What changed in this filing

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Item 1. Financial Statements

2023-11-08 compared with 2023-08-08 · 168 added, 106 removed, 582 unchanged (32% of the section changed)

4 unchanged sentences

(In thousands, except unit data)

September 30,

CURRENT ASSETS:

57 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

SALES AND OPERATING REVENUES:

10 unchanged sentences

INCOME FROM OPERATIONS

Interest expense (net of interest capitalized for the three and six months ended June 30, 2023 and 2022 of $ 1,216 , $ 171 , $ 2,623 and $ 241 , respectively)

Interest expense (net of interest capitalized for the three and nine months ended September 30, 2023 and 2022 of $ 1,809 , $ 264 , $ 4,432 and $ 505 , respectively)

Interest income

17 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

OTHER COMPREHENSIVE INCOME:

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(In thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

JC Resources acquisition

Payments for acquisitions of businesses

Escrow deposit for oil & gas reserve acquisition

Oil & gas reserve acquisition

59 unchanged sentences

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 recasting of 2022 for the JC Resources Acquisition increased revenues by $ 3.4 million and $ 5.9 million for the three and six months ended June 30, 2022, respectively, and increased income from operations, net income and comprehensive income by $ 2.1 million and $ 3.5 million for the three and six months ended June 30, 2022, respectively.

The recasting of 2022 for the JC Resources Acquisition increased revenues by $ 4.0 million and $ 10.0 million for the three and nine months ended September 30, 2022, respectively, and increased income from operations, net income and comprehensive income by $ 3.1 million and $ 6.6 million for the three and nine months ended September 30, 2022, respectively.

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.

For more information on this acquisition please see Note 2 – Acquisitions.

Ascend Investment

On August 22, 2023, we purchased $ 25.0 million of Series D Preferred Stock (the "Ascend Preferred Stock") from Ascend Elements, Inc.

("Ascend"), a U.S.-based manufacturer and recycler of sustainable, engineered battery materials for electric vehicles.

The Ascend Preferred Stock provides for non-cumulative dividends when and if declared by Ascend's board of directors.

Each share is convertible, at any time, at our option, into shares of common stock of Ascend.

Our investment in Ascend furthers our business strategy to pursue opportunities that support the advancement of energy and related infrastructure and leverage our core competencies and relationships.

For more information on this investment please see Note 9 – Equity Investments.

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of June 30, 2023 and December 31, 2022 and the results of our operations and comprehensive income for the three months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022.

The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of September 30, 2023 and December 31, 2022, the results of our operations and comprehensive income for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 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

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.

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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.

The JC Resources Acquisition increased revenues included in our condensed consolidated statements of income by $ 2.4 million and $ 5.4 million for the three and six months ended June 30, 2023, respectively.

The JC Resources Acquisition increased revenues included in our condensed consolidated statements of income by $ 3.0 million and $ 8.3 million for the three and nine months ended September 30, 2023, respectively.

Acquisition Agreement

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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 June 30, 2023, we have purchased $ 1.9 million and $ 2.1 million of oil & gas mineral interests in proved and unproved properties, respectively, pursuant to this agreement.

As of September 30, 2023, we have purchased $ 4.0 million and $ 3.8 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.

Miscellaneous Acquisitions

In addition to the acquisitions under the collaborative agreement discussed above, we purchased $ 3.6 million and $ 2.5 million of oil & gas mineral interests in proved and unproved properties, respectively, within the Midland and Delaware Basins during the nine months ended September 30, 2023.

CONTINGENCIES

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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 had a mediation with the plaintiffs on June 12, 2023 but no settlement was reached.

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.

however, if our current belief as to the merit of the claims 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.

3 unchanged sentences

Inventories consist of the following:

September 30,

(in thousands)

1 unchanged sentence

Total inventories, net

During the nine months ended September 30, 2023, we recorded lower of cost or net realizable value adjustments of $ 14.2 million to our coal inventories as a result of lower coal sale prices and higher cost per ton primarily due to the impact of the Mettiki longwall being idle since June 2023 as a result of delayed development of a new longwall district.

FAIR VALUE MEASUREMENTS

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

June 30, 2023

September 30, 2023

December 31, 2022

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Debt Issuance Costs

September 30,

(in thousands)

12 unchanged sentences

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 six months ended June 30, 2023 of $ 11.7 million in connection with the Credit Agreement.

We incurred debt issuance costs during the nine months ended September 30, 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 June 30, 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.

Based on our diligence, including discussions with representatives of certain of these financial institutions, as of September 30, 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.

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 one-month, three-month or six-month term rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York, 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 0.49 % as of June 30, 2023.

At June 30, 2023, we had $ 41.0 million of letters of credit outstanding with $ 384.0 million available for borrowing under the Revolving Credit Facility.

The applicable margin for borrowings under the Credit Agreement are determined by reference to the Consolidated Debt to Consolidated Cash Flow Ratio.

For borrowings under the Term Loan, we elected the three-month term rate, with applicable margin, which was 8.55 % as of September 30, 2023.

At September 30, 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

Agreement, as appropriate, for working capital requirements, capital expenditures and investments, scheduled debt payments and distribution payments.

We utilize the Credit 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.

2 unchanged sentences

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 0.10 to 1.0, 0.49 to 1.0 and 145.52 to 1.0, respectively, for the trailing twelve months ended June 30, 2023.

We were in compliance with the covenants of the Credit Agreement as of June 30, 2023 and anticipate remaining in compliance with the covenants.

Senior Notes.

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 0.10 to 1.0, 0.43 to 1.0 and 95.83 to 1.0, respectively, for the trailing twelve months ended September 30, 2023.

We were in compliance with the covenants of the Credit Agreement as of September 30, 2023 and anticipate remaining in compliance with the covenants.

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.

2 unchanged sentences

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 six months ended June 30, 2023, we repurchased $ 60.8 million of our Senior Notes.

During the nine months ended September 30, 2023, we repurchased or redeemed $ 115.4 million of our Senior Notes.

The gain on extinguishment of the Senior Notes is immaterial.

In July 2023, we redeemed an additional $ 50.0 million of our Senior Notes.

Accounts Receivable Securitization

3 unchanged sentences

The Securitization Facility bears interest based on a short-term bank yield index.

On June 30, 2023, we had $ 11.7 million of letters of credit outstanding with $ 48.3 million available for borrowing under the Securitization Facility.

On September 30, 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.

1 unchanged sentence

The Securitization Facility was previously scheduled to mature in January 2023.

At June 30, 2023, we did no t have any outstanding borrowings under the Securitization Facility.

At September 30, 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").

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.

Upon maturity, the equipment reverted to the Intermediate Partnership.

June 2020 Equipment Financing

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

3 unchanged sentences

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 six months ended June 30, 2022.

The effective income tax rate for our income tax expense for the three months ended June 30, 2023 and 2022 and the six months ended June 30, 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 six months ended June 30, 2022 is greater than the federal statutory rate, primarily due to the effect of the Tax Election, 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.

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 nine months ended September 30, 2022.

The effective income tax rate for our income tax expense for the three and nine months ended September 30, 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 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.

Our 2020 through 2022 tax years remain open to examination by tax authorities, and lower-tier partnership income tax returns for the tax years ended December 31, 2020 and 2021 are being audited by the Internal Revenue Service.

VARIABLE INTEREST ENTITIES

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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.

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We record equity income or loss based on AllDale III's distribution structure.

See Note 9 – Investments for more information.

See Note 9 – Equity Investments for more information.

On April 5, 2022, we invested $ 20 million in Francis Renewable Energy, LLC ("Francis"), in the form of a convertible note.

3 unchanged sentences

Subsequent to the conversion on April 1, 2023, we participate in earnings and losses and are eligible to receive distributions.

As of September 30, 2023, we held approximately 17.0 % of Francis' equity.

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.

2 unchanged sentences

Following the conversion of our note to preferred equity, we record equity income or loss based on Francis' distribution structure.

See Note 9 – Investments for more information.

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.

This commitment represents a 3.6 % interest in NGP ETP IV.

As of June 30, 2023, we have funded $ 5.4 million of this commitment.

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.

See Note 9 – Equity Investments for more information.

On June 2, 2022, we committed to purchase $ 25.0 million of limited partner interests in NGP Energy Transition, L.P.

("NGP ET IV"), a private equity fund sponsored by NGP and focused on investments that are part of the global transition toward a lower carbon economy.

This commitment represents a 3.6 % interest in NGP ET IV.

As of September 30, 2023, we have funded $ 6.3 million of this commitment.

We have concluded that NGP ET 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 ET IV as we do not have the power to direct the activities that most significantly impact NGP ET IV's economic performance.

We account for our ownership interest in the income or loss of NGP ET IV as an equity method investment.

See Note 9 – Equity Investments for more information.

EQUITY INVESTMENT S

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:

The changes in our equity method investment in AllDale III were as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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however, upon conversion on April 1, 2023 we began participating.

As a development stage company, Francis depends on capital contributions to meet its operating and debt obligations.

As a development stage company, Francis depends primarily 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.

The changes in our equity method investment in Francis for three and six months ended June 30, 2023 and 2022 were as follows:

The changes in our equity method investment in Francis were as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

3 unchanged sentences

Ending balance

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 and six months ended June 30, 2023 and 2022 were as follows:

As discussed in Note 8 – Variable Interest Entities, we account for our ownership interest in the income or loss of NGP ET IV as an equity method investment.

The changes in our equity method investment in NGP ET IV were as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

1 unchanged sentence

Contributions

Equity method investment loss

Equity method investment income (loss)

Ending balance

We hold $ 42.0 million of Series D Preferred Stock in Infinitum Electric, Inc.

During 2022, we purchased $ 42.0 million of Series D Preferred Stock ("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.

On September 8, 2023, we purchased $ 24.6 million of Series E Preferred Stock ("Series E Preferred Stock"

and, together with the "Series D Preferred Stock,"

the "Infinitum Preferred Stock") in Infinitum.

The Infinitum Preferred Stock provides for non-cumulative dividends when and if declared by Infinitum's board of directors.

Each share of Infinitum Preferred Stock 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.

Absent an observable price change, 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.

On August 22, 2023, we purchased $ 25.0 million of Ascend Preferred Stock from Ascend, a U.S.-based manufacturer and recycler of sustainable, engineered battery materials for electric vehicles.

The Ascend Preferred Stock provides for non-cumulative dividends when and if declared by Ascend's board of directors.

Each share is convertible, at any time, at our option, into shares of common stock of Ascend.

We account for our ownership interest in Ascend as an equity investment without a readily determinable fair value.

Absent an observable price change, it is not practicable to estimate the fair value of our investment in Ascend 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.

PARTNERS' CAPITAL

9 unchanged sentences

August 14, 2023

(1) On July 28, 2023, we declared this quarterly distribution payable on August 14, 2023 to all unitholders of record as of August 7, 2023.

November 14, 2023 (1)

(1) On October 27, 2023, we declared this quarterly distribution payable on November 14, 2023 to all unitholders of record as of November 7, 2023.

Unit Repurchase Program

1 unchanged sentence

As a result, we are authorized to repurchase up to a total of $ 100.0 million of ARLP common units.

During the six months ended June 30, 2023, we repurchased and retired 929,842 units at an average unit price of $ 20.90 for an aggregate purchase price of $ 19.4 million.

During the nine months ended September 30, 2023, we repurchased and retired 929,842 units at an average unit price of $ 20.90 for an aggregate purchase price of $ 19.4 million.

Since inception of the unit repurchase program, we have repurchased and retired 6,390,446 units at an average unit price of $ 17.67 for an aggregate purchase price of $ 112.9 million.

Change in Partners' Capital

The following tables present the quarterly change in Partners' Capital for the six months ended June 30, 2023 and 2022:

The following tables present the quarterly change in Partners' Capital for the nine months ended September 30, 2023 and 2022:

Limited Partner

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Balance at June 30, 2023

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Common unit-based compensation

Distributions on deferred common unit-based compensation

Distributions from consolidated company to noncontrolling interest

Distributions to Partners

Balance at September 30, 2023

Limited Partner

16 unchanged sentences

Actuarially determined long-term liability adjustments

Total comprehensive loss

Total comprehensive income

Common unit-based compensation

4 unchanged sentences

Balance at June 30, 2022

Comprehensive income:

Actuarially determined long-term liability adjustments

Total comprehensive income

Common unit-based compensation

Distributions on deferred common unit-based compensation

Distributions from consolidated company to noncontrolling interest

Cash retained by JC Resources in acquisition - See Note 1

Distributions to Partners

Balance at September 30, 2022

* Recast as discussed in Note 1 – Organization and Presentation.

4 unchanged sentences

(in thousands)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Oil & gas royalties

3 unchanged sentences

Total revenues

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Oil & gas royalties *

3 unchanged sentences

Total revenues

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Oil & gas royalties

3 unchanged sentences

Total revenues

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Oil & gas royalties *

4 unchanged sentences

* 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 June 30, 2023 and disaggregated by segment and contract duration.

The following table illustrates the amount of our transaction price for all current coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2023 and disaggregated by segment and contract duration.

(in thousands)

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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 six months ended June 30, 2023 and 2022:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands, except per unit data)

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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 2,577 and 2,896 for the three and six months ended June 30, 2023, respectively, and 3,529 and 3,289 for the three and six months ended June 30, 2022, respectively, were considered anti-dilutive under the treasury stock method .

The combined total of LTIP, SERP and Directors' Deferred Compensation Plan units of 2,759 and 2,878 for the three and nine months ended September 30, 2023, respectively, and 3,754 and 3,431 for the three and nine months ended September 30, 2022, respectively, were considered anti-dilutive under the treasury stock method .

WORKERS' COMPENSATION AND PNEUMOCONIOSIS

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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

Our receivables for traumatic injury claims under this policy as of June 30, 2023 are $ 4.1 million and are included in Other long-term assets on our condensed consolidated balance sheet.

Our receivables for traumatic injury claims under this policy as of September 30, 2023 are $ 4.1 million and are included in Other long-term assets on our condensed consolidated balance sheet.

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

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

5 unchanged sentences

Long-Term Incentive Plan

A summary of non-vested LTIP grants as of and for the six months ended June 30, 2023 is as follows:

A summary of non-vested LTIP grants as of and for the nine months ended September 30, 2023 is as follows:

Number of units

4 unchanged sentences

( 1,291,330 )

Non-vested grants at June 30, 2023

Non-vested grants at September 30, 2023

(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 six months ended June 30, 2023, we issued 860,060 unrestricted common units to the LTIP participants.

(2) During the nine months ended September 30, 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 $ 2.7 million and $ 2.1 million for the three months ended June 30, 2023 and 2022, respectively, and $ 4.9 million and $ 4.4 million for the six months ended June 30, 2023 and 2022, respectively.

The total obligation associated with LTIP grants of restricted units as of June 30, 2023 was $ 14.1 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

As of June 30, 2023, there was $ 15.4 million in total unrecognized compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest.

LTIP expense for grants of restricted units was $ 2.7 million and $ 2.4 million for the three months ended September 30, 2023 and 2022, respectively, and $ 7.7 million and $ 6.8 million for the nine months ended September 30, 2023 and 2022, respectively.

The total obligation associated with LTIP grants of restricted units as of September 30, 2023 was $ 16.8 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

As of September 30, 2023, there was $ 12.7 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 0.8 years.

Supplemental Executive Retirement Plan and Directors' Deferred Compensation Plan

A summary of SERP and Directors' Deferred Compensation Plan activity as of and for the six months ended June 30, 2023 is as follows:

A summary of SERP and Directors' Deferred Compensation Plan activity as of and for the nine months ended September 30, 2023 is as follows:

Number of units

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Phantom units outstanding as of January 1, 2023

Phantom units outstanding as of June 30, 2023

(1) During the six months ended June 30, 2023, we purchased 27,576 ARLP common units on the open market to settle the account of a participant under the SERP.

Phantom units outstanding as of September 30, 2023

(1) During the nine months ended September 30, 2023, we purchased 27,576 ARLP common units on the open market to settle the account of a participant under the SERP.

Units purchased and delivered to the participant were net of units settled in cash to satisfy tax withholding obligations.

Total SERP and Directors' Deferred Compensation Plan expense was $ 0.6 million and $ 0.3 million for the three months ended June 30, 2023 and 2022, respectively, and $ 1.2 million and $ 0.6 million for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 15.1 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

Total SERP and Directors' Deferred Compensation Plan expense was $ 0.6 million and $ 0.4 million for the three months ended September 30, 2023 and 2022, respectively, and $ 1.8 million and $ 0.9 million for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, the total obligation associated with the SERP and Directors' Deferred Compensation Plan was $ 15.7 million and is included in the partners' capital Limited partners-common unitholders line item in our condensed consolidated balance sheets.

COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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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.

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.

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The Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge mining complex and (c) the 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.

Appalachia Coal Operations reportable segments or (b) located near our operations and external mining operations.

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) near our coal mining operations but not yet leased.

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.

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, NGP ET IV, and Ascend (see Note 9 – Equity 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.

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(in thousands)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenues - Outside

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Capital expenditures (5)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Revenues - Outside (1)

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Capital expenditures

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Revenues - Outside

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Capital expenditures (5)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Revenues - Outside (1)

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Consolidated Segment Adjusted EBITDA

(5) Capital expenditures for the three and six months ended June 30, 2023 exclude $ 1.1 million and $ 3.9 million, respectively, paid towards the Acquisition Agreement.

Capital expenditures for the six months ended June 30, 2023 also exclude the $ 72.3 million paid for the JC Resources Acquisition (See Note 2 – Acquisitions) .

(5) Capital expenditures for the three and nine months ended September 30, 2023 exclude $ 10.0 million and $ 13.9 million, respectively, paid towards the oil & gas reserve acquisitions.

Capital expenditures for the nine months ended September 30, 2023 also exclude the $ 72.3 million paid for the JC Resources Acquisition (See Note 2 – Acquisitions) .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements