​ ​ 39,163 ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Comprehensive income attributable to noncontrolling interest ​ ​ ( 1,493 ) ​ ​ ( 290 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP ​ $ 191,750 ​ $ 38,873 ​ (1) Amortization of prior service cost and net actuarial loss is included in the computation of net periodic benefit cost (credit) (see Notes 13 and 15 for additional details). ​ * Recast as discussed in Note 1 – Organization and Presentation. 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) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ 2023 2022* ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM OPERATING ACTIVITIES ​ $ 223,259 ​ $ 90,626 ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment: ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ( 95,474 ) ​ ( 59,153 ) ​ Change in accounts payable and accrued liabilities ​ 12,110 ​ 13,551 ​ Proceeds from sale of property, plant and equipment ​ 2,395 ​ 928 ​ Contributions to equity method investments ​ ( 540 ) ​ — ​ JC Resources acquisition ​ ​ ( 64,999 ) ​ — ​ Oil & gas reserve acquisition ​ ​ ( 2,800 ) ​ ​ — ​ Other ​ 589 ​ ( 851 ) ​ Net cash used in investing activities ​ ( 148,719 ) ​ ( 45,525 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES: ​ ​ ​ ​ ​ ​ ​ Payments on equipment financings ​ ​ ( 3,759 ) ​ ( 4,472 ) ​ Borrowing under long-term debt ​ ​ 75,000 ​ — ​ Payments on long-term debt ​ ( 26,633 ) ​ — ​ Payments on finance lease obligations ​ ( 278 ) ​ ( 203 ) ​ Payment of debt issuance costs ​ ( 11,653 ) ​ — ​ Payments for purchases of units under unit repurchase program ​ ​ ( 18,209 ) ​ — ​ Payments for tax withholdings related to settlements under deferred compensation plans ​ ( 9,320 ) ​ — ​ Excess purchase price over the contributed basis from JC Resources acquisition ​ ​ ( 7,251 ) ​ — ​ Cash retained by JC Resources in acquisition ​ ​ ( 2,933 ) ​ ( 1,590 ) ​ Distributions paid to Partners ​ ​ ( 91,938 ) ​ ( 32,750 ) ​ Other ​ ( 2,339 ) ​ ( 298 ) ​ Net cash used in financing activities ​ ( 99,313 ) ​ ( 39,313 ) ​ NET CHANGE IN CASH AND CASH EQUIVALENTS ​ ( 24,773 ) ​ 5,788 ​ CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ​ 296,023 ​ 122,403 ​ CASH AND CASH EQUIVALENTS AT END OF PERIOD ​ $ 271,250 ​ $ 128,191 ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL CASH FLOW INFORMATION: ​ ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 2,175 ​ $ 1,254 ​ ​ ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL NON-CASH ACTIVITY: ​ ​ ​ ​ ​ ​ Accounts payable for purchase of property, plant and equipment ​ $ 56,391 ​ $ 21,876 ​ Right-of-use assets acquired by operating lease ​ $ — ​ $ 99 ​ Market value of common units issued under deferred compensation plans before tax withholding requirements ​ $ 27,906 ​ $ — ​ ​ * Recast as discussed in Note 1 – Organization and Presentation. 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, an indirect wholly owned subsidiary of ARLP. ● References to "Alliance Minerals" mean Alliance Minerals, LLC, an indirect wholly owned subsidiary of ARLP. ● References to "Alliance Resource Properties" mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary of ARLP. ​ 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. ​ JC Resources Acquisition ​ On February 22, 2023, we acquired approximately 2,682 oil & gas net royalty acres in the Delaware Basin from JC Resources LP ("JC Resources"), an entity owned by Mr. Craft, for $ 72.3 million, which was funded with cash on hand ("JC Resources Acquisition"). Because JC Resources is owned by Mr. Craft, the JC Resources Acquisition is accounted for as a reorganization of entities under common control, whereby the assets and liabilities acquired from JC Resources are combined with the ARLP Partnership at their historical amounts for all periods presented. The JC Resources Acquisition increased revenues by $ 2.6 million and income from operations, net income and comprehensive income by $ 1.4 million for the three months ended March 31, 2022. We did not recast historical earnings per limited partner unit as pre-acquisition earnings from the JC Resources Acquisition were allocated to our general partner. For more information on this acquisition please see Note 2 – 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 March 31, 2023 and December 31, 2022 and the results of our operations, comprehensive income and cash flows for the three months ended March 31, 2023 and 2022. 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, 2022. 5 Table of Contents ​ 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, 2023. ​ 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. ​ Cash and Cash Equivalents ​ Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with maturities of three months or less. At times the ARLP Partnership maintains deposits in federally insured financial institutions in excess of stated federally insured limits. Management monitors the credit ratings and concentration of risk with these financial institutions on a continuing basis to safeguard cash deposits. Based on this monitoring and other diligence, including discussions with representatives of the financial institutions, we have no reason to believe that any of the financial institutions in which we have deposits in excess of stated federally insured limits are facing financial difficulties, defaults or limited liquidity situations that would cause us to be unable to access to our deposits. ​ ​ 2. ACQUISITION S ​ JC Resources ​ As discussed in Note 1 – Organization and Presentation, on February 22, 2023, we completed the JC Resources Acquisition, which gives us increased exposure to a prolific area of the Delaware Basin that is within close proximity to reserves that we currently own. This acquisition was approved by the conflicts committee of MGP's board of directors, which is comprised entirely of independent directors. Because JC Resources is under common control with us, we recorded the acquisition at JC Resources' carrying value for each period presented. The carrying value of the mineral interests as well as related receivables and payables at February 22, 2023 was $ 65.0 million inclusive of $ 25.4 million and $ 37.8 million of mineral interests in proved and unproved properties, respectively. ​ Acquisition Agreement ​ On January 27, 2023, we entered into a one-year collaborative agreement with a third party, effective January 1, 2023, committing up to $ 35.0 million for the acquisition of oil & gas mineral interests in the Midland and Delaware Basins. Under the agreement, the third party assists us in the identification, evaluation, and acquisition of target oil & gas mineral interests. In exchange for these services, the third party receives a participation share, partially funded by the third party, and is paid a periodic management fee. As of March 31, 2023, we have purchased $ 1.6 million and $ 1.2 million of oil & gas mineral interests in proved and unproved properties, respectively, pursuant to this agreement. Management fees paid under this agreement have been immaterial. ​ ​ 3. CONTINGENCIES ​ Certain of our subsidiaries are party to litigation in which the plaintiffs allege violations of the Fair Labor Standards Act and state law due to 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 and collective action certification, which we oppose, and the courts have not yet made definitive final rulings on those issues. We have scheduled a mediation with the plaintiffs for June 12, 2023. We do not have an estimate of the range of potential exposure; however, we are in the process of developing such an estimate based on the facts related to these matters. We are defending this litigation vigorously and continue to believe the plaintiffs' claims are without merit. We believe our ultimate exposure, if any, will not be material to our results of operations or financial position; 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. ​ 6 Table of Contents 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. ​ 4. INVENTORIES ​ Inventories consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ 2023 2022 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal ​ $ 50,406 ​ $ 23,553 ​ Supplies (net of reserve for obsolescence of $ 6,967 and $ 6,601 , respectively) ​ 58,242 ​ 53,773 ​ Total inventories, net ​ $ 108,648 ​ $ 77,326 ​ ​ ​ 5. FAIR VALUE MEASUREMENTS ​ The following table summarizes our fair value measurements within the hierarchy not included elsewhere in these notes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2023 ​ December 31, 2022 ​ ​ Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 ​ ​ (in thousands) ​ Long-term debt ​ $ — ​ $ 469,904 ​ $ — ​ $ — ​ $ 424,420 ​ $ — ​ Total ​ $ — ​ $ 469,904 ​ $ — ​ $ — ​ $ 424,420 ​ $ — ​ ​ 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 6 – 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 Table of Contents ​ 6. LONG-TERM DEBT ​ Long-term debt consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unamortized Discount and ​ ​ ​ Principal ​ Debt Issuance Costs ​ ​ ​ March 31, ​ December 31, ​ March 31, ​ December 31, ​ ​ 2023 2022 2023 2022 ​ ​ (in thousands) ​ Revolving credit facility ​ $ — ​ $ — ​ $ ( 9,313 ) ​ $ ( 2,702 ) ​ Term Loan ​ 75,000 ​ — ​ ( 1,643 ) ​ — ​ Senior notes ​ 373,367 ​ 400,000 ​ ( 1,779 ) ​ ( 2,134 ) ​ Securitization facility ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ November 2019 equipment financing ​ ​ 18,266 ​ ​ 21,072 ​ ​ — ​ ​ — ​ June 2020 equipment financing ​ ​ 4,985 ​ ​ 5,937 ​ ​ — ​ ​ — ​ ​ ​ 471,618 ​ 427,009 ​ ( 12,735 ) ​ ( 4,836 ) ​ Less current maturities ​ ( 40,974 ) ​ ( 24,970 ) ​ 420 ​ — ​ Total long-term debt ​ $ 430,644 ​ $ 402,039 ​ $ ( 12,315 ) ​ $ ( 4,836 ) ​ ​ Credit Facility. On January 13, 2023, Alliance Coal, as borrower, entered into a Credit Agreement (the "Credit Agreement") with various financial institutions. The Credit Agreement provides for a $ 425 million revolving credit facility, which includes a sublimit of $ 15.0 million for swingline borrowings and permits the issuance of letters of credit of up to the full amount of $ 425 million (the "Revolving Credit Facility"), and for a term loan in an aggregate principal amount of $ 75 million (the "Term Loan"). The Credit Agreement matures on March 9, 2027, at which time the aggregate outstanding principal amount of all Revolving Credit Facility advances and all Term Loan advances are required to be repaid in full. The Credit Agreement will instead mature on January 30, 2025, if on that date our Senior Notes, as discussed below, are still outstanding and Alliance Coal does not have liquidity of at least $ 200 million. Interest is payable quarterly, with principal of the Term Loan due in quarterly installments equal to 6.25 % of the original principal amount of the Term Loan beginning with the quarter ending June 30, 2023 and the balance payable at maturity. The Revolving Credit Facility replaces the $ 459.5 million revolving credit facility, which included a sublimit of $ 125.0 million for the issuance of letters of credit and a sublimit of $ 15.0 million for swingline borrowings, extended to the Intermediate Partnership under its Fifth Amended and Restated Credit Agreement, dated as of March 9, 2020 that would have expired on March 9, 2024. We incurred debt issuance costs during the three months ended March 31, 2023 of $ 11.7 million in connection with the Credit Agreement. These debt issuance costs are deferred and amortized as a component of interest expense over the term of the Revolving Credit Facility. ​ The Revolving Credit Facility is underwritten by a syndicate of eighteen financial institutions and the obligations of the lenders are individual obligations, which means the failure of one or more lenders to be able to fund its obligation does not relieve the remaining lenders from funding their obligations. Based on our diligence, including discussions with representatives of certain of these financial institutions, as of March 31, 2023 we have no reason to believe that the banks within our syndicate are facing financial difficulties, defaults or limited liquidity situations that would cause them to be unable to fund their obligations under the Credit Agreement. However, should any of the banks in our syndicate experience conditions in the future that limit their ability to fund their obligations, the amount available under the Revolving Credit Facility could be reduced. ​ The Credit Agreement is guaranteed by ARLP and certain of its subsidiaries, including the Intermediate Partnership and most of the direct and indirect subsidiaries of Alliance Coal (the "Subsidiary Guarantors"). The Credit Agreement also is secured by substantially all of the assets of the Subsidiary Guarantors and Alliance Coal. Borrowings under the Credit Agreement bear interest, at our option, at either (i) an adjusted term rate plus the applicable margin or (ii) the base rate plus the applicable margin. The base rate is the highest of (i) the Overnight Bank Funding Rate plus 0.50 %, (ii) the Administrative Agent's prime rate, and (iii) the Daily Simple Secured Overnight Financing Rate plus 100 basis points. The applicable margin for borrowings under the Credit Agreement are determined by reference to the Consolidated Debt to Consolidated Cash Flow Ratio and was 0.54 % as of March 31, 2023. At March 31, 2023, we had $ 41.0 million of letters of credit outstanding with $ 384.0 million available for borrowing under the Revolving Credit Facility. We incurred an annual commitment fee of 0.50 % on the undrawn portion of the Revolving Credit Facility. We utilize the Credit 8 Table of Contents Agreement, as appropriate, for working capital requirements, capital expenditures and investments, scheduled debt payments and distribution payments. ​ The Credit Agreement contains various restrictions affecting Alliance Coal and its subsidiaries, including, among other things, restrictions on incurrence of additional indebtedness and liens, sale of assets, investments, mergers and consolidations and transactions with affiliates. In each case, these restrictions are subject to various exceptions. In addition, restrictions apply to cash distributions by Alliance Coal to the Intermediate Partnership if such distribution would result in exceeding a minimum fixed charge coverage ratio (as determined in the Credit Agreement) or in Alliance Coal having liquidity of less than $ 200 million. The Credit Agreement requires us to maintain (a) a debt of Alliance Coal to cash flow ratio of not more than 1.5 to 1.0, (b) a consolidated debt of Alliance Coal and the Intermediate Partnership to cash flow ratio of not more than 2.5 to 1.0 and (c) an interest coverage ratio of not less than 3.0 to 1.0, in each case, during the four most recently ended fiscal quarters. The debt of Alliance Coal to cash flow ratio, consolidated debt of Alliance Coal and the Intermediate Partnership to cash flow ratio, and interest coverage ratio were 0.09 to 1.0, 0.54 to 1.0 and 294.35 to 1.0, respectively, for the trailing twelve months ended March 31, 2023. We were in compliance with the covenants of the Credit Agreement as of March 31, 2023 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. During the three months ended March 31, 2023, we repurchased $ 26.6 million of our Senior Notes. The gain on extinguishment of the Senior Notes is immaterial. ​ Accounts Receivable Securitization. Certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership are party to a $ 60.0 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 $ 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 March 31, 2023, we had $ 11.7 million of letters of credit outstanding with $ 48.3 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. In January 2023, we extended the term of the Securitization Facility to January 2024. The Securitization Facility was previously scheduled to mature in January 2023. At March 31, 2023, we did no t have any outstanding borrowings under the Securitization Facility. ​ 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. ​ 9 Table of Contents 7. INCOME TAXES ​ Components of income tax expense are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2023 2022 ​ ​ (in thousands) Current: ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 4,312 ​ $ 5,034 ​ State ​ 301 ​ 386 ​ ​ ​ 4,613 ​ 5,420 ​ Deferred: ​ ​ ​ ​ ​ ​ ​ Federal ​ ( 331 ) ​ 34,920 ​ State ​ ( 41 ) ​ 2,375 ​ ​ ​ ( 372 ) ​ 37,295 ​ Income tax expense ​ $ 4,241 ​ $ 42,715 ​ ​ On March 15, 2022, Alliance Minerals changed its U.S. 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. The 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 three months ended March 31, 2022. ​ The effective income tax rate for our income tax expense for the three months ended March 31, 2023 is less than the federal statutory rate, primarily due to the portion of income not subject to income taxes. The effective income tax rate for our income tax expense for the three months ended March 31, 2022 is greater than the federal statutory rate, primarily due to the effect of the Tax Election previously discussed, partially offset by the portion of income not subject to income taxes. ​ Our 2019 through 2022 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. ​ 8. 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 are offset by all distributions received by Bluegrass Minerals from the former general partners of AllDale I & II. All members have recovered their investment and Bluegrass Minerals began receiving its profits interest distributions in late 2022. We hold the managing member interest in Cavalier Minerals. ​ 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 %. 10 Table of Contents ​ 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 9 – Investments for more information. ​ Francis ​ On April 5, 2022, we invested $ 20 million in Francis Renewable Energy, LLC ("Francis"), in the form of a convertible note. Our convertible note matured on April 1, 2023 and was converted into preferred equity interests in Francis. Prior to conversion, we had determined the note more closely represented equity as opposed to debt. Therefore, we accounted for the convertible note as an equity contribution even though we did not participate in Francis' earnings or losses and were not eligible to receive distributions during the term of the note. After the conversion on April 1, 2023, we will participate in earnings and losses and be eligible to receive distributions. ​ 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 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. After the conversion of our note to preferred equity, we will record equity income or loss based on Francis' distribution structure. See Note 9 – 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, L.P. ("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. As of March 31, 2023, we have funded $ 4.6 million of this commitment. 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 9 – Investments for more information. ​ 11 Table of Contents 9. INVESTMENT S ​ AllDale III ​ As discussed in Note 8 – 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 ​ ​ ​ March 31, ​ ​ 2023 2022 ​ ​ ​ (in thousands) ​ Beginning balance ​ $ 25,284 ​ $ 26,325 ​ Equity method investment income ​ ​ 425 ​ ​ 883 ​ Distributions received ​ ​ ( 1,014 ) ​ ​ ( 1,014 ) ​ Ending balance ​ $ 24,695 ​ $ 26,194 ​ ​ Francis ​ As discussed in Note 8 – Variable Interest Entities, we account for our ownership interest in the income or loss of Francis as an equity method investment. As a development stage company, Francis depends on capital contributions to meet its operating and debt obligations. We currently believe that the carrying value of our investment is recoverable; however, if Francis is unable to raise sufficient funds to continue its operations and meet its debt obligations, it could have an adverse effect on our investment. ​ NGP ETP IV ​ As discussed in Note 8 – 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 months ended March 31, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ March 31, ​ ​ 2023 ​ ​ ​ ​ (in thousands) ​ Beginning balance ​ ​ $ 4,087 ​ Contributions ​ ​ ​ 540 ​ Equity method investment loss ​ ​ ​ ( 373 ) ​ Ending balance ​ ​ $ 4,254 ​ ​ Infinitum ​ We hold $ 42.0 million of Series D Preferred Stock in Infinitum Electric, Inc. ("Infinitum"), a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators. Our 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 purchases. 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. ​ 12 Table of Contents 10. PARTNERS' CAPITAL ​ Distributions ​ Distributions paid or declared during 2022 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Date Per Unit Cash Distribution Total Cash Distribution ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ February 14, 2022 ​ $ 0.2500 ​ $ 32,750 ​ May 13, 2022 ​ ​ 0.3500 ​ ​ 45,810 ​ August 12, 2022 ​ ​ 0.4000 ​ ​ 52,338 ​ November 14, 2022 ​ ​ 0.5000 ​ ​ 65,449 ​ Total ​ $ 1.5000 ​ $ 196,347 ​ ​ ​ ​ ​ ​ ​ ​ ​ February 14, 2023 ​ $ 0.7000 ​ $ 91,938 ​ May 15, 2023 (1) ​ ​ 0.7000 ​ ​ — ​ Total ​ $ 1.4000 ​ $ 91,938 ​ (1) On April 28, 2023, we declared this quarterly distribution payable on May 15, 2023 to all unitholders of record as of May 8, 2023. ​ Unit Repurchase Program ​ In January 2023, the board of directors of MGP authorized a $ 93.5 million increase to the unit repurchase program, which had $ 6.5 million of available capacity as of December 31, 2022. As a result, we are authorized to repurchase up to a total of $ 100.0 million of ARLP common units. During the first quarter of 2023, we repurchased and retired 860,060 units at an average unit price of $ 21.17 for an aggregate purchase price of $ 18.2 million. Since inception of the unit repurchase program, we have repurchased and retired 6,320,664 units at an average unit price of $ 17.67 for an aggregate purchase price of $ 111.7 million. ​ 13 Table of Contents Change in Partners' Capital ​ The following tables present the quarterly change in Partners' Capital for the three months ended March 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Limited ​ General ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ Limited Partner ​ Partners' ​ Partner's ​ Comprehensive ​ Noncontrolling ​ Total Partners' ​ ​ Units Capital Capital Income (Loss) Interest Capital ​ ​ (in thousands, except unit data) ​ Balance at January 1, 2023 127,195,219 ​ $ 1,656,025 ​ $ 66,548 ​ $ ( 41,054 ) ​ $ 26,507 ​ $ 1,708,026 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 189,801 ​ 1,384 ​ — ​ ​ 1,493 192,678 ​ Actuarially determined long-term liability adjustments — ​ — ​ — ​ 565 ​ — 565 ​ Total comprehensive loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 193,243 ​ Settlement of deferred compensation plans ​ 860,060 ​ ​ ( 9,320 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 9,320 ) ​ Purchase of units under unit repurchase program ​ ( 860,060 ) ​ ​ ( 18,209 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 18,209 ) ​ Common unit-based compensation — ​ 2,830 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,830 ​ Distributions on deferred common unit-based compensation — ​ ( 2,901 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 2,901 ) ​ Distributions from consolidated company to affiliate noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 2,288 ) ​ ​ ( 2,288 ) ​ JC Resources acquisition - See Note 1 ​ — ​ ​ ( 7,251 ) ​ ​ ( 64,999 ) ​ ​ — ​ ​ — ​ ​ ( 72,250 ) ​ Cash retained by JC Resources in acquisition - See Note 1 ​ — ​ ​ — ​ ​ ( 2,933 ) ​ ​ — ​ ​ — ​ ​ ( 2,933 ) ​ Distributions to Partners — ​ ​ ( 89,037 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 89,037 ) ​ Balance at March 31, 2023 ​ 127,195,219 ​ $ 1,721,938 ​ $ — ​ $ ( 40,489 ) ​ $ 25,712 ​ $ 1,707,161 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Limited ​ General ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ Limited Partner ​ Partners' ​ Partner's ​ Comprehensive ​ Noncontrolling ​ Total Partners' ​ ​ Units Capital Capital * Income (Loss) Interest Capital * ​ ​ (in thousands, except unit data) ​ Balance at January 1, 2022 127,195,219 ​ $ 1,279,183 ​ $ 68,075 ​ $ ( 64,229 ) ​ $ 11,115 ​ $ 1,294,144 ​ Comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income — ​ 36,652 ​ 1,431 ​ — ​ ​ 290 38,373 ​ Actuarially determined long-term liability adjustments — ​ — ​ — ​ 790 ​ — 790 ​ Total comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 39,163 ​ Common unit-based compensation — ​ 2,640 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,640 ​ Distributions on deferred common unit-based compensation — ​ ( 950 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 950 ) ​ Distributions from consolidated company to affiliate noncontrolling interest ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 298 ) ​ ​ ( 298 ) ​ Cash retained by JC Resources in acquisition - See Note 1 ​ — ​ ​ — ​ ​ ( 1,590 ) ​ ​ — ​ ​ — ​ ​ ( 1,590 ) ​ Distributions to Partners — ​ ​ ( 31,800 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 31,800 ) ​ Balance at March 31, 2022 127,195,219 ​ $ 1,285,725 ​ $ 67,916 ​ $ ( 63,439 ) ​ $ 11,107 ​ $ 1,301,309 ​ * Recast as discussed in Note 1 – Organization and Presentation. ​ 14 Table of Contents 11. 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 16 – Segment Information. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal Operations ​ Royalties ​ Other, ​ ​ ​ ​ ​ ​ Illinois ​ ​ ​ ​ Corporate and ​ ​ ​ ​ Basin Appalachia Oil & Gas Coal Elimination Consolidated ​ ​ ​ (in thousands) ​ Three Months Ended March 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 336,910 ​ $ 241,874 ​ $ — ​ $ — ​ $ — ​ $ 578,784 ​ Oil & gas royalties ​ ​ — ​ ​ — ​ ​ 34,497 ​ ​ — ​ ​ — ​ ​ 34,497 ​ Coal royalties ​ ​ — ​ ​ — ​ ​ — ​ ​ 15,513 ​ ​ ( 15,513 ) ​ ​ — ​ Transportation revenues ​ ​ 21,328 ​ ​ 8,910 ​ ​ — ​ ​ — ​ ​ — ​ ​ 30,238 ​ Other revenues ​ ​ 2,168 ​ ​ 475 ​ ​ 1,040 ​ ​ — ​ ​ 15,720 ​ ​ 19,403 ​ Total revenues ​ $ 360,406 ​ $ 251,259 ​ $ 35,537 ​ $ 15,513 ​ $ 207 ​ $ 662,922 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Coal sales ​ $ 253,905 ​ $ 134,455 ​ $ — ​ $ — ​ $ — ​ $ 388,360 ​ Oil & gas royalties * ​ ​ — ​ ​ — ​ ​ 33,396 ​ ​ — ​ ​ — ​ ​ 33,396 ​ Coal royalties ​ ​ — ​ ​ — ​ ​ — ​ ​ 15,167 ​ ​ ( 15,167 ) ​ ​ — ​ Transportation revenues ​ ​ 18,891 ​ ​ 10,481 ​ ​ — ​ ​ — ​ ​ — ​ ​ 29,372 ​ Other revenues ​ ​ 1,900 ​ ​ 363 ​ ​ 124 ​ ​ — ​ ​ 9,907 ​ ​ 12,294 ​ Total revenues ​ $ 274,696 ​ $ 145,299 ​ $ 33,520 ​ $ 15,167 ​ $ ( 5,260 ) ​ $ 463,422 ​ * Recast as discussed in Note 1 – Organization and Presentation. ​ 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 March 31, 2023 and disaggregated by segment and contract duration. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 and ​ ​ ​ 2023 2024 2025 Thereafter Total ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Illinois Basin Coal Operations coal revenues ​ $ 998,751 ​ $ 891,382 ​ $ 344,601 ​ $ 243,600 ​ $ 2,478,334 Appalachia Coal Operations coal revenues ​ ​ 646,670 ​ ​ 550,147 ​ ​ 325,425 ​ ​ 1,600 ​ ​ 1,523,842 Total coal revenues (1) ​ $ 1,645,421 ​ $ 1,441,529 ​ $ 670,026 ​ $ 245,200 ​ $ 4,002,176 (1) Coal revenues generally consists of consolidated revenues excluding our Oil & Gas Royalties segment as well as intercompany revenues from our Coal Royalties segment . ​ 12 . EARNINGS PER LIMITED PARTNER UNIT ​ We utilize the two-class method in calculating basic and diluted earnings per limited partner unit ("EPU"). Subsequent to the JC Resources Acquisition, which is discussed in more detail in Note 1 – Organization and Presentation, net income attributable to ARLP is allocated to limited partners and participating securities with nonforfeitable distributions or distribution equivalents, while net losses attributable to ARLP are allocated only to limited partners but not to participating securities. Prior to the JC Resources Acquisition, in addition to limited partners and participating securities allocations, amounts are also allocated to our general partner for historical earnings from the mineral interests acquired in the JC Resources Acquisition. ​ 15 Table of Contents 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 months ended March 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ 2023 2022 (1) ​ ​ (in thousands, except per unit data) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to ARLP ​ $ 191,185 ​ $ 38,083 ​ Adjustment: ​ ​ ​ ​ ​ ​ ​ General partner's interest in net income attributable to ARLP ​ ( 1,384 ) ​ ( 1,431 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Limited partners' interest in net income attributable to ARLP ​ 189,801 ​ 36,652 ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: ​ ​ ​ ​ ​ ​ ​ Distributions to participating securities ​ ( 2,432 ) ​ ( 1,552 ) ​ Undistributed earnings attributable to participating securities ​ ( 2,979 ) ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to ARLP available to limited partners ​ $ 184,390 ​ $ 35,100 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average limited partner units outstanding – basic and diluted ​ 127,289 ​ 127,195 ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per limited partner unit - basic and diluted (2) ​ $ 1.45 ​ $ 0.28 ​ (1) Recast as discussed in Note 1 – Organization and Presentation. (2) 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 3,147 and 3,139 for the three months ended March 31, 2023 and 2022, respectively, were considered anti-dilutive under the treasury stock method . ​ ​ 13. 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 ​ ​ March 31, ​ ​ ​ 2023 2022 ​ ​ ​ (in thousands) ​ Beginning balance ​ $ 49,452 ​ $ 53,448 ​ Changes in accruals ​ 3,874 ​ 2,275 ​ Payments ​ ( 3,859 ) ​ ( 2,804 ) ​ Interest accretion ​ 550 ​ 287 ​ Ending balance ​ $ 50,017 ​ $ 53,206 ​ ​ 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 March 31, 2023 are $ 4.1 million and are included in Other long-term assets on our condensed consolidated balance sheet. 16 Table of Contents ​ 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 ​ ​ ​ March 31, ​ ​ ​ 2023 2022 ​ ​ (in thousands) ​ Black lung benefits: ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 669 ​ $ 947 Interest cost (1) ​ 1,238 ​ 747 ​ Net amortization (1) ​ 346 ​ 260 ​ Net periodic benefit cost ​ $ 2,253 ​ $ 1,954 ​ (1) Interest cost and net amortization are included in the Other income (expense) line item within our condensed consolidated statements of income. ​ ​ 14. COMMON UNIT-BASED COMPENSATION PLANS ​ Long-Term Incentive Plan ​ A summary of non-vested LTIP grants as of and for the three months ended March 31, 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of units Weighted average grant date fair value per unit Intrinsic value ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-vested grants at January 1, 2023 ​ 3,697,133 ​ $ 7.40 ​ ​ 75,126 ​ Granted (1) 447,225 ​ ​ 21.54 ​ ​ ​ ​ Vested (2) ( 1,291,330 ) ​ 5.02 ​ ​ ​ ​ Forfeited ( 118,144 ) ​ 6.48 ​ ​ ​ ​ Non-vested grants at March 31, 2023 2,734,884 ​ 10.88 ​ ​ 55,163 ​ (1) The restricted units granted during 2023 have certain minimum-value guarantees per unit, regardless of whether or not the awards vest. (2) During the three months ended March 31, 2023, we issued 860,060 unrestricted common units to the LTIP participants. The remaining vested units were settled in cash to satisfy tax withholding obligations of the LTIP participants. ​ LTIP expense for grants of restricted units was $ 2.3 million for each of the three months ended March 31, 2023 and 2022. The total obligation associated with LTIP grants of restricted units as of March 31, 2023 was $ 11.5 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. As of March 31, 2023, there was $ 18.2 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 1.3 years. ​ 17 Table of Contents Supplemental Executive Retirement Plan and Directors' Deferred Compensation Plan ​ A summary of SERP and Directors' Deferred Compensation Plan activity as of and for the three months ended March 31, 2023 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, 2023 ​ 742,540 ​ $ 20.28 ​ $ 15,088 ​ Granted ​ 23,980 ​ ​ 21.30 ​ ​ ​ ​ Phantom units outstanding as of March 31, 2023 766,520 ​ 20.31 ​ ​ 15,461 ​ ​ Total SERP and Directors' Deferred Compensation Plan expense was $ 0.6 million and $ 0.2 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 15.6 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets. ​ 15. 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 ​ ​ ​ March 31, ​ ​ ​ 2023 2022 ​ ​ (in thousands) ​ Interest cost ​ $ 1,295 ​ $ 932 ​ Expected return on plan assets ​ ( 1,598 ) ​ ( 1,665 ) ​ Amortization of prior service cost ​ ​ 47 ​ ​ 47 ​ Amortization of net loss ​ 173 ​ 483 ​ Net periodic benefit credit (1) ​ $ ( 83 ) ​ $ ( 203 ) ​ (1) Net periodic benefit credit 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 relief provided by the American Rescue Plan Act enacted in March 2021, we do not expect to make contributions to the Pension Plan during 2023. ​ 16. 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, metallurgical and industrial users as well as royalty income from oil & gas mineral interests. In addition, we continue to position ourselves as a reliable energy partner for the future as we pursue opportunities that support the advancement of energy and related infrastructure. 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 18 Table of Contents 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. ​ The Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC's ("Gibson County Coal") mining complex, (b) the Warrior Coal, LLC ("Warrior") mining complex, (c) the River View mining complex and (d) the Hamilton mining complex. The segment also includes our Mt. Vernon Transfer Terminal, LLC ("Mt. Vernon") coal loading terminal in Indiana which operates on the Ohio River, Mid-America Carbonates, LLC ("MAC") and other support services, and our non-operating mining complexes. ​ The Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge mining complex and (c) the MC Mining, LLC ("MC Mining") 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 9 – 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 9 – Investments), Wildcat Insurance, which assists the ARLP Partnership with its insurance requirements, AROP Funding and Alliance Finance (both discussed in Note 6 – Long-Term Debt) 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. ​ 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 March 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside ​ $ 360,406 ​ $ 251,259 ​ $ 35,537 ​ $ — ​ $ 15,720 ​ $ 662,922 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 15,513 ​ ​ ( 15,513 ) ​ ​ — ​ Total revenues (2) ​ ​ 360,406 ​ ​ 251,259 ​ ​ 35,537 ​ ​ 15,513 ​ ​ 207 ​ ​ 662,922 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (3) ​ 207,069 ​ ​ 125,799 ​ ​ 4,424 ​ ​ 5,388 ​ ​ ( 3,384 ) ​ 339,296 ​ Segment Adjusted EBITDA (4) ​ 132,008 ​ ​ 116,550 ​ ​ 30,045 ​ ​ 10,125 ​ ​ 3,219 ​ 291,947 ​ Total assets ​ 840,792 ​ ​ 459,834 ​ ​ 768,728 ​ ​ 326,064 ​ ​ 392,331 ​ 2,787,749 ​ Capital expenditures (5) ​ 61,982 ​ ​ 32,505 ​ ​ 2 ​ ​ 400 ​ ​ 585 ​ 95,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues - Outside (1) ​ $ 274,696 ​ $ 145,299 ​ $ 33,520 ​ $ — ​ $ 9,907 ​ $ 463,422 ​ Revenues - Intercompany ​ ​ — ​ ​ — ​ ​ — ​ ​ 15,167 ​ ​ ( 15,167 ) ​ ​ — ​ Total revenues (2) ​ ​ 274,696 ​ ​ 145,299 ​ ​ 33,520 ​ ​ 15,167 ​ ​ ( 5,260 ) ​ ​ 463,422 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment Adjusted EBITDA Expense (1) (3) ​ 177,589 ​ ​ 83,715 ​ ​ 3,277 ​ ​ 4,819 ​ ​ ( 7,944 ) ​ 261,456 ​ Segment Adjusted EBITDA (1) (4) ​ 78,215 ​ ​ 51,103 ​ ​ 30,835 ​ ​ 10,348 ​ ​ 2,686 ​ 173,187 ​ Total assets (1) ​ 704,627 ​ ​ 425,929 ​ ​ 718,710 ​ ​ 291,153 ​ ​ 153,044 ​ 2,293,463 ​ Capital expenditures (5) ​ 36,547 ​ ​ 18,345 ​ ​ — ​ ​ — ​ ​ 4,261 ​ 59,153 ​ (1) Recast for the JC Resources Acquisition as discussed in Note 1 – Organization and Presentation. 19 Table of Contents (2) 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. ​ (3) Segment Adjusted EBITDA Expense includes operating expenses, coal purchases, if applicable, 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. ​ ​ The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ ​ 2023 2022 ​ ​ (in thousands) ​ Operating expenses (excluding depreciation, depletion and amortization) ​ $ 338,723 ​ $ 262,023 ​ Other expense (income) ​ 573 ​ ( 567 ) ​ Segment Adjusted EBITDA Expense ​ $ 339,296 ​ $ 261,456 ​ ​ (4) 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 ​ ​ ​ March 31, ​ ​ ​ 2023 2022 ​ ​ (in thousands) ​ Net income ​ $ 192,678 ​ $ 38,373 ​ Noncontrolling interest ​ ​ ( 1,493 ) ​ ​ ( 290 ) ​ Net income attributable to ARLP ​ $ 191,185 ​ $ 38,083 ​ General and administrative ​ 21,085 ​ 18,622 ​ Depreciation, depletion and amortization ​ 65,550 ​ 64,140 ​ Interest expense, net ​ 9,886 ​ 9,627 ​ Income tax expense ​ 4,241 ​ 42,715 ​ Consolidated Segment Adjusted EBITDA ​ $ 291,947 ​ $ 173,187 ​ ​ ​ (5) Capital Expenditure shown excludes the $ 72.3 million paid for the JC Resources Acquisition and $ 2.8 million paid towards the Acquisition Agreement entered into on January 27, 2023 (See Note 2 – Acquisitions) . ​ ​ ​ ​ ​ ​ ​ 20 Table of Contents ​